What would it take to become a millionaire? Would it be getting a high paying job? Or perhaps climbing the corporate ladder until you become the CEO? Be a big time Hollywood star perhaps? Well fortunately, for daydreaming Millennials, there are a lot of ways to become a millionaire. There are a lot of good articles and advice columns sharing how you can land a spot in the millionaire’s row.
But striking a million while young may not be so easy. In the National Financial Capability Study done by the Wall Street Journal in 2012, roughly 60 percent of Millennials have at least “one source of outstanding long-term debt.” This may come in the form of student loans, mortgages, and car loans. In addition to that, short-term debt in the form of credit cards are also affecting the financial capacity of those in the 24-35 age bracket.
So how does a Millennial rise above this difficulty and start working to be a millionaire? The solutions are pretty simple but never easy, but with determination, you might just hit your goal. Here are some ideas:
Set a goal beyond one million
People say to start setting a goal at one million in order to be legitimately called a millionaire. But in reality, we can exceed that expectation or fall short of our goal. So if you want to hit the million mark set a higher goal. This way, you’re tricking your mind to aim for something higher (let’s say two million.) And if you do fall short, you’re giving yourself some space where you may not have reached two million but you’re still likely to hit a million.
Don’t take shortcuts
One very tempting way to grow money is to invest it in schemes that promise really high returns in a short amount of time. These appear to be shortcuts in growing your money but they’re very risky. Interest rates that usually go above 10 percent or higher than what banks give are probably too good to be true. Remember the Ponzi scheme of Bernie Maddoff? People who invested in his scheme thought they’d earn more. But in the end, they ended up broke. Lesson to learn here? Just don’t be fooled by empty promises and invest with credible finance institutions.
Make money out of everything
People who want to earn will find ways to earn. If you look at the finance portfolios of millionaires, you will find that their sources of income are diverse. They don’t just rely on their salaries. They’ll probably have their pad rented out on AirBnB, drive with Uber on their spare time, take up a part-time job, or even sell used items online. The important skill here is knowing how to monetize what is around you. Some earn money by selling recycled items. Remember that one man’s trash is another man’s treasure.
Make your money grow
Even if you earn a lot of money, you won’t hit the million mark if you don’t invest it. Saving alone won’t be enough especially when you have a limited source of income. Investing will help you multiply your savings by going into mutual funds or even the stock market. In this case, it is important to talk to a financial consultant so you can determine the best investment for you. If you are conservative with your money, then you might want to put your money in a time deposit account. The interest is low but there won’t be any losses. If you’re willing to risk your money to get higher returns, then the stock market might be good for you. Banks will usually advise clients on this.
Of course, alongside these suggestions, living a frugal and simple life will help you reach your goal. That’s the hardest part for Millennials as spending is simply so tempting. But with enough discipline and a change of lifestyle, earning your first million won’t be as hard.