One million dollars in the bank doesn’t sound like much, does it? It can seem like an impossibly large number if you’ve never made $1 million Dollars before, but with the right steps and strategies, it’s entirely possible to reach this financial milestone, as nearly one in three Americans have done. Here are five simple steps to becoming a millionaire.
Step 1: Decide What Wealth Means To You
Many people use material goods as a measure of wealth, but having fancy cars and expensive clothing can bring along expenses you may not be able to afford on your own. If you’re looking for true financial freedom, it’s important that you define what being wealthy means for you. That way, when those expensive cars start calling your name, you can ask yourself if they really fit with your goal of becoming wealthy. If so, great! But if not, remember that there are other ways to measure wealth than just how much money you have in savings. So set clear goals before starting out on your journey towards millionaire status and don’t let yourself be distracted by shiny things along the way!
Step 2: Work Towards That Goal
After you’ve established your baseline, it’s time to make a plan for getting from here to there. Establishing SMART goals will help keep you focused and drive your progress forward. Be sure that your goals are Specific, Measurable, Attainable, Relevant and Time-bound. In other words: take steps so that every month you can ask yourself if you made progress on hitting those three big milestones (your big goal). You may find it helpful at first to establish smaller milestones or mini-goals along the way: $25K in six months; $50K in one year; $100K in two years…and so on.
Step 3: Be Frugal
To become a millionaire, you must have discipline when it comes to spending. You don’t have to be extravagant and waste money on expensive things or eat at expensive restaurants. Think about where your money is going and find ways to cut corners. For example, if you’re driving around town in an expensive car instead of taking public transportation or walking, consider getting rid of that luxury and saving up for something more important. Also, always look for a discount before buying anything. If there are two options with one being cheaper than another, choose it. Even small amounts of savings can add up over time and make you rich in no time!
Step 4: Invest In The Stock Market
Once you’ve saved up $1 million Dollars, you’ll probably want to invest. Stocks tend to outperform other types of investments over time and they can be relatively easy to manage if you set them up properly. But how do you get started? How much money should you invest in each company or industry? Do your homework before you invest. There are plenty of investment guides and resources available, such as Investopedia, that will help walk you through these steps. You’ll also need an online broker account like TD Ameritrade or E*Trade, which have low account minimums (typically $500). Once your account is open, research stocks that interest you and add them to your portfolio.
Step 5: Stay Motivated
It’s Easy To Be Motivated And Work Hard When Things Are Going Great. It Takes True Strength To Stay Focused And Remain Ambitious In The Face Of Failure Or Disappointment. This Step Requires Courage, But If You Keep On Going And Surround Yourself With Like-Minded People Who Support Your Dreams, You Can Achieve Anything. Don’t Give Up Just Because Things Get Rough.