Sometimes I receive messages from the readers of the Worldwide Success site asking to teach them how to become a millionaire.  There are many facets to becoming a millionaire, so instead of responding to the request I usually refer the reader back to the many articles written on this site on the subject and also suggest that they subscribe to the RSS feed to continue receiving additional information.  But this time I decided to be more specific with the response and write an article directly answering the following request that came in this week:

“Hello my name is Cedric Gallon I’m 32yrs old I live in Orlando FL.  I’m writing you because I want to learn how to become a millionaire so I can teach and help others who are struggling. If you can teach me I would appreciate that, thanks.”

So let’s get right to it.  There are many ways to become a millionaire and I will list them in the order of least likely to happen to the most likely to happen.  As you work your way down the list, you will notice that the more likely the option the more it will require hard work, discipline, and significant time.

So here are the many approaches to becoming a millionaire:

Inherit it

This is perhaps the most obvious and easiest way to become a millionaire.  However, we are not going to spend a lot of time on this one because if you are about to inherit enough money to become a millionaire you are probably not interested in this article.

Gamble it

There are many ways to gamble your way to becoming a millionaire.  From playing the lottery to working the casinos, gambling is attractive because it requires little work on your part.  However, the odds are very much against you and I would not advise on relying on this approach to become a millionaire.

“Fame” it

By this I mean become a celebrity or famous person that gets paid millions to perform.  You can become a pro on a major sports league, a rock star, a movie star, etc.  The problem with this approach is that it requires some special talent that only very few people have or are able to obtain, so similarly to the other option above, the odds are very much against you.

Marry it

This is also a very unlikely option because you will most likely marry someone in the same social and economic status as yourself.  Besides, money should not be the reason for choosing a life companion.

“Entrepreneur” it

Starting a company is a good way to build wealth and many millionaires achieved their wealth as entrepreneurs.  However, keep in mind that 90% of new companies fail within the first five years of life, so the odds here are also not very encouraging, but at least we are starting to get into the realm of more realistic ways of becoming a millionaire that are under your control.  This approach obviously requires a significant amount of effort, risk and time.

Climb it

This is the traditional corporate approach to becoming a millionaire.  If you have what it takes to climb the corporate ladder and become a top level executive you can earn enough money to become a millionaire.  But keep in mind that there is only so much room at the top so this will not work for everyone either.

Build it

This is my favorite way to become a millionaire.  Why?  Because it is the most probable way to make it happen, and it only requires a little discipline and knowledge.  The other reason why this is such a powerful approach is that the average person can use this method to become a millionaire, and it does not require any exceptional talent or luck.  So what exactly is the “build it” approach?  It is composed of 3 fundamentals:

• Savings
• Investments
• Time

No matter how much money you make, there is one truth that is valid for any approach to becoming a millionaire.  The truth is that no matter how much money you make, you will never become a millionaire for a long time if you spend more than what you make.  Notice that this is valid for all of the approaches listed above.  Spending less than what you make is called savings and is the most fundamental component of the millionaire’s strategy.

But saving money is not enough.  You also need to do the right thing with the money you save in order for it to grow fast enough for you to become a millionaire.  And this brings us to the second fundamental which is investments.   There is much to be learned when it comes to investments.  One good place to start is reviewing some of the articles on this site such as Stock Investments – Achieving High Returns While Managing Risks,  The Wisdom of Great Investors and Achieve Success with Your Investments.

Finally, the third component of the “built it” approach to becoming a millionaire is time.  And this may be the one component that most of you may not like, but the reality of it is that get-rich-quick schemes are simply unrealistic dreams.  The reality of a sound approach to becoming a millionaire is that it takes time.

The 10-10-30 Formula

For the average American, if you use the 10-10-30 formula, you are guaranteed to become a millionaire.  Let me explain what this formula is all about.  It starts with the first fundamental component of the “build it” approach and it involves saving 10% of your income.  For the average American household with approximately $60,000 annual income a 10% rate of savings is the equivalent of $6,000 per year or $500 per month.

The second component of the formula is achieving a 10% return on your investments.  If you invest your savings in a well diversified portfolio of stocks, bonds and cash, based on historical returns, you should be able to achieve a 10% return on your portfolio.  Again, refer to the investment articles listed above in order to learn more about investments.

The final component of the formula is at least 30 years of compounding.  If you save $500 per month at the rate of 10% per year you will accumulate $1,000,000 in 30 years and become a millionaire!  If you can’t save $500 per month you may need additional time, depending on how much you can save.  Now, if you account for inflation, which averages around 3% per year, you will need an additional 5 years to achieve the equivalent of today’s $1 million.  In this case the formula should be adjusted to 10-10-35.

So, there you have it.  I have just taught you the many ways to become a millionaire, from the easy but unlikely to the guaranteed but long and disciplined approach.

Good luck and much success to you on your journey to becoming a millionaire.

 

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