How To Become a Millionaire

by | May 23, 2008 | Cash Flow, Life Aspiration Planning, Weekly Column

millionaire.jpgHave you ever dreamed of having a lot of money? Or wondered how you could get really rich? Probably you have; most of us have such dreams, at least from time to time.

As I emphasize in my work, there is much more to wealth than accumulating money. Having a good income, learning to live on less than you earn, and investing wisely are only part of wealth in the larger sense. For the moment, though, having money is precisely what I am talking about. Being rich, according to various studies, is defined as having a minimum net worth of somewhere between one million and ten million dollars.

How do you get that rich? Probably the easiest way to riches is to inherit your wealth. Only about 15% of all millionaires inherit their wealth, however; some 85% of all millionaires are self-made.middle-class-millionaire-book.jpg

I recently read an article by Bob Clark in Investment Advisor Magazine, discussing a new book, The Middle-Class Millionaire, by Russ Prince and Lewis Schiff (Doubleday Business, 2008). These authors list four common characteristics held by people who actually become rich.

1. Be an owner of the company. A street term for this is “having some skin in the game.” The number-one investment a millionaire makes is in his or her own company. Over 80% of all millionaires own all or part of the companies they work for. Mike Haubrich, a financial planner from Racine, Wisconsin, contends your most valuable asset is your career or business. Most millionaires are living proof that he’s right.

2. Make a lot of mistakes. You may be thinking that making a major financial mistake is one way to the poor house, and it is. The average millionaire made 3.1 major career or business mishaps, versus 1.6 mistakes for non-millionaires. The difference is that those who succeeded in building wealth tried again, and again, and again. They didn’t give up. I have a hunch the resiliency of the rich has something to do with the first principle of owning the company you work for. In my experience, when you “have some skin in the game,” you have a strong incentive to keep on keeping on, when others who aren’t owners can simply change careers or employers.

3. Learn to ask for what you need. For most wealthy people, becoming successful was not done in a vacuum. Knowing a lot of people is another commonality among the rich. Whether it’s marketing your business, looking for advice, or needing information, the more people you know, the more access you have to finding what you need. Millionaires are experts at building an expansive network of friends and acquaintances and turning to those in their network for help and council.

4. Work hard. You had a hunch I would eventually get to this one, didn’t you? Indeed, the average millionaire works hard, putting in an average of 70 hours a week. According to Clark’s article, millionaires are five times more likely than their non-millionaire counterparts to be “always available” via e-mail, four times more likely to work nights, and three times more likely to be in the office or store on weekends. While the study didn’t say so, dream-big.jpgI have a hunch most millionaires enjoy what they do. I also have a suspicion that the willingness to work hard has some connection to having ownership in your company, as well.

Many people can lay claim to one or two of these characteristics. But if you have a dream of getting rich, putting all four into practice in your life will exponentially increase your odds of making that dream come true.

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