So you want to learn how to become a millionaire.
Great. Good for you.
I want six pack abs.
I want an Oreo cookie right now.
I want my feet massaged each night by a female body builder. (What? They get sore!)
But it’s not enough to want something. As Michael Jordan says, “Some want it to happen, some wish it would happen, others make it happen.”
Wanting is never enough. Especially when you want to know how to become a millionaire.
A lot of people want to become millionaires. It’s the epitome of the American Dream. It’s a solid, tangible number that most people believe will classify them as “rich.”
Yet so few ever make it to that point in life. In fact, of the 7 billion people on earth, less than 20 million are millionaires. That’s far less than 1%.
This is absurd given one simple truth: Becoming a millionaire is simple. This article will prove that.
Becoming a Millionaire is… Simple?
BUT… not easy.
There is a difference.
- Running 50 miles is simple — but not easy.
- Staying up for 60 hours is simple — but not easy.
- Avoiding that chocolate cake is simple — but not easy.
Simple means there are not a lot of steps; it can be understood.
So becoming a millionaire is simple, not easy.
- You don’t need an MBA.
- You don’t need to go to Harvard.
- You don’t need to come from a rich family.
- You don’t have to be exceptionally smart.
- You don’t have to know the right people.
So are you ready to learn how to become a millionaire?
Good — because I have one goal with this article:
I want you to read this and become a millionaire.
I want a million people to read this and have their lives rocked to the core.
I want a million people to share this post on Facebook with their family and friends — because this stuff changes lives.
This is about to change YOUR life, if you’ll allow it.
The One Thing That Qualifies Me to Write This Post About Becoming a Millionaire
Now you might be wondering, “Why is this kid telling me how to become a millionaire? He looks like a bearded Justin Bieber.”
So besides my beard — why am I qualified to talk about this?
Because I did it.
I don’t talk about my net worth very often, but I crossed the $1,000,000 net worth level about the same time I turned 30 years old.
I didn’t start out with a rich family. I never went to an Ivy League school. I didn’t win the lottery.
I simply (and correctly) used The Wealth Tripod.
If you want to learn how to become a millionaire — you, too, must correctly set up The Wealth Tripod.
The Wealth Tripod: 3 Things Needed From You to Become a Millionaire
In order to fully understand how to become a millionaire, you need to know what’s stopping you from achieving that status.
I know you are thinking, “Duh, Brandon! My lack of money is stopping me!”
Your lack of money has NOTHING to do with you becoming a millionaire.
Sure, over the long run, if you never begin collecting money, you’ll never become a millionaire, but that’s not stopping you today.
It’s not the balance of your checking account that’s stopping you. Or the balance of your investment accounts. It’s not your heritage, your skin color, your location, your intelligence, your lack of innovative ideas, or your bad luck.
Want to know what’s really stopping you?
In order to become a millionaire, you must change who you are. As Les Brown said, “To achieve something you have never achieved before, you must become someone you have never been.”
Specifically, there are three things about you that you must change if you want to become a millionaire. I call this “The Wealth Tripod” because without all three, you’ll never become wealthy. All three steps are required if you want to build and maintain wealth. Like a camera tripod — if one of the legs is broken, the entire tripod will fall down.
So, what are the three legs of The Wealth Tripod?
- You must believe wealth is actually possible for you.
- You must learn how wealth is built.
- You must live out the steps needed to make it happen.
Let’s spend a few minutes and talk about each of these to make sure you fully understand the importance of mastering each.
1. You must believe wealth is possible for you.
A friend of mine recently remarked, “God must have known I would be bad with wealth, which is why He never saw fit to give me any.”
While I don’t believe every person should become a millionaire (money often causes more problems than it fixes), I do believe every person has the ability to become a millionaire. This is especially true if you live in a capitalist society where the government doesn’t dictate how high you can rise.
As I said earlier, it has nothing to do with your skin color, intelligence, location, or any other excuse you might have for not building wealth.
Like my friend’s comment suggested, many people believe that because they do not currently have wealth, they do not have the ability to gain wealth.
The fault in this thinking, however, is made clear in this simple quote:
Who you are today is the sum of all the choices you have made up until this moment.
Think about that for a second. Reread it a couple times. Everything you have, everything you believe, and everything you are is a result of the decisions and actions you’ve made previously.
- If you are overweight, it’s because you made poor food or exercise choices.
- If you are too busy, it’s because you took on too many commitments
- If you are broke, it’s because you spent more money than you earned.
While that might sound depressing, that’s actually some of the best news in the world! Because although this principle reveals the source of all negative aspects of our life, it also reveals the positive changes that can happen if we only change our choices going forward.
Think about it:
- If you are overweight because of poor food choices, you can choose RIGHT NOW to change your diet and exercise.
- If you are too busy, you can choose RIGHT NOW to say no to things that monopolize your time.
- If you are broke, you can choose RIGHT NOW to change your earning and spending habits.
A total life transformation won’t happen overnight, but it will start to slowly take shape with each choice.
Think of a rocket blasting off into space. A course correction of a single degree can mean the difference between landing at the International Space Station and colliding with the sun. In the same way, a course correction in your life, starting today, can result in a massively different future than before.
Therefore, understand that just because you aren’t a millionaire yet doesn’t not mean you can never become one.
