How to Become a Millionaire in a Year – Becoming a millionaire is no easy task, but if you work hard you can do it. Becoming a millionaire in one year is the biggest goal anyone could ever set for themselves. But when you start your journey towards it, you will discover that there are many obstacles along the way making it seem impossible. This article provides strategies and tips to help you become a millionaire in one year.
Believe it or not, becoming a millionaire is a goal that can be achieved this year. In my life, I have been a millionaire several times. Most of the time before my 30s, however, I gambled my money away on cars, homes and a lifestyle I had no reason to be living.
Despite the chance that you too will blow millions, the process for you or anyone to become a millionaire has been consistent over the years. If you follow these eight valuable pieces of advice, I can guarantee that eventually you will become a millionaire. Here’s to making this happen this year!
Table of Contents
1. Develop a written financial plan.
One of the main reasons why someone can never become a millionaire is that they haven’t written a financial plan. Developing a financial plan forces you to take action, instead of just talk. It also guides you in making the right decisions in order to achieve all of your dreams and goals.
Financial planner Scott D. Hedgcock said that, “When planning for a more secure future there are two inputs that are indispensable: how much money you have and how much money you spend.
“The basic point I want to stress about these two inputs is that they are absolutely fundamental to all financial planning regardless of how large either of them is,” Hedgcock said.
“In my experience, the biggest difference between those on the right path vs. those on the wrong path was the amount of time and effort they put into devising a plan for their finances.” But taking the time to create a plan and see it through “is the one thing all financially successful people have in common.”
Hedgcock added that, “The success experienced by those who do this occurs regardless of their relative wealth. Likewise, the failure of those who do not follow a plan is unrelated to their wealth.”
When creating a financial plan:
- Focus on what matters most and don’t obsess over the past.
- Focus on what you control by listing your known expenses first in your budget, and with the income left over, list the discretionary categories.
- Focus on your future by anticipating how much your future self will need to survive.
2. Focus on increasing your income.
“In today’s economic environment you cannot save your way to millionaire status,” wrote Grant Cardone, who went from being broke and in debt at the age of 21 to becoming a self-made millionaire by 30. “The first step is to focus on increasing your income in increments and repeating that,” Cardone said.
“My income was $3,000 a month and nine years later it was $20,000 a month. Start following the money, and it will force you to control revenue and see opportunities.”
Thankfully, you have several options to boost your revenue, like investing in high ROI businesses and side hustling.
3. Take advantage of Uncle Sam’s generosity.
“The best way I know to become a millionaire is to put the power of compound interest on your side. By giving your money more time to compound and keeping your rate of return as high as possible, you greatly increase your chances of reaching a seven-figure net worth,” Brian Feroldi wrote on The Motley Fool.
“Of course, earning a high return on your nest egg is easier said than done, as many factors to create that return are outside of your control,” Feroldi continued. “However, all investors do have control over two huge factors that can put a serious drag on long-term returns: investment costs and taxes. If you want to become a millionaire, focus on keeping both as low as possible.”
Feroldi went on to write that if you have “a 401(k) or 403(b) through work, then any money you contribute to the account can grow tax-deferred, allowing your money to compound more quickly.” He also suggested opening up a traditional or Roth IRA, because those plans “keep Uncle Sam away from your money, either now or later.”
You should use a broker or brokerage firm “that charges very little per trade — and not to trade too frequently, Feroldi advised. “If you want to become a millionaire, you need all the help you can get. Making sure your investment fees and tax bill are as low as possible will go a long way toward helping you achieve your goal.”
4. Increase your streams of income.
After studying the very wealthy for five years, author Thomas Corley discovered that 65 percent of self-made millionaires he studied had three streams, 45 percent had four streams and 29 percent had five or more streams. This could include starting a side business, working part time, making investments and renting out everything from your home to your car to household items.
5. Automate your savings.
If you want to become a millionaire, then you absolutely need to get into the habit of saving by contributing to your 401(k), Roth or traditional IRA, and contributing to an emergency fund that’s been placed in a money market fund. However, the way to make this work is by automating your savings. This will automatically withdraw a percentage of your salary and place it into your contributions without your ever seeing it. It’s suggested that you put 10 percent toward investments and 5 percent toward savings.
6. Upgrade your skills and knowledge.
“Read at least 30 minutes a day, listen to relevant podcasts while driving and seek out mentors vigorously,” wrote Tucker Hughes, who became a millionaire at just the age of 22. “You don’t just need to be a master in your field; you need to be a well-rounded genius capable of talking about any subject whether it is financial, political or sports-related. Consume knowledge like air and put your pursuit of learning above all else.”
7. Live below your means and lay off the credit.
It’s widely known that the wealthiest people in the world are frugal. They don’t spend excessively on designer and luxury items. They use coupons. And, they’re known for living below their means by purchasing modest homes and vehicles.
