the idea of becoming a millionaire has bother me for sometime so I decided to read bunch
of books, I have read the millionaire fast line, the millionaire next door, I even have
a video on that and couple of more.
the richest man in Babylon and so on.
these books are absolutely amazing, they contain amazing ideas and knowledge.
I think everyone should read them
but what bothered me was the question, how do I step by step become a millionaire no
matter what is my background, my strength or weaknesses.
Where do I start and How?
Should I quite my job and start up something?
Isn’t that too risky?
Some people suggest that college degree is worthless, does that mean I wasted my time
going to college?
And this kind of questions.
The first misunderstanding starts about the millionaires is that, we are looking at the
wrong examples, we look at mark Zuckerberg, Steve jobs, Larry page and this kind of people,
they are great hard working smart people, but the problem is that they have build their
fortune with coming up with some ideas that really worked out and this method of becoming
wealthy doesn’t work with the majority.
Just a disclaimer: If you are passionate to start something, go ahead and do it, but what
I want to share with you is, how do I become a millionaire or a billionaire without doing
that.
There are 2 rules you have to follow in your life that will give the highest possible chance
to become a millionaire or maybe even a billionaire.
First of all: double your income every 3 years, if you are making 5K dollars now, you must
make sure that you will be making 10K in 3 years from now, how you are going to do that,
we will talk about that in a while.
The second rule: save at least 20% of your income.
Again if you are making 5K a month, you should save at least a 1000 dollars.
Now, Lets apply this in a very practical example, Lets say you have just graduated from University
and you are around 22 years old and lets assume you spend another year looking for a job and
stabilising your life.
Whatever.
At 23 years old you start applying these 2 rules:
Assuming you are making around 50K annually which is the average wage in US and after
taxes, lets assume you are getting 36K in cash
If you double your income every 3 years, by the age of 32 you should be making 288K annually
and by the age of 38 you should be making roughly around 1 152K dollar a years.
Now, there 2 confusions people would probably have about this.
Do I really have to wait until I am 38 years old to become a millionaire?
The answer is NO! and secondly, there is not a single company
on earth which will double your salary every 3 years, that’s nonsense.
Exactly that’s nonsense.
And that’s why, in the first 3 years, your job is to create source of income which will
double your income, if you are making 36K, that asset must bring another 36K in 3 years.
What its going to be is different for everyone, you want to build a shop for example, invest
in some business, start a YouTube channel, for some people it might getting another qualification
to double their income, it will different for everyone, and here comes the importance
of reading books, articles, going to networking events, exploring new ideas and so on which
will help you to create that asset.
At the same time you are saving 20% of your income, which means you will save around 21
600 dollars in 3 years, this is the money you will be using to create that income, I
know that this money is not a lot but it still something to start with, of course you wont
have that money right away, that’s why you can take a loan to start that, knowing that
you will be able to pay that loan in 3 years.
In the next 3 years you will be able to save more and therefore invest more and create
assets that actually pay more than the previews, you can create absolutely new ones or maybe
expand the ones that you already have.
Once you are already earning 288K dollars annually, you can save more than 20% and even
double your income in a shorter period than 3 years, maybe even in 2 years and the assets
that you have build in the last 12 years that brings you around 288K dollars probably worth
at least a million dollars and that’s how the wealth actually measured, not only by
the amount of cash you have, but the value of the assets you have.
So in the first 9 to 12 years you are actually building this foundation to become multi millionaire
or billionaire, because for the rest of your life, you will be able to expand those business
or buy new business.
That’s exactly what warren buffet did, he made his first million at the age of 30 and
today his net worth is around 65 Billion dollars, because he just kept investing, building or
buying new business to keep doubling his income which eventually increased his net worth.
The mistake that a lot of people do at this age is, once they earn enough to sustain their
families and have pretty decent life, they loose the 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, they might stuck there for the rest of their lives, once they reach
their 40s and 50s and their kids start going to college and need more financial help, they
struggle again.
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 sufficient amount of your time and energy towards increasing
your income.
Keep following this rule of doubling your income every 3 years and saving 20% of it.
This plan might be the best for you but its most practical, the chances that you will
come up with another revolutionary idea 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
over the course of your life.
Another disclaimer: this doesn’t mean you will be happy in your life or anything like,
your happiness depends on you, but having enough money to have a good standard of living
can help you to be happy.
Anyways, I would like to hear your thoughts about it and share with if there is anything
I have missed.
Give this video a thumbs up and click that subscribe button, thanks for watching and
I will see you in the next video.