When we think of millionaires, images of lavish lifestyles and inherited wealth often come to mind. However, not all millionaires are born with a silver spoon. A Wealth-X study found that 68% of those with $30 million+ are self-made. In this article, we’ll explore the secrets of self-made millionaires and offer practical advice to jumpstart your own financial success story.
Dream Big, Take Action
Richard Branson, the co-founder of Virgin Group, once famously said, “If your dreams don’t scare you, they are too small.” Financial success isn’t about luck – it’s about setting ambitious goals and taking action. Self-made millionaires are all about action. They don’t just dream big; they chase those dreams with ambitious goals. Whether starting a business or conquering a personal challenge, they take concrete steps to turn ideas into reality. This relentless drive is a crucial factor separating those who inherit wealth from those who build it themselves.
Start Investing Early
Self-made millionaires swear by the magic of early action. It’s not about being a child genius like Warren Buffett, who started investing at 11. The key is to begin. The earlier you invest, the more time your money has to snowball through compound interest. Warren Buffett said in a 2016 interview, “My life has been a product of compound interest.” Put in the time and effort, and watch your financial future flourish over the long term.
Persistence Is Key
Overnight success is a myth. Self-made millionaires know the road to success is filled with challenges, doubts, and even setbacks. What separates the successful is their unwavering commitment to their goals. Elon Musk’s journey with Tesla and SpaceX wasn’t without near-bankruptcies and technical hurdles. Yet, as Musk himself said, “Persistence is very important. You should not give up unless you are forced to give up.” His relentless persistence kept him pushing forward. He embraced the messy reality of innovation – learning, failing, and improving along the way.
Stay Out Of Debt
Self-made millionaires view debt as the enemy of wealth. “Debt is not a tool; it is a method to make banks wealthy, not you. The borrower truly is a slave to the lender,” financial guru Dave Ramsey explains. Millionaires understand that high-interest debt, such as credit card debt, can ruin their potential savings. Self-made millionaires prioritize paying off existing debt quickly. They use credit cards responsibly, only spending what can be paid off monthly. They build a healthy safety net with an emergency fund to avoid debt during emergencies.
Value Time
Millionaires know time is their most valuable asset. They prioritize tasks efficiently, delegate when necessary, and avoid unnecessary time drains. For instance, Indra Nooyi, PepsiCo’s ex-CEO, maximized her time with ruthless prioritization. She focused on just three key initiatives a year and efficient meetings with clear agendas, ensuring every minute fueled PepsiCo’s growth.
Embrace The Growth Mindset
Self-made millionaires go beyond just chasing money. They believe in constant growth. This growth mindset sees challenges as opportunities to learn, effort as the key to improvement, and learning as a lifelong adventure. Warren Buffett exemplifies this mindset. As businessman and investor Charlie Munger wisely said, “Warren Buffett has become one hell of a lot better investor since the day I met him, and so have I. If we had been frozen at any given stage, with the knowledge we had, the record would have been much worse than it is. So the game is to keep learning, and I don’t think people who don’t like the learning process are going to keep learning.”
Have Multiple Income Streams
“Never depend on a single stream of income. Make an investment to create a second source,” Warren Buffett wisely said. Self-made millionaires are masters of diversification. They don’t rely on only one source of income. Their wealth comes from salaries, investments, rental properties, and side businesses. This creates a safety net – if one income stream dips, others keep them afloat. The key is to build passive income, like rental income or investments, that brings in money with less ongoing effort.
Embrace Budgeting
Before becoming wealthy, many millionaires develop a habit of limiting spending. They track every penny, not to feel restricted, but to be financially aware. This lets them cut unnecessary expenses and identify areas to save. They often use zero-based budgets, where every dollar has a purpose – savings, bills, or planned spending. This strategy prevents overspending and keeps them on track to reach their financial goals. In a study of millionaires conducted for his new book Everyday Millionaires, money guru Chris Hogan shared that 93% of millionaires admitted to sticking to the budgets they make.
Learn From Your Failures
Successful people don’t fear failure – they learn from it. They think of setbacks not as roadblocks but as stepping stones. Richard Branson’s path to success was paved with missteps like Virgin Cola. But each failure taught him valuable lessons, building his resilience and turning him into the founder of the Virgin Group. “Do not be embarrassed by your failures; learn from them and start again,” believes Branson.
Build Strong Networks
Millionaires know success is rarely a one-person show. They build strong networks, fostering relationships that open doors, offer valuable insights, and create a supportive environment. Sara Blakely, the Spanx founder, built her network unconventionally. Instead of chasing CEOs, she cultivated a “Spanx Sisterhood” of everyday women who provided feedback, became brand advocates, and offered peer mentorship, fueling her billion-dollar shapewear empire.
Take Calculated Risks
Millionaires are not afraid to step outside their comfort zone but are not reckless. They take calculated risks, meticulously weighing potential rewards and drawbacks before making a move. Jeff Bezos, the founder of Amazon, transitioned from a successful Wall Street career to taking a calculated risk by launching an online bookstore. Despite the uncertainty of the internet landscape, Bezos’s thorough research and strategic planning led to Amazon’s remarkable. In his 2016 shareholder letter, he wrote, “Given a 10 percent chance of a 100 times payoff, you should take that bet every time.” So, research, plan, and then take that calculated leap toward your financial goals.
Find A Mentor
Finding a mentor is a game-changer on the path to success. Self-made millionaires recognize that they can’t achieve success in isolation. They seek mentors who provide guidance, share experiences and offer strategic insights. With a mentor by your side, you can sidestep expensive blunders, gain knowledge faster, and unlock exciting possibilities. Take Richard Branson, for example. His success story is intertwined with the mentorship of Sir Freddie Laker, who played a crucial role in helping Branson’s airline take flight. Branson himself recognizes the immense value of mentorship on his path to entrepreneurial success.
Stay Fit
Millionaires prioritize healthy habits to avoid costly medical issues down the line. Think of it as an investment – taking care of yourself now saves money in the long run. They eat a healthy diet, exercise, and prioritize quality sleep to manage stress. They’re investing in a brighter financial future by investing in their health. Oprah, the billionaire media mogul, prioritizes a holistic approach to wellness, balancing mindful eating and exercise with stress-reducing practices like meditation and yoga for optimal health. This focus on well-being has helped fuel her success.