The idea of becoming a millionaire has bothered me for some time so I decided to read a bunch of books I have read The Millionaire Fast line The Millionaire Next Door. The Richest Man in Babylon and saw these books are absolutely amazing. They contain amazing ideas and knowledge. I think everyone should read them.
But what bothered me most was the question how do I step by step become a millionaire no matter what’s my background, my strengths, or weaknesses? Where do I start and how should I quit my job and start-up something Isn’t that too risky? This kind of question.
The first misunderstanding that starts with the millionaires is that we are looking at the wrong examples. We look at people like Mark Zuckerberg, Steve Jobs, Larry Page, and so on. They are great, hard-working smart people. But the problem is that they have built their fortune by coming up with some ideas that really worked out. And this method of becoming wealthy doesn’t really work with everyone. There’s a disclaimer here. If your passion to start up something, go ahead and do it.
But what I want to share with you in this blog post, how do I become a millionaire or a billionaire without doing that. There are two rules you have to follow in your life, that will give you the highest possible chance of becoming a millionaire or maybe a billionaire.
1, Double your income every three years.
If you’re making $5,000. Now, you must make sure that you will be making $10,000 in three years from now, how are you going to do that, we’re going to talk about that in a while.
2. Saving at least 20% of your income.
Again, if you’re making $5,000 a month, you should save at least $1,000 a faith. Let’s apply this in a very practical example. Let’s say that you have just graduated from university and you are 22 years old. And let’s assume that you spent another year looking for a job and stabilizing your life, whatever, at the age of 23, you start applying these two rules in your life, assuming that you’re making around $50,000, which is the average wage in the United States after taxes, let’s say you are getting around $36,000 in cash, if you double your income every three years, by the age of 32, you should be making at least 280,000 annually.
And by the age of 38, you should be making roughly around $1,152,000 a year. Now, there are two confusions people have about this, too. I really have to wait until I’m 38 years old to become a millionaire. The answer is no. And the second is, there is not a single company on Earth, which will double your salary every three years. That’s nonsense, exactly. That’s nonsense. And that’s why in the next three years, your job is to create another source of income besides your job, which will double your income. If you’re making $36,000, that asset that you have to create must bring another $36,000 in three years.
What’s going to be is different for everyone, you can build a shop, for example, invest in some businesses start a YouTube channel. For some people, it might even be getting another qualification to double their income, it will be different for everyone. And here comes the importance of reading books and articles, going to network events, exploring new ideas, and so on, which will help you to create that asset.
At the same time, you’re saving 20% of your income, which means you will have around $21,600 in three years, this is the money that you will use in order to create that income, I know that this money is not much but it’s something to start with. Of course, you won’t have that money on the spot. That’s why you can actually try to get a loan from somewhere knowing that you will be able to pay it within three years and the next three years, you will be able to save more and therefore invest more and create more assets that actually can pay more than the previous ones.
And you can create absolutely new ones, or maybe expand the ones that you actually already have. Once you’re already earning $288,000 annually, you can save more than 20% and even double your income in a shorter period of three years, maybe even in two years, and the assets that you have built in the last 12 years. That brings you around $288,000, probably worth at least a million-dollar. That’s how the wealth is actually measured not by the amount of cash you have, but the value of the assets that you actually have.
So in the first nine to 12 years, you’re actually building this foundation to become a multi-millionaire or a billionaire, because, for the rest of your life, you will be able to expand those businesses or buy new businesses. That’s exactly what Warren Buffett did. He made his first million at the age of 30. And today, his net worth is around $65 billion. Because he just kept investing, building, or buying new businesses to keep doubling his income, which eventually increases his net worth.
The mistake that a lot of people do in this age is that once they earn enough to sustain their families and have a pretty decent life, they lose their motivation to keep earning more. They get busy more with family and comfortable life and most people don’t want to leave that comfort zone that they’re already in. They might be stuck there for the rest of their lives. That’s why you should never stop expanding your wealth. Yes, of course, you can increase your standard of life. Spend more time with your family, but you should always give a sufficient amount of your time and energy towards increasing your income.
Keep following this rule of doubling your income every three years and saving 20% of it. This plan may not be the best for you, but the chances that you will come up with another revolutionary idea like Google or Facebook is really low and with this plan, you will not become a millionaire overnight but you will become a millionaire in 10 years and a billionaire maybe over the course of your life
. Another disclaimer here that doesn’t mean that you will be happy in your life or anything I thought you will have depends on you. But having enough money to have a good standard of living can help you to be happy. Anyway, I would like you to hear your thoughts about it and share them with me. If there’s anything I have missed in this video, give this blog post.