…as you’ll discover throughout the rest of this post, becoming a millionaire is NOT a secret any more than losing weight is a secret.
Becoming a millionaire is a learnable skill, just like getting a six-pack, beating Super Mario Bros, brewing a great cup of coffee, or driving from New York to Argentina.
Anyone can learn the skills necessary to become a millionaire.
The problem is…
…we are not taught how to become wealthy because we live in a society run by people who do not know that building wealth is a skill.
In school we are taught:
- How to add and subtract
- How to color a picture
- How America was “discovered”
- How to figure out the square root of a number
- And a lot of other sometimes “useful” things
But what you were never taught was how to become a millionaire.
Most of us were never even taught how to balance a checkbook, how to avoid credit card debt, or how to live on less than we make!
Why isn’t that stuff taught in every high school in America?
Why isn’t wealth building a topic of conversations between teachers and students?
Why isn’t financial stability the most important class a student can take?
The simple answer is this: The teachers are just as clueless as the rest of the world when it comes to wealth. The teachers, principals, school boards, and parents have never been taught about The Wealth Tripod. They don’t believe wealth is possible for them or their students. They don’t know how to begin building wealth. They don’t know how to become a millionaire. And they don’t take the steps necessary to build that wealth.
Simply put, they teach what they know and don’t teach what they don’t know.
But let’s not blame the teachers.
There are thousands of books out there about building wealth.
There are hundreds of podcasts.
There are millions of blog posts about wealth building.
And there are millions who have journeyed successfully down the wealth path and have become millionaires. Many of them started in worse situations than you find yourself in today. Just look at Mark Cuban (Shark Tank judge and owner of the Dallas Mavericks), Larry Ellison (the billionaire founder of Oracle), Howard Schultz (CEO of Starbucks), Oprah Winfrey, and countless other examples. They rose from poverty to become exceptionally wealthy.
So it’s not the fault of the teachers. The responsibility lies solely on the student. If a person truly wants to become a millionaire, they can.
But they first need to believe.
So — do you believe yet that wealth is possible for you?
I hope so. Because it completely and totally is. The only thing stopping you is you.
Now, hopefully at this point, you have your head screwed on straight and you believe wealth is possible and maybe even probable for you.
But we’re not done yet.
To revisit the “six-pack abs” analogy again, it’s not enough to want it or to believe it’s attainable. That’s only the first step. You have to know how to get those abs — in a world full of bad information.
In the same way, if you believe in your heart that wealth is possible but don’t take the steps necessary to learn how to get there, you’ll remain broke forever.
So let’s move on and discuss the second leg of The Wealth Tripod.
2. You must learn how wealth is built.
Building wealth is not a mystery.
It’s not something you stumble into. It’s not something you find.
Wealth building is a process that can be studied, learned, and mastered. (Tweet This!)
This is why you’ll often hear highly successful people say, “The first million is the hardest.”
Like riding a bike, once you learn it, you can repeat it over and over for the rest of your life.
Now, while I would love to just type up an easy, five-step process for building wealth, it’s not that easy.
Because there are a LOT of ways to build wealth. Every millionaire has a different story of how they made their millions. To chronicle every single possible strategy for making millions would take a lifetime to type.
…we can boil down all those avenues to make it a bit easier to find your ideal path to becoming a millionaire.
In my estimation, there are really three primary ways to become a millionaire.
Yes, just three. I told you this would be simple (but not easy).
Yes, there are millions of strategies you can use to become a millionaire, but they can really all be combined into three buckets. You’ll be hard pressed to find someone who made millions who doesn’t fall into one of these three often-interconnected categories.
Those categories are:
- Personal Finance
- Real Estate
If you want to build wealth, you will need to do so in one, or all three, of these buckets.
In a minute, we’ll dive into each more specifically. But first, let’s talk about the last leg of The Wealth Tripod.
3. You must live out the steps needed to make it happen
Let’s pretend for a moment you are baking a pie.
You might have the confidence and belief that you CAN bake that pie.
You might have the recipe for baking that pie.
But let’s be honest: The pie is not going to bake itself. You need to get in the kitchen and start cooking.
The same is true for becoming a millionaire and The Wealth Tripod. You can believe you can build wealth and learn the steps to do so — but still fail if you don’t take action.
Action will always be the final key to success. Without it, you have nothing. No one is going to give you a million dollars, no matter how smart, talented, or lucky you are.
You have to get out there and work for it.
Specifically, this means taking daily action.
A lot of people believe that the secret to success is found in “big events” — but in reality, it’s found in daily tasks that are combined together to create that big event.
Take this blog post, for example. I didn’t just sit down and write this one day. I spent nearly a month, working almost every day, on this post.
Little by little, every day.
The same is true for whatever method you use to build wealth. Whether you choose the personal finance method, the business method, the real estate method, or all three — set aside time each and every day to work your system.
Now, just to recap on The Wealth Tripod — in order to build wealth, you must:
- Believe wealth is actually possible for you.
- Learn how wealth is built.
- Live out the steps needed to make it happen.
If you lack any of these three legs of the tripod, you are unlikely to ever become a millionaire. Your tripod becomes a… dipod? It tips over. Boom.
