A
young man asked this question after getting his first job recently. This is an
excellent question worth discussing.
The
easiest way to become a millionaire is to be born into a family that sets up a
million plus dollar trust fund for each child. The other easy way to become a
millionaire is to play the lottery. The catch is you have to win the lottery in
order to become a millionaire that way. (On a side note imagine if people
invested the money they pay for lottery tickets and made 5% on it over a 40
year period? Subject for another post I guess.)
But back
to reality. Most people aren’t born into family’s with incredible wealth and
most people will not win the lottery in the course of their life-time. The
first scenario is out of our control and the second is statistically improbable
at best. So here’s a few thoughts on the matter.
Make
the commitment to spend less than you earn. That means that you are putting
some money away towards savings and retirement every time you get paid.
Avoid
debt if at all possible. Consider long and hard before you take on any debt.
There are a few examples such as education and a home mortgage where debt may
in fact be worth it. When you do get a credit card treat it as a debit card.
Pay off the entire balance each and every month. If you can’t pay the credit
card off that month then don’t make the purchase.
Don't
worry about "keeping up with the Jones’s” when it comes to stuff – latest
cars, boats, motorcycles, bigger houses, etc. Don’t expect to have everything
your first five, ten, or even fifteen years your parents have taken a life-time
to accumulate.
Take
some time to educate yourself about personal finance. Some good personal finance
books:
•
The Total Money Makeover By
Dave Ramsey - Kindle Edition or Hardcover
•
The Millionaire Next Door By Stanley and Danko - Kindle Edition or Hardcover
•
The Richest Man in Babylon By George Samuel Clason - Kindle Edition or Paperback
Consider
getting a mentor. If you can find one or two adults whose financial behavior you
wish to mimic. Observe them and ask questions of your metor. Perhaps someone at
your job, your local church, or a relative.
Shifting
gears to long-term what are your goals, objectives, and dreams in life? If you
go to college, which I do recommend, what degree would you pursue? How much
debt will you have to take on to get the degree in college? What kind of job
could you possibly get with said degree? What is the average starting salary
for people in said industry in the U.S. and in the state you live in?
If
you’re planning on going to a technical school (Dental hygiene, culinary
school, paralegal, etc.) l what profession would you be attracted to? How much
debt will you have to take on to get the degree at the technical school? What
kind of job could you possibly get with said degree? What is the average
starting salary for people in said industry in the U.S. and in the state you
live in?
If
you have entrepreneurial tendencies, consider the possibility of starting a
company or being self-employed rather than being an employee of an
organization.
If
you do get married choose your spouse very carefully. Divorce is horrible on a
variety of levels. Financially, it can be devastating towards wealth building...
Bottom
line: It’s not easy but it IS possible to become a millionaire. It is attainable but takes time,
dedication towards spending less than you make, dedication to save money each month, and a game plan to save for retirement. I'm not there yet but I plan to have a net worth of 1 million by the time I retire.
What do you
think? Leave a comment!
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