Ready to make your first million? Yup, same here. As you might have guessed from that intro, I’m not a millionaire yet, but I have been studying how to make a million and I’m on that journey too. And I’m going to share what I’ve learned with you in this post.
Now, one thing to bear in mind is that making a million dollars shouldn’t actually be your goal in itself. By that I mean if all you want is to make a million, then you’re looking at the whole picture wrong.
And the mindset is a key part of building your wealth in the long term and making that sweet million.
Yes, one million dollars is a life changing amount of money that will set you and your family up for life – so long as you don’t piss it up the wall. But lets start by looking at the mindset around how millionaires make their money.
The mindset of a millionaire
Most entrepreneurs and successful business owners don’t focus on the monetary value of their achievements, but on what they are building. By this I mean that business owners who attain wealth do so because they are aiming to become the best at what they do or to build their business to dominate their sector.
Build for success.
And the money comes after.
So you need to stop focusing on the money, and focus more on great ideas and how to build those ideas to be the best they can be.
With that out of the way, we need to look at another key reality when it comes to making a million dollars.
The path to one million dollars
You might only have $10 or $100 in your bank account today, but the trick is to understand that the path to wealth isn’t linear. That is to say that there is no straight line that will take you from whatever is in your bank account to make a million in the next year or so.
You may or may not have seen this meme which sums up the path to success pretty succinctly.
Most millionaires and billionaires have built their success over many years and then found a way to diversify or have identified another opportunity.
Let’s look for example at successful musicians such as Jay-Z, one of the best known rappers out there and a billionaire today. Although his music got him the foundations of his wealth, much of his money is in other business ventures such as his clothing line. He also has a stake in music streaming platform Tidal, and also owns stakes in sports clubs and property.
So while raw talent got Jay-Z a long way to the top, his savvy business mind cemented his position on the rich list, where he remains to this day.
The takeaway for you?
Always be on the lookout for an opportunity to diversify and make your money work for you.
Read our guide, how to be a playboy.…
OK – let’s look at the steps to go from one dollar to a million.
Step one: Building your foundation
For most people building their fortunes, the first step is to have some money coming in that can be used to get them started. This might sound like an obvious statement, but the adage that it takes money to make money is what we’re looking at here.
The money you might be using to get started could be:
- A day job
- Profits from an investment
- Proceeds from a business you’re running
- Money invested by partners or people who are backing you
Yes, even a low paid day job could be the first step on your path to make a million dollars.
Whatever your income looks like, find a way to save money and identify ways to diversify. In short, how can you make your money work for you to make more money?
Your day job is unlikely to make you a millionaire, even if you’re a high paid lawyer, engineer or doctor.
Many people these days start with a side hustle. It might be flipping products in eBay, or selling stuff on Etsy, or it might be offering business coaching, or investing in small scale startups on Kickstarter.
But because making a million dollars doesn’t happen overnight, taking small steps to build more income will help you start investing in your journey faster.
Step two: Diversify your investment
With money coming in, you can plan where best to invest your income to add more revenue streams because this is going to be key.
So where do you invest this money?
- A high interest savings account
- Funds to start your own business
- Investing in a startup
- Speculative investments such as stocks or crypto
Let’s look at each of these closely.
High interest savings accounts
Placing some of your money into long term investments is a no-brainer. This money will accumulate additional value over time, meaning that in the worst case scenario, you are building a pot of money to support you once you’re older.
What’s the good of being a millionaire when you’re older, you might be asking? Well, you don’t want to be hustling for new income streams when you’re 60 or 70, right? So achieving your status as a millionaire by then is absolutely a life win.
Starting a business
If you’re not already a business owner, this is going to be one of the most important steps to make your first million. Whatever business model you choose to start, growing a business is probably the most likely and realistic way you’re going to make that 1 million bucks.
What kind of business? Well, that’s up to you. But anything that stands a chance of generating revenue for your own efforts, and not someone else, means you’re on your way to a million bucks.
Investing in someone elses business
You might have heard of Angel Investing, or venture capital. These are basically terms for investing in another business to help it to grow, with the aim of earning dividends from their future success. While this might sound easy – find a good startup, give them your money and wait for them to pay you back with interest… The truth is there is much more to it, and the world of venture capital is very complex.
But, if you have an eye for spotting businesses worth investing in, you could build some extra income to your portfolio for the long term.
While the financial markets have long been seen as a way to make huge sums of money, the truth is, again, that it’s much more complicated than that. Buying stocks or crypto projects and waiting for them to increase in value can be part of your investment portfolio in your quest to make that million dollars.
But as we shall see, there is a lot more than just buying a few stocks and waiting for them to become your retirement savings.
But that being said, having some investments with an eye on future income is definitely an important step on your journey to one million dollars.
Step three: Be clever with your finances
So it might sound counterintuitive, but if you want to make a million dollars, you’ll need to watch what you spend. The more you spend money on stuff, the less you will have to hit those million dollar dreams.
Obviously, we want to make the most of the high life and enjoy the trappings of financial freedom.
But look at most millionaires and they are very careful with their spending habits. Of course you want to enjoy good food, nice holidays and to look good. But the trick is not to be excessive for the sake of excess.
Although being showy, wearing designer labels and ‘flexing’ is a large part of modern culture, the truth is most of this is done for show. Genuine millionaires and billionaires are often more focused on their business goals and less on showing people how rich they are.
If you want to enjoy the trappings of success on the way up, of course you can. And the tip is….
Budget your big expensive purchases as part of your journey.
The reason for this is that as you build your money, you want to be more careful with how you save and what you ‘waste’ money on.