But work all three correctly — and you have the simple recipe for success.
Now, I mentioned a moment ago about the three different buckets that people build wealth within. Now, I want to take some time to dive into each of the three buckets, one at a time, to share the best ways to become a millionaire using that strategy.
Are you ready to become a millionaire?
Let’s do it.
Bucket #1: Becoming a Millionaire Through Personal Finance
When I say the phrase “personal finance,” what comes to mind?
Paying your bills?
According to Wikipedia, “Personal finance is the financial management which an individual or a family unit performs to budget, save, and spend monetary resources over time, taking into account various financial risks and future life events.”
But hang with me! This is the first step in becoming a millionaire.
Personal finance must be mastered if you are going to succeed at either of the other two categories, business or real estate. Without a firm grasp on your personal finance, you’ll shoot the cow before it begins producing milk.
Even if you managed to make a million dollars, you’ll never hang onto it without understanding personal finance.
Personal finance is the foundation upon which wealth is built. (Tweet This!)
So what do I mean when I talk about personal finance?
Well, personal finance includes all of the following and more:
- Living on less than you earn
- Having a budget and sticking to that budget
- Understanding how to save money
- Understanding how to invest money in passive investments like stocks, bonds, and mutual funds
- Using 401ks, IRAs, and other financial products intelligently
- Using credit wisely, if at all
- Keeping up a solid credit score
- Tax planning and strategies
Now, if you just read that list and found yourself overwhelmed, don’t worry: You don’t need to master it right now.
Personal finance is an ongoing pursuit where you can never fully know everything. I’m sure even Dave Ramsey learns new things every day.
Knowing vs. Doing
“But Brandon,” you say, “I already know all about saving money.”
Good. I know all about getting that six-pack, but you don’t see me getting any more in shape.
Because personal finance is not about knowing, it’s about doing.
We all know we should save money.
We all know we should have a budget.
We all know we should be improving our credit score.
But how many people are really doing those things?
“I’ll save more when I make more” is the common excuse used by millions of people who suffer in debt. But the sad truth is, bad debt is just as prominent with the wealthy as with the poor.
Because in today’s economy we don’t have a debt problem — we have a greed problem.
We live in a culture that tells you your smart phone is no longer good enough six months after you purchased it — a culture that says you need to drive the best cars we can afford, live in the best house we can afford, stay in the best hotels we can afford, and live the best life we can afford.
This desire to maximize our lifestyle to fit within our income doesn’t change no matter how much you make.
And I’m not just yelling at you. This year my income went up, so I bought a bigger house! This is what we all tend to do.
Now, I’m not saying you cannot have nice things. I don’t regret the decision to buy a bigger house — because there is more to life than money.
Mastering personal finance is not about saying “no” to everything money can buy, but taking control of your money so you make the decisions.
It’s about stepping up and making your money listen to you, not the other way around.
Only by mastering your money will you able to become a millionaire — and keep it that way.
Now, personal finance is more than just a foundation. Personal finance is, as I said, one of the three buckets you can use to actually become a millionaire.
So, how can someone become a millionaire through personal finance?
Saving Yourself to a Million Dollars
Simple: A person could save and passively invest themselves to a million dollars.
I have known many people who lived frugally for many years, saved their income, invested their money in passive investments, and found themselves with a million dollars in net worth. They never started a business, they never bought an apartment building, and they didn’t win or inherit it. They simply used a firm grasp on their personal finance to become a millionaire.
Dave Ramsey, the popular radio personality, is perhaps the most influential proponent of this wealth-building strategy.
His “Seven Baby Steps” have guided millions of people to get rid of debt, live below their means, invest carefully, and reap the rewards later.
Now, living responsibly doesn’t necessarily mean living frugally.
Yes, I will live below my means.
Yes I will save my money.
Yes, I will have a 401k, use IRAs, and keep my credit score up.
However, I’m not going to make my own soap to save $1. I’m not going to ride my bicycle everywhere I go so I don’t have to pay for car insurance. I’m not going to sew my own clothes, eat ramen noodles, or sacrifice my love of travel.
I live financially smart but not financially frugal.
And yes, I could have saved to get myself to a million dollar net worth. A lot of people take this route, and great for them! Nothing wrong with it.
The Problem with Personal Finance to Become a Millionaire
For me, however, relying only on the personal finance method of becoming a millionaire was not enough. It is a solid foundation, but it’s not the only strategy I relied on.
Because it takes a LONG time.
When I was twenty-one years old, I was making minimum wage at a job that I hated.
Yes, I could have lived on rice and beans for years, saved $500 a month and invested it in the stock market. Over time, I’m sure I would get raises, better jobs, etc.
But it still would take a long time.
This is the downside of relying solely on personal finance to make you a millionaire — it is slow.
There is nothing wrong with getting rich slow. In fact, I still follow this path because it is my “insurance” against the other methods not working out.
But I don’t want to save for forty years, only to have a retirement I’m too old and tired to enjoy it.
In the book The One Thing, authors Gary Keller and Jay Papasan tell the story of a couple who scraped and saved money for many years in preparation for a retirement full of travel and leisure. However, just before they retired, the wife received the dreadful news she had cancer, and before she was able to take a single trip, she was gone.