They’re also known for keeping their debt under control by using credit sparingly. Take a cue from T. Boone Pickens, who only carries around as much cash as he needs for what he intends to buy.
8. Associate with millionaires.
“In most cases, your net worth mirrors the level of your closest friends,” Steve Siebold wrote for Business Insider. This isn’t exactly a new philosophy. It’s been around ever since Andrew Carnegie embraced the Master Mind principle.
“Exposure to people who are more successful than you are has the potential to expand your thinking and catapult your income,” said Siebold. “We become like the people we associate with, and that’s why winners are attracted to winners.”
“The reality is,” he said, “millionaires think differently from the middle class about money, and there’s much to be gained by being in their presence.”
Surprisingly Simple Ways to Become a Millionaire
Simple tasks are not always easy tasks. If I were to hand you a spoon and ask that you dig a hole nine feet down into packed soil, that’d be pretty straightforward and simple but it certainly wouldn’t be easy.
Likewise, you’ll find some of these simple ways to be just that – simple but not easy. But come on, you’re tenacious enough for the job, right?
Jaime Tardy, author of Eventual Millionaire who has interviewed hundreds of millionaires has this to add , “One of the main traits of a millionaire is perseverance. The ability to KEEP GOING in the face of adversity even when the finish line is very far away.”
One last thing. Remember that many of these tips are surprisingly simple, don’t underestimate their effectiveness just because you’ve “heard that one before.” Put these babies to good use and watch your millionaire potential soar!
1. Work smarter and harder than your competition.
Identify your competition. How hard are they working? What are some differentiators you can bring to your workplace or market?
Start by working smarter. There’s no use in working harder if your work isn’t effective at producing income – you’ll be spinning your wheels.
There’s no sense in selling ice cream cones on your front lawn in the dead of winter. Instead, set up a booth at the park in the sizzling summertime – you get the idea! Simple, commonsense changes can greatly improve your effectiveness.
Work harder than others are willing. We’ve all seen the guy or gal at the office who works harder than anyone else. Maybe they’re a little nerdy or a little too interested in their job – or are they?
Maybe they’re onto something. After all, aren’t they the ones getting the promotions? Aren’t they the ones who become the office linchpins?
I remember when began my career with A.G. Edwards & Sons in 2002, I was in a training class of around 55 people. After completing training a year later, our class was reduced to less than half. My fifth anniversary mark? Only five of us were left.
Most failed. Why? Because they weren’t willing to put in the hard work required.
I beg you to not be afraid of hard work. Not only will your boss feel better about what you’re doing for them – you will too.
I’m not afraid to die on a treadmill. I will not be outworked. You may be more talented than me. You might be smarter than me. And you may be better looking than me. But if we get on a treadmill together, you are going to get off first or I’m going to die. It’s really that simple. I’m not going to be outworked. – Will Smith, Actor
2. Learn from your mistakes and move on.
Everyone makes them. I do, you do, we all do.
And believe me, I’ve made some pitiful mistakes.
Would you get suckered into two multi-level companies that go nowhere? Would you throw $8,000 into an online business venture only to lose it all? Those are just a couple of several investment mistakes I’ve made with my money.
Mistakes are difficult to swallow. I think our first gut reaction as human beings to the realization we messed up is to shift blame – to others or to circumstances.
The very best way forward is to admit we fumbled the ball. Are you willing to admit when you make mistakes?
Some people, when faced with their own inadequacies, beat themselves up. And you know what that does? It paralyzes them from making the decisions they need to make to achieve success.
It’s important to remember that . . . .
Only those who are asleep make no mistakes. – Ingvar Kamprad, Founder of IKEA
So, take the simple step to fess up and move on. Yes, it’s simpler than you think – especially once you have practice. If you are still in the middle of a debt mistake one of the best things you can do is to stop paying interest by transferring your balance over to a 0% APR credit card. This will free you up to hammer down on that debt instead of paying big interest payments.
Millionaires don’t give up because of a few silly mistakes. They press on toward the goal.
3. Build something new that you would love – and be sure to experiment.
You can read book after book about how to research what your customers will love, and by the time you deliver it, they’ll already be bored with it.
If you’re the entrepreneurial type – I know I am – make sure to work on projects you can get excited about!
Chances are, if you create something that you’d use and love, others will too.
Millionaires understand that some of the best ideas don’t come out of costly research, they come out of a passion for making the world a better place.
Also, remember to experiment. Have fun! Some of my best ideas come out of experimentation.
In 1945, Percy Spencer experimented with a new vacuum tube while doing research for the Raytheon Corporation. He popped popcorn and melted a candy bar, and saw the great potential for this process which eventually culminated into the advent of the microwave.
Tim Cook, the CEO of Apple recently explained in an interview with Charlie Rose that it’s more difficult to edit than it is to create something entirely new. But I’ve learned that sometimes creating something new can be the best way forward to becoming a millionaire.
