How to Become Rich
We have all, at one time or another, dreamt of being rich and having wealth beyond our comprehension. We’ve admired the founders of Silicon Valley and the Hollywood blockbusters depicting the lavish lifestyles of millionaires. We’ve imagined winning the lottery and retiring on some remote island or traversing the globe on an endless adventure. Becoming rich seems like it is within all of our grasp, but how do we become rich?
Being and/or becoming rich has been around as long as we have attributed value to money and the accumulation of it or things like it. A lot has been written on the topic over the years yet there seems to be a few things that have stood the test of time and can help you become rich, if you follow them!
How can I be a millionaire?
Being rich is more than just having money. It is a state of mind and in a sense, you could be exceedingly rich, but still poor financially and vice versa. Most people define being rich as having substantial financial worth, or in other words, being a millionaire.
There is a psychology to being rich – it is the achievement of being able to live without financial woes. We can all be rich, as long as we are able to do what we desire freely and have fulfilment in life. The key to being rich, is to live with or even less than what you have. That is a profound statement as we live in a society of greed and instant gratification.
If you want to become exceedingly rich, then it’s time for you to make bold decisions. Becoming rich is an ambitious goal and if you’re aiming for that, do something big, and effect some great changes in your life.
How do you become a millionaire overnight?
Short of winning the lottery it really isn’t actually possible to become a millionaire overnight. Sorry to burst your bubble! But this is simply the way things are. The accumulation of wealth is not something that is done quickly, but through the systematic process of following certain habits.
Wealth can come to some relatively faster, say a couple years, but most millionaires went through years of hard work and struggle before actually becoming rich. The following list of habits are things people do that make them rich.
I have listed 5 things the rich do to become rich:
1. They reinvest into themselves, their businesses, and other assets to generate cash flow
Set a goal to ensure you are best at what you do. Be passionate about what you do and by working hard, become the expert. Millionaires fully utilize their skills – so if you’re good at something, work on reaping considerable benefits out of it.
You need to figure out what drives you and what skill it is you want to cultivate. For example, if you’re a writer, you may consult the New York Times Bestseller list and highlight the ten most successful authors you admire. Learn more about these writers and how they attained their success. Read their work – invest time and energy in improving your own writing style.
Further to this point, the rich invest money they have already paid taxes on into a variety of vehicles, some of which let their money grow tax-free and also allow for tax-free withdrawals in the future. How? They use a great tool called the Roth IRA. The Roth IRA is, in my opinion, one of the greatest ways to build wealth that is available to all of us regardless of financial status.
As long as you follow the specific rules for funding a Roth IRA it can be invested in all manner of investments like stocks & bonds to REITS and private equity. The Roth IRA is a tax-advantaged way to invest for the future which could even be turned into tax-free passive income at some point down the road. You can learn more about the Roth IRA by downloading my free eBook on it here.
2. They take calculated risks
It’s simple – to be successful, you must take risks! Successful people take risks that would make most other people run in the opposite direction.
Let me clarify the risk I’m referring to – It’s called calculated risk. Which is unlike risks a gambler would take. A calculated risk is a risk that requires considerate scrutiny and a study of the variables of any initiative you might consider taking. By taking a calculated risk, you prepare for all possibilities and identifying possible failures. Taking calculated risks requires a lot of work and thought! By putting the work in, chances are you won’t be caught unawares.
Just as successful people take calculated risks, the same applies to unsuccessful people taking uncalculated risks. An example of an uncalculated risk is gambling - it’s a lazy man’s risk and requires no thought, no scrutiny and very little investment time.
It turns out most wealthy people are business owners who started their own businesses and became successful due to their ability to be self-educators who learnt most of what they know from the university of hard knocks. Many, many wealthy people admit to failing in either life or business. The difference is, these people get up and believe in themselves to keep on trying, their failure was only temporary in their mind. They learned from it and moved on.
We can clearly deduce that successful people are not afraid to take risks, invest time, money and thought into pursuing their passions.
3. They invest in themselves
How then do the wealthy such as Steve Jobs, Elon Musk and Richard Branson attain their wealth? Well – it seems they’re disciplined and a lot more likely to turn to books. These people know what their time is worth so surfing the net for endless hours just isn’t going to cut it.
Imagine your time is worth $350 an hour – now ask yourself, what is worth $350? Would it be watching TV or surfing the net? Probably not. How about reading, learning or studying – You can bet your bottom dollar the answer is a resounding yes. Why though? Because when you pick up a book, you upgrade your knowledge. This is an investment of a lifetime.