There are no guarantees when it comes to our future and how long we’ll be here. I want to enjoy life now, I want to enjoy life in twenty years, and I want to enjoy life when I’m 100.
And this is where the other two methods for building wealth come in handy.
So lastly, before we move on and talk about business and real estate, let me summarize what we’ve talked about with personal finance:
Having a foundation in personal finance is necessary for becoming (and staying) a millionaire. Living on less than you make, saving, investing, and controlling your money are vital skills for growing and holding onto wealth.
Now, let’s talk about the second bucket that people use to become millionaires.
Bucket #2: Becoming a Millionaire Through Business
In many of my favorite childhood movies, the bad guy was a businessman.
Usually they smoked, were overweight, and sweated a lot.
I didn’t understand how anyone could possibly enjoy that lifestyle. Getting on planes, meeting with angry people, walking around in suits all day.
It sounded miserable.
Fast forward twenty-some years, and suddenly I realize: I’m in business. Right now.
And it’s fantastic!
Business is a sport, a thrill ride, a puzzle that needs solving.
It allows you to create wealth out of nothing but your mind, helps you build something bigger than yourself, and keeps the part of your soul alive that longs for continued improvement.
In short: business is awesome.
And business is how you will likely become a millionaire.
Common Types of Businesses
There are a lot of ways you could become a millionaire through business. While I don’t want to waste a lot of time talking about every single one of those ways, let me give you a quick summary of a few of the most common ways people build wealth through business:
(Keep in mind, the lines are fuzzy between these categories, and most businesses engage in multiple strategies.)
Buy Wholesale Products and Sell Retail
Whether it’s a brick-and-mortar store, an online eCommerce business, or simply selling a product on Amazon, buying products from a manufacturer or distributor and selling them to customers is one of the most tried and true methods for succeeding in business.
Websites like Alibaba.com can help you source low-cost products from around the world (prices that would shock you), and there are numerous ways you can go about selling them for (much) higher prices.
- A man decides to buy baby mattresses from China for $13 each, import them to the US, and sell them on eBay, Amazon, and Pinterest for $59 each.
- A husband and wife team opens up a shoe store to sell high-end shoes in the university district of their town.
- A woman joins a multilevel marketing business that sells makeup products to existing relationships in her life.
Create Something and Sell It
Another way people make big money in business is through the creation of products. This could mean simply creating those products and licensing other companies to produce them. Or it could involve creating something and selling it yourself.
- A person builds a brand new house and sells that house on the open market to a retail buyer.
- A factory manufactures dog toys and sells them in bulk to a distributor who then sells them to Walmart.
- A man creates a website that helps people learn about investing in real estate and charges a monthly subscription fee for a Pro membership that gives people access to some of the incredible tools offered on that website. 😉
Provide a Service
Many people build wealth through the process of serving others and getting paid for that service. Consultants, restaurant owners, plumbers, and other similar vendors see a need and provide their own services in exchange for pay.
- A woman opens a commercial architectural drawing business that draws up the blueprints for large office complexes.
- A man opens a handyman business that caters to property management companies.
- A retired salesman offers to coach up-and-coming salesmen for a fee.
While these three are the most common types of businesses, there are many other kinds. For example:
- Lending money
- Being an agent representing someone else in a transaction
- Offering an insurance product
- Royalties from music, books, or other created works
In addition, most businesses utilize more than one business model under their roof. For example, is a coffee shop a wholesale-retail business, a new-creation business, or a service business?
From where I sit, it is all three.
Hopefully now you understand the basics of what a business is and how it can make money, but now for the bad news: A business (alone) will not make you millions.
A Business (Alone) Will Not Make You Millions
There are a lot of broke business owners out there.
Good people who are struggling to make their business work — and failing miserably.
So, if business has such a high failure rate, why are we talking about it as a good way to build wealth?
Because for those who get it right, it’s life changing. Business truly can make you a millionaire and help you work less and have more time to spend with your family. More time to enjoy your hobbies. More money to travel and more money to give to others.
But just having a business is not enough, as the statistics show. You must make that business a success — which is trickier than it might seem.
So to talk about how that’s done, I want to ask you five questions.
5 Questions to Ask Yourself Before Starting a Business
1. Is there a market for your business?
I don’t care if you think you are the best dog-walker in town. If your market (the people and businesses who might pay you money) doesn’t need dog-walkers, you’ll be quickly out of business. Success business owners create businesses that fulfill the needs of the market — not the desires of their own hearts.
2. Is is scalable?
In other words, can you create systems that work within your business and function with or without you? Can your business grow without you being involved in every aspect? Or are you simply building a job with an income cap? Yes, you might be able to make a living with a business that revolves only around you, but you’ll likely never scale to a level that will make you incredibly wealthy. Treat your business like a machine that has replaceable parts, and seek to make that machine run as smoothly as it can.
3. Are you passionate about it?
You won’t become a millionaire overnight through businesses. It will potentially take years of hard work, along with numerous setbacks and disappointments. If you are trying to build something you have no passion for just because you think it will make you money, it will be hard to sustain the grind during the tough times.
4. Are you willing to pivot?
In the business world, it’s hard to predict exactly what your customers are going to want to buy. People say and do different things — thus the need to pivot. The word “pivot” was made popular in the book The Lean Startup by Eric Ries, and it essentially means to shift the core functions of your business to accommodate the needs of your customer.