One of the things that I’ve been most excited about building is my blog. My financial planning practice was growing at a steady rate but after I launched GoodFinancialCents.com in 2008 my practice and revenue have grown significantly. Some of that is a direct result of getting new clients to my practice while the other more surprising revenue source has been directly from the blog.
A combination of advertising revenue and introduction to new business opportunities (because my name and face are all over the web) have been a huge blessing.
Here’s the thing you have to realize though: I KNEW NOTHING ABOUT BLOGGING.
That’s right. The launching of my blog was a total experiment and still is today. I’m always testing different ways to monetize and build my brand. Experimenting is the fun part!
You can’t just ask customers what they want and then try to give that to them. By the time you get it built, they’ll want something new. – Steve Jobs, Former CEO of Apple
4. Learn to budget – or at least get help doing so.
You know that I hate budgeting. Thankfully, my wife budgets like a pro.
Here’s a tip from one of the financial greats (a millionaire, to say the least):
Rule No.1: Never lose money. Rule No.2: Never forget rule No.1. – Warren Buffett, CEO of Berkshire Hathaway
If you don’t budget, I promise you’ll lose money to overspending.
Want to make yourself sick? Count up how much you’re spending on eating out, clothing, gadgets, and other delights and write it down. Then, start budgeting. After a year, look at how much you’re spending and compare with your initial count.
Yikes. Try not to lose your lunch.
A hugely important part of budgeting is ensuring you’re spending less than you’re making. And the only way to do that friends, is to track everything.
If you’re not a spreadsheets-kind-of-person, that’s okay. Just make sure you have some help.
5. Start investing – it’s simpler than you think.
Millionaires many times become millionaires – and stay millionaires – because they invest.
The good news? It’s actually pretty simple.
Betterment is a great place to start when you’re new to investing. They believe that investing doesn’t have to be complicated, and that if more people had an easier way to do so, they would. With Betterment, you really only have three decisions to make: how much money to invest, how often you want to invest it, and how you want your asset allocation to look between stocks and bonds.
Boom. You’re done. I like that.
There are other ways to start investing, too. For example, Personal Capital can help you manage your investment accounts as you get more sophisticated.
Here’s my point: You don’t have to be a rocket scientist to start investing.
Just start somewhere. It’s okay if you don’t have a lot of money to invest right away.
I started with investments at a very young age, with a little help from my mom. I dare you to read a little more about my first investments – you’ll soon discover that starting small is totally fine. Start investing a few bucks and I’ll applaud you!
Also, once you start investing, don’t abandon the ship. The stock market has its ups and downs. Just ride the wave. Think long-term!
Lastly, remember that investing doesn’t always have to be in the stock market. Some of the best investments I’ve made have been investing in things outside the stock market. This includes investing in my business, myself through certifications and a business coach, and my blog.
Need some encouragement to get started investing? Join Operation: Invest Now where I’m encouraging 1 million people to invest in themselves.
6. Don’t believe discouraging people.
As soon as you accept that you’re not going to become a millionaire, you probably won’t – you’ll settle for the ordinary.
Your beliefs about your future matter a whole lot, and will – in part – help determine your future.
After all, your beliefs affect your actions, and your actions affect your outcomes.
When you listen to discouraging people, you’re letting them accomplish their goal – to drag you down and ensure you don’t surpass their success. No good.
Instead, I suggest you prove them wrong – but be humble about it. Your results will speak louder than your words, I promise you.
I just love it when people say I can’t do it, there’s nothing that makes me feel better because all my life, people have said that I wasn’t going to make it. – Ted Turner, Founder of CNN
7. Save some of your income for a rainy day.
If you’ve lived on this planet for any considerable number of years, you know that bad stuff happens.
Not only that, sometimes several bad things happen all at the same time. Talk about knockout power!
That’s why I recommend that you save some of your income for a rainy day.
Medical emergencies can last years.
Trees go through roofs.
Jobs can be lost.
Don’t get caught without an emergency fund. You hear?
What does this have to do with becoming a millionaire? I’ll tell you.
If you have an emergency and don’t have some liquid cash saved up in a savings account like one from Capital One 360, you’re likely to either go into debt (bad idea) or borrow from family members (very bad idea).
Don’t be the guy that owes his parents.
Don’t be the couple that drowns in debt.
Think of debt as the polar opposite of investing. Instead of you investing in companies, companies are investing in you – looking to make as much profit as possible by pulling it out of your wallet. It’s bad news people.
According to many experts, you should have around three to six months of expenses in your emergency fund – in bad times, I recommend you shoot for eight months.
Conclusion
Your goal is to become a millionaire. Everyone needs motivation to accomplish big tasks and your task is no exception. Set a goal and you will be able to recognize the right path and continue on it with great strides. The key is in understanding that we all can become millionaires in our own right, whether we realize it or not.