4. They define what they want, when they want it, and how they will get it
The fundamentals of being human is that we have flaws and nobody, despite the media hype is perfect. Our main flaws are easy to break down into 2 categories, namely – Taking Action or Procrastinating.
It is procrastination that prevents the most gifted people from attaining success in their lives. Most of us have this poor habit and it is through this poor habit that most people struggle financially in life. Why then do we procrastinate? Because we are not fully immersed in our passion about what we do for a living. We only feel comfortable doing things that are easy and put off doing things we don’t like due to fear.
Successful people take positive actions to pursue their dreams and goals and by taking action, are propelled forward in life. Remember, these actions create a ripple effect which produces feedback. This feedback is critical to us understanding whether or not we’re on the right or wrong path. By taking action, we create a sense of happiness and thus reduce stress in our lives.
It is easier to be and remain proactive by taking positive actions as opposed to handling everything reactively due to procrastinating. Our brains are remarkable organs and have the ability to remind us that we have uncompleted tasks. Our subconscious keeps reminding us through stress, which is an advanced warning system that we have an uncompleted task to attend to.
By using these 5 tools, you can learn to take positive action and quell the silent voice of procrastination:
- To-do Lists
Most successful people rely on “to-do” lists to help them get things done and there are two types of daily to-dos.
Goals: These are daily tasks tied to monthly, yearly and long-terms goals. These are mostly fixed goals in that the to-dos show up daily on the to-do list.
Non-Goals: These are tasks unrelated to any goals such as admin tasks. They may be daily tasks and vary slightly.
- The Daily Five
Successful people list five things to achieve on a daily basis, before the day ends. These five things may be unrelated to the regular nine to five job, but they are important enough to propel you forward to accomplish a goal.
- Set Deadlines
By setting deadlines and communicating these to third parties who are affected by the completion of tasks, we increase the urgency to complete the task. Deadlines create pressure on us to fulfil our promises and meet our deadlines.
- Accountability Partners
Why would we have an accountability partner? Because this is someone with whom we can meet regularly to holds us accountable for achieving our tasks. Knowing that someone is watching us, gives us a sense of being able to perform better. A good example of accountability partners is a Master Mind group.
Write down what you are grateful for now but also list the things you would want and need in the future to reach the ideal life of being rich. Be specific. What house, car, income, family life, etc. do you want? Write them down as you already have them. Your mind will see these and work towards them, 24/7.
5. Rich people surround themselves with people that are smarter than them
If you want to attain success, walk in the footsteps of the wealthy and the way to achieve this is to find a mentor. Having a mentor who actively participates in our success and teaches us what to do is sharing their valuable life lessons amassed either from their own mentors or from the good old school of hard knocks!
Seriously, by finding a success mentor, it is one of the least painful ways to attain that financial freedom and wealth so desired.
Where do we find success mentors?
- Parents: Our parents can be a great source of mentoring as they have knowledge and experience on their side. Parents should start being success mentors to their children from a young age and teach their children how to foster successful habits.
- Teachers: Teachers can be wonderful mentors to us all. Think back to your own school or university days. Surely you resonated with a teacher who was able to reinforce certain lessons?
- Managers: For those who weren’t as fortunate to have parents or teachers as mentors, find someone at work who you admire and trust and ask them to be your mentor. Ensure this person is at least two levels above you so that you do actually learn something valuable.
- Reading: Self-help books such as those authored by Dale Carnegie or Jack Canfield can replace real-life success mentors. You only need to browse the business section and/or self-help section of your local book store to find a book that will resonate with you.
Can you become a millionaire in 5 years?
Whether it is 5 years, 2 years, or 10+ years, it is possible to become rich. The formula to becoming a millionaire is simple, but the road is not easy. You must be disciplined, and you will most likely need to change some of your “poor” habits into rich ones.
A good place to start which I learned is to assess your current habits, all of them. Then identify which ones are “poor” habits and figure out how to replace them with “rich” habits. The exercise is a fun one as well as eye opening. Instead of creating some New Year’s Resolutions why not assess your current habits and remove the ones that are making you poor? Seems like a much better place to start!
The road to riches starts with passion and desire around specific dreams in which you have written down specific goals to realize them. Unless you have the winning lottery ticket I encourage you to embark on this journey of wealth, the sooner you start the sooner you too can be rich.
Thank you for reading!