For example, you might think your idea of selling yoga mats to high school kids is an incredible idea, but if the only ones buying your mat are auto-mechanics needing something soft to lay on, will you pivot to what the market is actually demanding? Too many business owners are so attached to their idea they let their business slide into oblivion because they think they know the best use of their product or service.
5. Are you willing to continue learning?
Business owners are often arrogant and believe that “what got them here will get them there.” In other words, they refuse to learn and grow, thus allowing competitors who are growing to pass them up and destroy them. So are you willing to accept the fact that you will never be able to stop learning, growing, testing, tweaking, and improving your business?
In order to become a millionaire from business and not end up the large percentage who fail, you must succeed at business where others have failed.
The One Business Principal To Rule Them All
If there is one business principal that above all else will help ensure your business grows and generates millions of dollars for you, it’s this:
All business is a funnel, so identify yours and maximize each step.
That simple statement is the difference between making millions and sleeping on your mom’s couch.
As I said in a recent article I wrote on Entrepreneur.com, “a funnel is simply the path that your customers, clients or leads progress down, starting with your first interaction and ending with your goal being accomplished. As the name would suggest, a funnel is wider at the top and narrows as the prospect moves through it.”
Let me give you a few examples of funnels:
- A magazine ad for a high-end watch is delivered to 500,000 households. Of those 500,000, only 100,000 actually physically see the ad on page 43. Of those 100,000, 1,000 of them go to website to get more information on the product. Of those 1,000 website visitors, 5% (50 people) end up buying the $1,000 watch, bringing the company $50,000 in revenue.
- There are 100,000 people who live in your town. Of those 100,000 people, 33,000 have dogs. Of those 33,000 who have dogs, 2,000 of them have heard of your dog-walking company. Of those 2,000 people, thirty of them hire you to walk their dogs at an average of $50 per month. Total monthly revenue: $1,500 per month.
- Your denim storefront in the busy part of your city has 5,000 people walk in front of it each each day. Of those 5,000 people, 100 of them walk into your store today. Of those 100 people, 20 purchase something at an average cost of $100. You made $2,000 today.
Some funnels are obvious, whereas others are much more difficult to define — but rest assured, your business idea has a funnel (and probably many funnels).
So how do you become a millionaire through funnels? You identify your funnels and then you maximize each step. It truly can be that simple.
To use one of the examples we just talked about — the dog-walking business — let’s look at the funnel in a bit more detail:
- People in your town: 100,000
- Number of households with dogs: 33,000 (33%)
- Households who have heard of you: 2,000 (6%)
- Number of households who have hired you: 30 (1.5%)
- Average revenue per household: $50
- Total business revenue: $1,500/month
Now that we’ve identified the funnel, it’s time to maximize it. This simply means that we look at each and every step in the funnel and try to determine the best way to increase our conversion percentages or increase the revenue.
While there is not much we can do about the first two steps of the funnel (besides encouraging town growth and dog ownership), we CAN make some changes to the third, fourth, and fifth steps in the funnel.
Well, that’s exactly the right question(s) to ask! See, most business owners never think this deeply about their funnel. Failing business owners often have just one question on their mind, and that’s “how do I make more money?”
But that’s the wrong question to ask! When you have the right questions, you can more easily find the best answers.
So, if currently 6% of all dog owners have heard of your business, how do we increase that percentage to, let’s say, 9%? Perhaps advertising, such as a billboard or direct mail marketing? Perhaps asking for referrals from current customers? Perhaps through writing incredible blog posts and encouraging them to go viral on social media? There are hundreds, if not thousands, of correct answers to this question of how, and as the expert in your business, it’s up to you to decide.
What about the next part of the funnel? How do we increase the percentage of people who hire you of those who have heard of you from 1.5% to, let’s say, 2%? Again, identifying the question is half the battle, so now it’s time to brainstorm. Perhaps you can take a class on sales or simply hustle harder or hire a salesperson to talk to prospects. Again, you’ll figure it out now that you have the right question to ask.
Finally, how do we increase the average revenue per household from $50 a month to, let’s say, $75 per month? Perhaps you offer some additional services, such as grooming, feeding, or more walks?
Now, it might seem like those small changes would not amount to that big of a change in your business. But let’s do the math and compare the two funnels, side by side:
# of people in your town: 100,000 100,000
# of households with dogs: 33,000 (33%) 33,000
# of households who have heard of you: 2,000 (6%) 2,970
# of households who have hired you 30 (1.5%) 74.25
Average revenue per household: $50 $75.00
Total business revenue: $1,500/month $5,568.00/month
So just by tweaking those three small things, we increased the income from $1,500 per month to $5,568.
“But Brandon,” you say, “That’s not a million dollars!”
Correct, it’s not… yet. Remember, the learning never ends. So what if you could get your name in front of not 9% but 20% of dog owners? What if 6% of all of those hire you? And if you begin making $150 per month, on average, from those customers?
Don’t worry about doing the math — I did it for you: $59,400 per month in revenue or $712,800 per year.
Now, how do you get there? Well, you have the process for figuring that out. It’s not my job — it’s yours.
