parker m asked: I can smell the money in the air, but can’t see it and don’ t know how to get it. I know people out there are becoming millionaire in this recession but how are they doing it? i don’t want to miss out on any opportunity to be rich. can someone tell me in details how to accomplish this task? do i have to beg a millionaire to give me one million dollars or something?
ps can i get some tips? advise in detail? or an idea.. thanks.
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Jim Anderson asked: Becoming a millionaire is not as complicated as people think. It is simply understanding math and using it to grow your savings over time. Most millionaires get that way slowly, it doesn’t happen overnight. You also probably don’t realize they are a millionaire because they don’t look like it. So if you want to become a millionaire too, then let me give you some steps.
First, you have to change your spending habits. The general rule is it isn’t how much you make; it is how much you keep. You can’t accumulate a strong net worth spending everything you make. This is probably the most difficult step of all because it involves changing your behavior. You have been trained to be a consumer since you were a child and saving money is what you did with what you had left over. You have strong desires to keep up with your peers. You want to do a little better than them. The problem with all this is that when you spend what you make, you are still broke at the end of the day. When you buy things on credit, you go broke even faster.
Second, you have to save your money and invest it. These days every middle class individual has the opportunity to become a millionaire by simply starting their saving early and putting it in a good long term investment, like a good mutual fund. There is a saying you hear from financial advisors regularly, “pay yourself first”. This means you have to treat your savings amount like the IRS treats taxes. It needs to come out of your check automatically before you see it and immediately invest it. Then force yourself to live on what is left. Even if you start later in life, you can still make it happen. You need to sit down and do the math and create a plan.
Third, you have to know how to manage risk. This is probably the most ignored aspect of building your net worth. You have to quantify risk and know when to replace it with insurance. You can’t make money on an investment without taking risk, but you need to limit your risk. It isn’t either a risk or no risk situation. You quantify it and rate it. Some risks make sense to avoid completely and insurance premiums are a good trade off. Some risks are better handled through self-insurance. Some risks are best avoided completely if possible because they are too high and you are likely to lose either way.
Fourth, you have to aggressively avoid debt. Debt increases financial risk. The lender is going to get paid one way or the other unless you are completely broke. So debt doesn’t help you get rich, it enslaves you to the lender. If you can’t change your paradigm about debt, eventually it will rob you of your savings. An old Proverb says, “The rich rule over the poor and the borrower is the lender’s slave” (Proverbs 22:7). There ultimately is no responsible use of debt if you are properly managing risk. Though the Proverb still holds true, the only exception is if you have a secured loan at no more than 50% of the asset’s market value and are willing to lose as much as 50% of the value of the asset to pay the loan on demand. However, this could be considered taking an unnecessary risk. Ultimately, you are still at the mercy of the lender.
Fifth, you have to have discipline. This means you have to be prepared for the bad times and still be able to maintain your saving schedule. If you don’t work your plan without fail, your plan will fail. We all calculate how rich we will be when we save X amount every month for 20 or 30 years, but then we fail to keep saving during bad times and wonder why we can’t meet our goals. So you have to plan for the bad times before they happen so you can keep things going on your plan. Discipline also means that you have the commitment to live below your means and not have an acquired taste for luxuries.
Finally, you have to protect your heart from greed and materialism. The antidote for this sickness is generosity. You have to be generous with your money. As counter intuitive as it seems to the average American, greed and materialism will destroy your wealth. Being generous with what you have makes your wealth more secure. It builds a more stable society, and it keeps you from getting too attached to your money and belongings. You discover what true wealth is and being a millionaire is not your sole focus in life.
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David L Allred asked: I really don’t feel and absolutely know that every millionaire does not live the same lifestyle. You have two different kinds of millionaires, at least that I know of. First, you will have people who become millionaires by hoarding and saving every single penny they earn and putting it away in a safe place. Once they have saved enough, they will finally reach that millionaire status. Then you have the other type who know that money is energy, and just as a river, water that leaves one area will be replaced by more water. They know that money must stay in flow and that you must spend money to make money. It is like a circular motion and when you spend money you get money. It stays in flow.
I know how I live and I can tell you this much, the millionaires who save every penny are not living a very exciting lifestyle. They probably drive older cars and really don’t get out much. You know, to be honest, they probably don’t even smile that much. I believe this type of millionaire is always living in a state of fear….fear of losing all that they have, which is why they hide it all away. They may die some day and never have the opportunity to live the lifestyle.
Now, you know the millionaires and billionaires out there that know money should stay in flow are the ones that are absolutely living the lives of their dreams. These are the ones that travel the world, spend entire weeks and months in a foreign country in a five star resort, and while doing so, make more money than they spend. It’s funny how that works. When you are having the most fun, spending money, and enjoying your life, you will make the most money! Millionaires that keep their money in flow, are and always will be the richest and most fulfilled.
To become a millionaire, what must you do? Well, take your pick. Save all you earn for as long as it takes, or, get started in a business such as this, spend a little money, and make your millions. To become a millionaire, all you need is an opportunity, a mentor, and a lot of ambition. Hundreds if not thousand of millionaires are created every year. Are you going to be the next one. Sure, everyone wants to make millions but not everyone has the ambition and drive to action and actually make it happen. So, what are you waiting for? Get started!
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