A lot of people would be happy to be millionaires and I am one of them. But being one seems too challenging and kind of too far away, especially if you are someone not making a lot of money.
That is why today I am going to show you a different, more systematic approach on how to become a millionaire.
Let’s say you have a £1,000 – a number which most of the people have. Now let’s calculate how many times we need to double it in order to reach that million.
1. £2,000
2. £4,000
3. £8,000
4. £16,000
5. £32,000
6. £64,000
7. £128,000
8. £256,000
9. £512,000
10. £1,024,000
The answer is 10 times
I don’t know about you, but the first time I realised this, a million didn’t seem that far away anymore . All I need to do is manage to double my £1000 ten times. Yes, of course, it is not going to happen overnight and is going to take a ton of hard work and discipline, but that way I can see it closer than ever.
Also makes it much more fun to track my progress and keeps me from getting overwhelmed by the big numbers. That way I have a challenge with 10 levels. The first ones are easier and the last ones are harder. As a big fan of video games I like that resemblence and keeps me motivated to win the game.
Now the beauty of everything is that when the numbers get bigger the game doesn’t get that much harder because we have the power of coumpounding on our side.
If you put your money to work and get let’s say an 8% return per year that means that you are going to double your money in 9 years. That is from the returns alone without taking into account any additional contributions and dividend reinvestments and so on.
This is going to be a big ace up your sleeve in the latest levels of the game. That is why I am trying to reach the last levels as soon as possible. You can notice that when you reach level 7 or £128,000 you only need 3 doubles to reach that million.
And yes as the levels grow they become harder, but so does your income along the way. For example my income in the last 3 years has quadrupled and generally the more skilled you get the more money you start earning.
Also if you are investing in dividend growth stocks that means that the income you get from dividends starts compounding aswell. And when you put everything together you get one big snowball effect from all of your different incomes and returns.
The bigger the numbers get the more money you start making and the more money your money starts making. That is the beauty of letting your money work for you.
Okay so now you know what it takes to go from £1,000 to a million . Now let’s think what you need to get there.
1. Discipline
This is not going to be a sprint, but a marathon, which is going to take years so if you want to reach to that level 10 you need to get some discipline with you. As you go up the levels you are going to have more lust along the way. The more money you have the more things you can spend them on.
Imagine the kind of car you can get for £100,000 or the kind of home you can get for £500,000. But if you do it that stops you from the game and brings you back to level 1. For some people that is ok of course as people are different, but if you are chasing financial freedom as I am this is going to set you too far back. That is why you need to have that discipline and keep your eyes on the final level.
2. Patience
As I said this is going to take a long time and you cannot give up in the middle of it. There are of course going to be ups and downs along the way, but if you lose that patience you are going to lose your prize.
If you need some proof you can take a look at every single wealthy person in the world. All of them take years and years, until they finally see the reward of their work.
3. Power of will
Without a strong willpower it is just impossible to reach that final level. You need that to be able to contribute to your assets every month and keep them growing. Without willpower your money is going to go to everything else, but assets.
There are a ton more satisfying things to do in the short term than investing, but in the long run there is nothing more rewarding than securing your future and living a life of financial freedom.
4. Skills
If you want to accumulate wealth you need some way to make money. This can be a job or a business. But in any case you need to have some skills that provide value to other people. Generally the better you are at a given thing the more money you will be able to make.
So here is my advice to you- use your free time and get better at your area of expertise. If you don’t like that area- use your time to learn something else and move into another area. Today we have all kinds of information at our fingertips. I know it sounds like a cliche, but you really can do everything that you want.
If you want to be a programmer- go online and learn how to be one. If you want to be a photographer- go online and learn how. You get the point.
The same goes for improving your current skills. If you want to become better in your field- just go online and learn more about it. There is all kinds kinds of information online about all kinds of things. If you trully want to learn something, you can do that.
My point? The better you become at your field, the more money you can make. The more moeny you can make, the more you can invest and the faster you can get to your end goal.
Summary
That is my point of view on how to become a millionaire, even if you have nothing as of right now. All it takes is 10 steps and a lot of dedication and everyone can do it as long as he really wants to.
Hope you enjoyed reading and hope you got a new approach on how much closer one million really is.
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