Your Business Ideas Are (Mostly) Worthless
Ever had an idea and then saw it on the shelf at a store a few years later? What did you half-jokingly say to everyone around you? “They stole my idea!”
Of course, the inventor of that product has never heard of you. But you can’t help but feel that you were cheated. It was your idea!
But here’s the truth: Your ideas are worthless. If it’s a good idea, most likely many other people have had the same idea. So why do some people make millions of dollars on a business idea and you don’t?
It’s one thing: Implementation is all that matters.
You could have the best idea in the world, but if you fail to implement it, you’ll likely fail entirely.
On the other hand, if you have a mediocre product or service and you are a god at implementation, you’ll likely do incredibly well (just look at most “as seen on TV” products).
But best of all, if you have an incredible idea and you match it with incredible implementation, you’ll be unstoppable. That’s how you become not only a millionaire — but a billionaire.
As Tony Robbins says, “You don’t lack resources, you lack resourcefulness.” So stop complaining about someone taking your idea — because your idea doesn’t matter much. Instead, start implementing.
Incredible Business Books
OK, enough on business. If you want to get more information on growing a successful business, I’d recommend the following books:
- The E-Myth Revisited by Michael Gerber
- The 4-Hour Workweek by Tim Ferriss
- The Lean Startup by Eric Ries
- The Ultimate Sales Machine by Chet Holmes
- The Personal MBA by Josh Kaufman
Now, let’s move on and talk about the final way to build wealth (and my personal favorite) — real estate investing.
How to Become a Millionaire Through Real Estate Investing
Real estate investing saved my life.
Growing up, I had never considered anything other than the path chosen by most: go to college, get a good job, save up your money, retire when you are old.
Because of this mentality, after graduating from college, I began studying for law school, assuming that was the logical choice for a history major. However, the more and more I heard from existing lawyers, the more that path began to scare the hell out of me. Eighty-hour work weeks, two weeks of vacation, never seeing my family — that was the path I was headed down.
Something inside me screamed in opposition, but I saw no other choice. Until real estate hit me like a ton of bricks. You see, I had purchased a cheap house while studying for law school, and one day it hit me: I could sell this house and make money.
So I did.
And it changed everything.
Forget the 80-hour workweek of being a lawyer. I was working the 100-hour workweek of a real estate investor — and loving every moment of it! Although I stumbled a lot, made a lot of stupid mistakes, spent years working on projects that netted me NO money, and never seemed to actually have any cash to spend, I was excited. I was creating my own future and building wealth and financial freedom at the same time.
At twenty-seven years old, I had enough passive income that I could quit my job and live solely on the cash flow. I was “financially free.”
How Can Real Estate Make You a Millionaire?
Real estate can make you a millionaire — but it’s not guaranteed. It takes the right investments, the right plan, the right people, and the right strategy. However, real estate HAS made many millionaires out of average people, and it can make you one as well. So let’s talk about how.
As I discussed in my recent book, The Book on Rental Property Investing, there are four primary “wealth generators” at play when you invest in real estate, depending on the strategy you get into:
- Cash Flow. This is the extra income you’ll get to keep each month (or year) that you own the property. Cash flow can be deceptive because it fluctuates when certain repairs are higher or lower in different months, so it’s important to factor in non-monthly costs like vacancy (the amount of time the property sits vacant), repairs, capital expenditures (expensive projects that need to be replaced on a home every so often, like appliances, roofs, windows, plumbing, etc.), along with the regular expenses (utilities, management, etc.).
- Appreciation. When the value of a property increases, we call this “appreciation.” While appreciation is not always guaranteed (just ask people who bought in 2006 and sold in 2010!), over time, historically, real estate has always increased in America, averaging 3% per year over the past century. Another type of appreciation that can come into play is known as “forced appreciation,” the concept of increasing the value by physically improving the property.
- Loan Paydown. When you buy a property with a mortgage, each month your loan balance decreases. This means, over time, your tenant is essentially paying the loan down for you, helping you build wealth automatically. To make this concept clearer, pretend for a moment you owned a property that you bought for $1,000,000 with a mortgage for $800,000, and it made $0 in cash flow (it “broke even”) and never climbed in value. However, after that thirty-year mortgage is paid off, you’ll now have a property worth $1,000,000 that you didn’t actual save for. Your tenant paid it off due to the “loan paydown.”
- Tax Benefits. The final wealth generator from real estate are the tax benefits associated with owning property in the United States. The U.S. government likes real estate investors and uses the tax system to encourage our purchase and leasing of properties. From extra tax write-offs to the lack of “self-employment tax” to the 1031-exchange and more, real estate investors can pay significantly less tax than other business owners, using the extra cash to buy more properties or pay of the loan faster — helping to build greater wealth.
Of course, just buying some real estate will not give you all of the above benefits. Different strategies in real estate will give you different benefits. For example, when you “fix and flip houses,” you are most likely not paying off a loan, thus you will not get the benefit of the “loan paydown” nor are you getting cash flow or many tax benefits. Instead, flipping relies mostly on the “forced appreciation” you get by fixing it up.
