Reposted for our newest readers
8 ways to prepare to become a millionaire
Written by Sam
Today I went to lunch with a very wealthy person. I don’t know exactly how wealthy , but based on his frequent trips to Maui, the fact that he earns a free plane ticket every month through his frequent flier points, and the fact that the other day he decided to go out and buy a truck just because he’s never had one before, there’s good reason to believe he’s close to a seven-digit earner.
As I talked with him, it raised a lot of questions in my mind about how managing my finances will change as my wealth grows.
If I were a millionaire would I still need to budget? Would I still want to track all my spending? Would I still need to negotiate with my wife about finances?
It seems logical that with an income over $1,000,000 a year you wouldn’t need to plan as vigorously. But in the end that’s a lie. Millionaires that manage their money irresponsibly can quickly lose it all and fall from grace (MC Hammer comes to mind).
Financial management principles are the same for millionaires and low-income-earners alike. Certainly the numbers your dealing with will change, but the basic principles and processes are still the same.
In fact, by following sound financial management principles and optimizing your frame of mind, you can accelerate the process of building wealth and know how to keep it when you arrive. Here are 7 ideas that will help you think about and manage money like a millionaire, regardless of your income.
1. Be who you want to be. Earning more money amplifies who you are.
I’m going to borrow my first idea directly from my lunch partner who said “earning more money really just amplifies who you are.” While that might seem initially like a good thing, it really is a double-edged sword.
For some, becoming a millionaire leads to a life of over-indulgence and decay. We catch glimpses of this in the popular media and entertainment world; drug addiction, abuse, and infidelity. Blemishes in your character will still be there if you become wealthy. Don’t fool yourself into thinking that having more money will solve your problems. It could make them worse.
On the other hand, if you have a mindset of serving and making a postitive contribution to your family and community now, you will be able to manifest those contributions with even greater power and effectiveness when you’re rich.
By focusing on the positive contribution you want to make in your life, you will be prepared to expand and amplify your contribution as you earn more money.
2. Build your relationships. Earning more money amplifies your relationship dynamics.
Let me tell you a secret: earning more money does not solve your relationship problems. Even though my income has increased significantly over our 10 years of marriage, we still tend to argue about the exact same financial issues.
If you have bad arguments over $100, just think of the how intense they will get arguing over $10,000 or $100,000. Working out your finances as a couple isn’t about the dollars, it’s about your values.
By making all your spending and budgeting explicit, and by working as a team, you can address those values differences before they get out of control. As you become more wealthy, you’ll have a trusted, agreed-upon system in place to manage your increase.
3. Spend money consciously, but on a macro level.
Even as a millionaire you should know where every dollar is spent, but you don’t necessarily need to know line-item detail. Rather, you need to know how much is spent within broad, macro-level categories.
Millionaire’s still need to decide how many thousands of dollars they’re going to spend on the “blow” category every month in relation to other expenses. Their blow category may be able to fund a new truck while mine funds a new book, but the decision is the same.
I recently read an article at StevePavlina.com where he talked about his goal of becoming a millionaire. He mentioned that to get in the mindset of a millionaire he would carry hundreds of dollars in cash in his wallet and not fret over $100 purchases.
At first glance, it seemed that he was spending his money irresponsibly. But the fact is you can spend some of your money frivolously and still have total control over your finances. The trick is to simply decide how much you’re willing to blow in relation to the rest of your finances.
If I were a millionaire I may very well give myself and my wife $1,000 in personal money every month. That leaves a lot of room for spending money any way I want, anytime I want.
But looking at my finances as a whole, there will be some limit as to how much I’m really willing to spend this way.
4. Be generous regardless of your income.
If you want to become a millionaire, be generous now. Charitable giving seems to be a universal law that attracts abundance into your life.
Scriptures have taught this principle for ages and even T.V. shows like My Name is Earl jokingly acknowledge the effect of good karma and the golden rule.
Many people deceive themselves thinking “once I have a lot of money, I will give generously to charities,” but don’t make even small charitable contributions today. If you have a hard time giving away $10 now, what makes you think you’ll be able to easily give away $10,000 when you’re wealthy?
Upon receiving some windfall money recently, my wife and I decided to allocate a few hundred dollars to “random charitable acts.” We already donate to our church regularly but felt that we’d like to be able to give to specific people as we felt inspired to do so. We hope this will put us in a mindset of giving.