In short, your cash flow is more than whats coming in. You’ll need to watch whats going out too.
Step four: Make your money work for you
Ask any millionaire and they’ll tell you that making money from key investments is essential to their financial success.
Making your money work for you also falls under the banner of diversifying your business portfolio as mentioned above. But there are other ways to boost your personal capital wealth on your journey to a million dollars.
Real estate investing
Every millionaire knows that the sensible money is in property. With real estate, you have a solid investment that will accumulate in value over time, and can even make you money as a rental property.
Of course, we don’t all want to be landlords for a living, so being savvy with your real estate investment is key here.
As soon as you can afford to buy property to live in then you should. If you’re not already a property owner then this is often the goal for most people.
And although you will often put a deposit for your real estate investment in the form of a mortgage, meaning debt, this is actually a wise debt to take on.
Even if interest rates go up or down, you are still paying off the value on your own property and you can even use the value of property as a down payment on additional property over time. This is known as remortgaging, and allows you to unlock the capital that you’ve paid off to invest in more property.
Property investors will often buy empty land as part of their portfolio with the aim of developing it for construction. This is the most profitable way to boost your real estate investing portfolio.
There are many different elements to consider when it comes to buying land to invest in, which we’re not going to cover here. But if you want to hit the multi-million dollar mark fast, you will probably take real estate investing seriously.
Invest in people
Another clever way to make your money work for you is to invest in people who have great ideas. This is also known as Angel Investing, and is a popular way for millionaires to help people build their business, and to make more money for themselves too.
By identifying a business investment opportunity, you are often investing in a person and their business plan. But successful investors can often spot other potentially lucrative investments and can even mentor these people on their way to success themselves.
You don’t need to have one million dollars in your bank to do this either. You might have $100,000 or so. But if you can spare a few thousand, you could be building relationships, building businesses and building your portfolio.
Step five: Be prepared to fail
No one makes a million dollars overnight. The truth is that one the journey to make a million dollars, most people fail multiple times. So don’t be afraid of failure.
The difference between wealthy people and those that never make it is that they understand that failure is an opportunity.
Although the key is to take calculated risks, not every risk will pay off.
You might invest half your money into a project that you’re sure will be a success. But then it fails and tanks, taking half your money with it.
Or, you might miss an opportunity, fall out with a business partner, sell your business for much less than it’s worth or end up with a costly divorce or legal problem. These things happen and they are all part of the journey.
The route to success is not linear. There are pitfalls along the way and understanding that you’re going to fail at some point is key to managing your mindset and your wealth in the long term.
Some steps to take to make sure that if you lose money, you don’t lose it all:
- Never invest all of your money into one project
- Always do your research into new projects or investments – successful people never rush into things
- Play by the rules. Fraud and illegal activity will catch up with you sooner or later, and if you have broken the law or exploited people, you stand a very high chance of losing everything
- Don’t invest in something you don’t understand. If you want to move into a new potential new area, take the time to build your knowledge. Don’t be afraid to ask tons of questions and be aware that you are never the smartest person in the room (even when you are)
- Get rick quick schemes usually only make the person selling the scheme rich. Does it sound too good to be true? It probably is. Ask tons of questions, speak to people and dig around and that ‘great opportunity to make money fast’ will likely be exposed as a sham
- If you’re working for someone else then you are at their mercy. Having a job means you can be fired. Find ways to make your money work for you….
Understanding the route to one million dollars
While making a million dollars seems like a big number, and a long way to go, things seem less daunting when you put them in perspective.
For example, to make one million dollars in one year, you’ll need to make $2740 every day.
Or, to make a million in one year, you’ll need to make $83,333 every month.
And of course that excludes living costs, bills and other outgoings.
How about over 5 years? Well, those numbers looks a bit more manageable. To make a million in 5 years you’ll need to be clearing at least $16,666 every month, or around $555 every day.
Give yourself ten years and you only need to be saving $8333 every month to hit your million dollar goal.
Put your route to a million in simple and manageable steps and it will be much easier to get there…
Start with our guides: How to make $1000 every day or business ideas you can start under $500.
Ideas for businesses to make a million dollars
So you want to make a million dollars but you don’t know how to start? The best thing to do is to read books, listen to podcasts and analyse how successful people made their money.
The truth is there are opportunities to make money everywhere these days. And they’re not always obvious.
If you’ve never listened before, check out podcasts such as Diary of a CEO, Freelance to Founder and The Side Hustle Show.
But you’re here for some ideas to make more money (and maybe even hit that million bucks).
So here you are.
- Build a business support agency – this can be offering SEO, video production, lead generation or outsourced HR services. Many businesses will pay good money for people to manage these complex and time consuming tasks for them. Get more clients with our B2B guide.
- Create a food or drinks business. Yes, this is a highly saturated niche, but food and drink are always in demand. Identify a niche and exploit it.
- Become a financial trader. This is not an easy path to success, but it can be lucrative. Be aware that many people lose money trading stocks, forex or crypto – but for those that take the time to study, improve and hone their skills, it is a profitable niche.
- Build a software product. There is high demand for quality software in sectors from health care or construction to hospitality or travel.
- Take advantage of new trends. For example in 2020, we saw the explosion of TikTok. And in 2023 we’ve seen the growth of AI. Develop an analytical mind and try and find opportunity in whatever new trends are coming our way…
And these are just a small handful of ways you can hit that six or seven figures before you know it.
When it comes to how to make a million dollars, it’s all about identifying opportunity, taking calculated risks and not being afraid to fail.
Never put all of your money in one investment, and take time to study successful people.
I’ll see you at the Playboy’s club! Cheers.