One of the reasons I love rental properties so much is because they may capitalize on all four of the wealth generators — if you buy it right. Let’s use a quick example:
Jenny wants to build wealth through rental properties. So Jenny finds a duplex for $250,000 in her neighborhood. After running a careful analysis, she determines that it is a good deal. Jenny uses a $50,000 down payment and obtains a 30-year loan for $200,000. Combined, both units bring in $3,000 per month, but Jenny’s expenses average just $2,500 per month, leaving her with $500 per month in cash flow, which increases each year as rents climb with inflation. Although that income is taxed, she doesn’t have to pay any because of the depreciation deduction she gets on the property, thus part of the tax benefits of owning it. Over the next 30 years, the value of the home increases to $600,000 (a 3% per year increase due to appreciation). Finally, each year during those 30 years the loan has been paid down, and Jenny owns the duplex free-and-clear. She now has an asset worth $600,000, plus she’s making thousands per month in cash flow.
This example above is not “pie in the sky” numbers — these are real life options when you buy the right deal and utilize all four of the four wealth generators. Imagine what Jenny’s net worth would be after 30 years if she had purchased two duplexes — or four, or twenty of them early on.
Now, of course, no one wants to wait 30 years to become a millionaire. So how do you speed up this process?
Well, there are a few ways you could speed this up:
- Get a better deal. In the example with Jenny above, what if she was able to negotiate stronger and get that same duplex for $200,000 instead of $250,000? This would supercharge her growth.
- Buy more deals. Jenny could have also purchased more properties. Perhaps she would buy one each year.
- Buy in appreciating areas. While I used a 3% average for appreciation, Jenny could have researched job growth and other growth indicators to find an area where appreciation would be higher, perhaps 5-8% instead of 3%.
- Force appreciation. Jenny also could have purchased a fixer-upper property that she could improve, increasing the immediate appreciation on the property. For example, maybe she could buy it for $150,000, put $30,000 of work into it, and it might be worth $275,000 at that point. This could also increase the speed at which her wealth would build.
- Trade up. If you are familiar with the board game Monopoly, you’ll know the value in trading from four houses to a hotel. The same is true in real estate. Jenny could upgrade to bigger/better deals every few years to maximize her return. This is perhaps one of the fastest ways to achieve wealth through real estate — and if you want to know more, be sure to read How to Make a Million Dollars from Real Estate: A Step By Step Path.
I’ve only just barely scraped the surface on what real estate investing can do for you in your quest to become a millionaire. In fact, there are so many different paths and strategies you could take to become a millionaire through real estate that I could write a thousand books on the topic and never cover it all.
That’s why BiggerPockets exists. With over a million forum posts, thousands of blog articles, books, podcasts, and more, you could spend your whole life learning about real estate and never learn it all. And that often becomes a problem! People get stuck in “education mode” and never escape it.
I’d encourage you to not get overwhelmed, not try to learn everything. Pick one niche (like single family houses, commercial properties, etc.) and one strategy (like rental, flip, etc.), and focus on that. Read one or two books on the subject, and then start moving! Find someone local who is doing the same thing as you want to do, and take them out to lunch. Ask for help, but don’t stop moving!
The road might be foggy — but if you just keep moving forward, more of the road will be revealed.
Free Resources for Becoming a Millionaire Real Estate Investor
If you are looking for a good foundation to investing in real estate, I want to offer you a few 100 percent free resources to check out.
- The Ultimate Beginner’s Guide to Real Estate Investing [PDF]: This 20,000+ word eBook has been read by hundreds of thousands of people over the past few years. This will help give you the foundation you need to know what to do next on your real estate journey.
- A Beginner’s Introduction to Real Estate Investing [VIDEO]: This free online video course is based on the Ultimate Beginner’s Guide to Real Estate Investing but geared toward those who learn best by video content. In these 62 lessons (over four hours of content), you’ll learn all about the different niches, strategies, concepts, terminology, and more that will help you become a millionaire through real estate.
- The BiggerPockets Podcast [AUDIO/VIDEO]: Have you ever wanted to pick the brain of a successful real estate investor? That’s exactly what happens nearly every week on the BiggerPockets Podcast with hosts Josh Dorkin and… me! Listen to over 160 different guests explain how they got started, the struggles and successes they’ve had, and the strategies that are working for them to build wealth through real estate.
- The BiggerPockets Forums [Q&A FORUMS]: Real estate investing is complex — so no book, podcast, or course could answer every question you might have. That’s why the BiggerPockets Forums, the largest and most active real estate forum online, was created: to help you get real-life, real-time answers from experienced investors across the world — for free! It’s often been said that “you are the average of the five people you associate with the most.” Engaging daily in the BiggerPockets Forums can help you level-up your life by surrounding yourself with people who are already doing what you want to do.
- The BiggerPockets Blog [TEXT ARTICLES]: You’ve likely already discovered this one since you are reading a blog post right now, probably on BiggerPockets. The BiggerPockets Blog is the web’s largest collection of real estate investing articles, written by hundreds of authors over the past decade (or longer!). You’ll learn everything from how to flip houses and how to buy rental properties to how to screen tenants, how to make a million dollars through real estate, and thousands of other topics.
Real Estate Investing Benefits
It’s no secret that real estate investing is, by far, my favorite way to build wealth. In my opinion, nothing comes close to real estate in its ability to create wealth. Here’s just a quick list of some of the reasons real estate investing is so powerful for those looking to build wealth:
- Thousands of others have traveled down the real estate road and freely share their knowledge, many for free.