We can actively be aware of the needs around us and feel empowered to help others financially as needed.
How cool would it be to do this on a large scale? I’ve been inspired by Billion-dollar donations from Bill Gates and Warren Buffet to charitable causes and think it’s a great example of a person’s character amplified.
I recently read about someone who just decided one day to go out in public and start handing out $20 bills to random people. It seems counter-intuitive, but the stronger you grasp money, the harder it is to attract it into your life. In contrast, the more generous you are, the more it will flow into your life.
5. Provide enormous value at work (self-employed or not)
One characteristic most wealthy people I know have in common is that they are totally invested in their business. Whether they earned their wealth by starting their own business or by working for another business, they all are focused on adding enormous value.
Sometimes it’s easy to kick back and waste time when working for an employer. It’s easy to not feel personally invested. But by doing so you’re only hurting yourself. In every job there are possibilities to contribute above and beyond what’s expected.
Those who do tend to expand their influence and are promoted faster. Treat your job like it’s your own business and you’ll find a level of enthusiasm you didn’t know existed. Looking at work through the lens of business ownership, you also may just find yourself aching to start your own business. Either way, you’ll be a happier person and will find that opportunities for advancement and wealth come to you more effortlessly.
6. Plan a “millionaire lifestyle” day.
Imagine what your day-to-day life would be like as a millionaire. Would you get up and go play tennis? Or would you sleep in as late as you want? How would you interact with family and friends? Would you still work but only on projects you love?
Once you have a clear picture in mind, find a day you can take off work and do those activities. Of course, there may be restrictions on how much you can spend, but do as much as you can afford.
By actually doing what you think you’d do as a millionaire, you can take one small step towards turning your thoughts into reality.
Some people may find that they don’t really enjoy the activities as much as they thought. If the reality doesn’t live up to your expectations, re-think things and try again. If you think you’d spend your time running a business, you could use your millionaire day as a way to take massive action towards starting that business.
Don’t just do this once. Schedule a “millionaire lifestyle” day 2 or 3 times a year. Have fun and get a taste of the millionaire life.
7. Build a strong foundation and get ready for your finances to explode.
It’s easy for people to get overwhelmed by the enormity of the task of getting out of debt, paying off your house, and saving for retirement. But what most people don’t think about is that with a focused budget and a debt-reduction plan, there comes a point at which your debt and house are paid off and you’re already saving enough for a comfortable retirement. All of a sudden you’re in a position with no debt, no payments, and possibly thousands of dollars a month of disposable income. Overnight, your famine turns into a feast. That’s when life gets really fun.
While we’re still working on paying off our house, we have already started experiencing this shift. It used to be that we struggled to fund luxury categories like gifts and vacation. Bonuses and cash gifts were used to fund categories that we knew we wanted to budget for but didn’t have enough month-to-month income to fund.
Over the past couple years, we’ve been able to fully fund these categories and windfall money now goes mostly straight to debt reduction.
Soon our second mortgage will be paid off and we’ll be putting that several hundred dollars a month (our payment plus snowball) into our first mortgage. Once the first mortgage is paid off, we should have over $2,000 a month to play with. And that isn’t even taking into consideration any income increases I may have over time. $1,000 a month in personal money doesn’t sound all that far off after all. And I won’t even need to be a millionaire to get it.
8. Recognize your wealth now to attract more into your life.
If you’re reading this blog, chances are you’re more wealthy than the vast majority of the world. Sometimes it’s easy to forget that simple fact.
You are wealthy.
I recently listened to an audio program by Dr. Wayne Dyer where he mentioned that if you were to compare the population of the earth to a village of 100 people and apply the same statistics you would see that 6 of the people (all from the United States) have 59% of all the wealth of the world and that only 1 person would own a computer.
If you have food in the refrigerator, clothes on your back, a roof over your head, and a place to sleep, you are better off than 75% of the world’s population.
By focusing on the wealth you already have in your life, you will attract more of it. If you only think about scarcity and what you don’t have, that’s exactly what you’ll attract. To create wealth, you have to think creatively.
Be a millionaire is a frame of mind. If you’re only after money, you’ll always want more and will never have enough.
If you’re after happiness, you can find it at any moment by changing your focus. By following these guidelines you’ll be able to experience just as much joy and satisfaction as any millionaire. “Money can’t buy me love” nor can it buy happiness.
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