How to Be a Millionaire: 4 Core Steps
1.
Invest Regularly - Everyone wants to know how to get rich; in one word, the answer is 'invest.
' Investing regularly, usually when you get your pay check, is a fantastic way to automate the savings process.
Using this technique, you're forced to save as soon as you get money, therefore deferring the temptation to spend.
The advantages of investing regularly are mainly habitual.
It allows someone who may not be the best at saving, a concrete plan that they can stick too no matter what.
If you can exercise more conviction with your savings plan, you may want to time your buys when the stock market has a few bad days/weeks or when fear is high and prices are depressed, that way you can buy on sale.
With a long term perspective, buying on sale can be very rewarding.
2.
Buy Stocks - The long term record of stocks still makes them the best investment for someone with aspirations to become a millionaire.
Over the last century, stocks had an average annual return of approximately 10%, eclipsing the long term return of bonds.
There is a catch, stocks are generally very volatile compared to bonds and can randomly spike up and down in price.
With stocks, you can't be sure about returns in the next 3-5 years, yet history tells us that on a longer term horizon (10+ years), stocks are the best investment for your dollar.
You simply cannot become a millionaire on a low income by investing in bonds; the extra 4-5% return over the long term from stocks makes all the difference.
3.
Take Advantage of Tax Breaks (TFSA, RSP, 401k, IRA) - You want to take advantage of Government registered accounts that defer taxes, or allow your investments to grow tax free.
Although the advantages are marginal, especially if you're just starting out, any way that you can gain an edge and save money is worth looking into.
If you have been saving and not taking advantage of these accounts, do not get frustrated; many people have got rich before a TFSA was ever known.
I would advise not to move your positions to a tax free/deferred account, but just start over saving in the tax free account as soon as possible.
Starting in an account that has a $0 balance can be a positive, and a new personal challenge to save even more (it was for me).
4.
Save Diligently - Growing your portfolio by selecting the right investments is usually the focus of most investors trying to gain millionaire status.
However, what can contribute even more to your wealth is simply just spending less and saving more money than you normally would.
Saving more can be done in several ways; increasing your income, eating healthier, confronting your vice (alcohol, drugs), being more frugal and embracing minimalism are all ways to save more, directly and indirectly.
As you invest and build up your nest egg, keep in mind that becoming a millionaire is less about applying intricate techniques in the stock market, and more about just simply saving more and not spending as much.
Applying this principle can speed up the process significantly, especially if you're on a lower income.
Also, set achievable short term goals along the way.
When I first started saving, I really wanted to get $10,000 dollars, and once I reached that I set a goal to get 20k, etc.
Once you reach a savings goal, make new goals and continue saving diligently until you are financially secure.
Everyday that goes by, you could be saving and investing.
Take the plunge and start now; this is something you will never regret.
Any questions, email me personally.
I'm John, my passion in life is teaching about saving, investing and stocks.
Glad to answer questions or chat.
john@riseofamillionaire.
com
Invest Regularly - Everyone wants to know how to get rich; in one word, the answer is 'invest.
' Investing regularly, usually when you get your pay check, is a fantastic way to automate the savings process.
Using this technique, you're forced to save as soon as you get money, therefore deferring the temptation to spend.
The advantages of investing regularly are mainly habitual.
It allows someone who may not be the best at saving, a concrete plan that they can stick too no matter what.
If you can exercise more conviction with your savings plan, you may want to time your buys when the stock market has a few bad days/weeks or when fear is high and prices are depressed, that way you can buy on sale.
With a long term perspective, buying on sale can be very rewarding.
2.
Buy Stocks - The long term record of stocks still makes them the best investment for someone with aspirations to become a millionaire.
Over the last century, stocks had an average annual return of approximately 10%, eclipsing the long term return of bonds.
There is a catch, stocks are generally very volatile compared to bonds and can randomly spike up and down in price.
With stocks, you can't be sure about returns in the next 3-5 years, yet history tells us that on a longer term horizon (10+ years), stocks are the best investment for your dollar.
You simply cannot become a millionaire on a low income by investing in bonds; the extra 4-5% return over the long term from stocks makes all the difference.
3.
Take Advantage of Tax Breaks (TFSA, RSP, 401k, IRA) - You want to take advantage of Government registered accounts that defer taxes, or allow your investments to grow tax free.
Although the advantages are marginal, especially if you're just starting out, any way that you can gain an edge and save money is worth looking into.
If you have been saving and not taking advantage of these accounts, do not get frustrated; many people have got rich before a TFSA was ever known.
I would advise not to move your positions to a tax free/deferred account, but just start over saving in the tax free account as soon as possible.
Starting in an account that has a $0 balance can be a positive, and a new personal challenge to save even more (it was for me).
4.
Save Diligently - Growing your portfolio by selecting the right investments is usually the focus of most investors trying to gain millionaire status.
However, what can contribute even more to your wealth is simply just spending less and saving more money than you normally would.
Saving more can be done in several ways; increasing your income, eating healthier, confronting your vice (alcohol, drugs), being more frugal and embracing minimalism are all ways to save more, directly and indirectly.
As you invest and build up your nest egg, keep in mind that becoming a millionaire is less about applying intricate techniques in the stock market, and more about just simply saving more and not spending as much.
Applying this principle can speed up the process significantly, especially if you're on a lower income.
Also, set achievable short term goals along the way.
When I first started saving, I really wanted to get $10,000 dollars, and once I reached that I set a goal to get 20k, etc.
Once you reach a savings goal, make new goals and continue saving diligently until you are financially secure.
Everyday that goes by, you could be saving and investing.
Take the plunge and start now; this is something you will never regret.
Any questions, email me personally.
I'm John, my passion in life is teaching about saving, investing and stocks.
Glad to answer questions or chat.
john@riseofamillionaire.
com
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