- Real estate is tangible — you can physically see it, touch it, inspect it, and live in it.
- People will always need housing.
- It’s simple to understand — you don’t need a PhD in Economics.
- There have been thousands of books written on the various real estate strategies.
- It is diverse — there are hundreds of ways to invest in real estate.
- It’s fun to see the transformation of a property from ugly duckling to beautiful swan.
- You directly are able to control the investment.
- Real estate allows you to invest using little to no money down.
- Real estate can give you fantastic returns on your money.
- Real estate is sexy — nearly everyone “wants to do that someday.”
- Real estate tends to climb higher in value over long periods of time.
- Real estate is a hedge against inflation — when inflation causes prices to increase, so will rent (but fixed-rate mortgages will stay the same).
- Real estate is a team sport — you don’t have to do everything yourself.
These are just a few of the benefits real estate has over many other wealth-building activities. That said, real estate investing is not for those just looking to make a quick buck. It takes time, persistence, knowledge, and sometimes a bit of luck.
But I firmly believe real estate can change your life just like it changed mine.
Now that we’ve talked about the three buckets people use to build wealth, let’s wrap up this monster post with a few final tips to aid you on your journey to become a millionaire.
How to Become a Millionaire: 10 Final Tips
Because I’ve already covered nearly 9,000 words on the topic of becoming a millionaire, I know it can be a little overwhelming.
So I want to break down this post into 10 final actionable tips to leave you with today. Some of these have already been covered, and some might be new. Either way, allow them to change your life the way they’ve changed mine.
- Believe you can do it. You can, so don’t let your limiting beliefs tell you that you are not smart enough, talented enough, were not raised in the right location, had the wrong parental instruction, or anything else. If you want it, you can get it.
- Focus on the process. Wanting to become a millionaire is great — but it’s not going to get you there. You must focus on the process for doing so. What daily actions will you take? What path will you walk down? As the late, great motivational speaker Jim Rohn said, “Life doesn’t get better by chance, it gets better by change.”
- Track your progress. UN Women Deputy Executive Director John Hendra once said, “What matters gets measured, and what we measure is what ends up mattering.” So if you are not tracking your net worth, along with the processes you have in place for becoming a millionaire, how do you plan to get there?
- Live on less than you earn. I’m not suggesting you make your own soap and avoid taking showers to save money, but focus on living responsibly. If you can’t live financially smart now, you’ll never be financially wealthy later.
- Make your money earn you money. You alone will likely never save up a million dollars. Therefore, the only way you will get there is by turning your money into little factory workers who show up each day and go out to make you more money. You can do this through business or investing — but make sure your money isn’t sitting around doing nothing.
- Learn to manage processes and people. Systems and processes are what help you scale and keep you from working “in your business” rather than “on your business.” If you don’t want to work until you are 90, you must learn to create and manage systems, as well as manage the people you put in charge of those systems.
- Live proactively, not reactively. You have two choices in life: React to life as it is thrown at you, or you can go out and create your own life, one that you define and you work for. Don’t get caught in a passive life being tossed around like a boat in a hurricane. Be the hurricane.
- Do only vital tasks. Focus on the few tasks that you do best, and either avoid the rest or leave it to other people. Bill Gates, Oprah Winfrey, and YOU have the same number of hours in a day, yet you make drastically different impacts and incomes; it’s how you use the hours given that make the difference.
- Success leaves clues. When you are trying to build wealth, there is no need to reinvent the wheel. Look to others who have come before and discover how they found success. No, it won’t work the exact same way for you, but once you understand the principles to their success, you’ll much more easily find your own.
- Level up your network. You are who you associate with. If there are four broke people in the room, chances are you’ll be the fifth. If there are four millionaires in the room, chances are you’ll be the fifth. So pay close attention to who you associate with because that’s who you’ll become.
In Conclusion: Things Becoming a Millionaire WON’T Do For You
As I conclude this post on how to become a millionaire, I want to share a few things that becoming a millionaire will NOT do for you.
Becoming a millionaire will NOT make you happy. It will not make you a better husband, a better wife, a better mom, or a better dad. It won’t fix your low self esteem. It won’t cure your illness, your weight problem, or your depression. Money is not the answer to all of life’s questions — and can even cause more problems than it fixes.
Money does, however, have some wonderful attributes. It can help you feed your family and can help you feed other families. It can help you spend more time with your family — IF you utilize your time right (there are countless stories of millionaires who are deadbeat parents). It can help you give to your church, to your political party, or to charities. It can free you from the need to answer to a boss that you dislike, the fear of knowing where the next mortgage payment is coming from, the pain of knowing you can’t afford the medication needed to help your sick spouse.
Money is not everything. Becoming a millionaire is not everything. It’s a fun goal to have — but, at least for me, it’s the journey that is the real prize. It’s making a plan and seeing your plan come to fruition. It’s knowing that “I did it.”
So do you truly want to become a millionaire?
Then it’s time to go out and get it.
After making it through this 9,000 word post on how to become a millionaire, what questions do you have? If you’ve already made this journey, what would you add to the discussion?
Let me know with a comment!