There’s no secret sauce to becoming rich or maybe there is, and let me explain why below. Do you want to be rich? If the answer is yes, you may want to pay extreme attention as I’ll outline all the steps to getting the illusive first million. I’ve read many times in hundreds of websites, that in order to be rich you have to do these 3 things:
Pay yourself First
Spend Less than you Earn
Have and Maintain a High Income
While yes these three factors do matter to the average person who dreams of swimming in the dough like Scrooge Mc Duck, I will tell you becoming rich takes a deeper process and an involved plan. Many people seem to have the mentality that becoming rich is all about luck and or hitting some magical monetary jack pot.
I hate to burst anyone’s life bubble, but I will tell you right now, becoming rich the majority of the time happens by having a master financial system in place. Imagine a world where people actually knew this system and had the guts to implement it. Instead of saying oh well let me play the lottery this week and cross my fingers.
At least once a week I hear numerous coworkers talk about maybe hitting the lotto, and while this post is not about that, I will repeat again luck has very little to do with how the average millionaire became rich. Now let’s get back in lane to discuss said master plan on how to become rich.
Do you want to Be Rich?
Step 1: Manage Time to the Tee – Those that can learn to do this at an early age, have an advantage.
Step 2: From the very first job, invest automatically and consistently. Forget about the imaginary what ifs- take action then adjust later.
Step 3: Create as much Value as possible, or Produce Something with the time saved or managed.
Step 4: Avoid Distractions and tasks that don’t provide value to the written goals you have in place.
I feel the steps above have just as much weight and support to the question; do you want to be rich, as the three financial tips in the beginning of the post. Because it fixes a lacking mindset people may have and makes any person exponentially efficient.
By learning how to manage time it will open the door to finding many opportunities that will increase income over a lifetime. If you watch 20 hours of Netflix every week for life, that person will miss out on wealth building time. This also goes hand in hand with avoiding distractions, as we are constantly bombarded with ads and other distractors.
In contrast if you become rich before you’ve mastered how to understand your financial mindset, confidence in managing money and realizing what is effective time management opportunities.
There is a high probability you will blow through it.
Once you follow through on all of these tips I have a feeling the first million will come into your life in no time at all. After the first million I predict a second and third million as statistics show can appear so much faster in your financial accounts.
Related Article:
Comment on do you want to be rich?
What steps do you feel is providing the best opportunity to be rich?
The first million is always the hardest, but without investing you will not reach any million. – Rich Uncle EL
Rich Uncle EL
Does being frugal matter when you’re rich? To a degree, check back next week to read a post on frugality and the millionaire next door.
Pic is courtesy of Moneywatch101.com
My keys are to stay out of debt, don't spend more then what you make and invest the rest. You would be surprised at how good investments and compound interest will work in your favor.
My recent post Recent Dividend Stock Purchase Emerson Electric
I couldn’t agree more with you financial forager. Taking life one step at a time, while always having a long term mentality is the way to go towards becoming rich. I cant stress enough how vital is it to start early on life investing at least 20% of income, and increase little by little every year. Thanks for stopping by.
I don't really care if I'm rich. I just want to be comfortable enough to contribute a lot of retirement (I'll have a SEP soon to help make up for lost time), take a couple of vacations a year without sweating it and be able to buy the very occasional big-ticket item without it breaking me.
We'll soon start saving for a down payment for a rental property, which will help us attain that goal. I have no idea how long it'll take, but we're not in any real hurry.
My recent post You heard it here first: My mom’s selling herself!
Well that’s great and I was referring to rich as reaching the first million, which is the standard every one attempts to reach first. It takes great effort to find enough margin in the budget to effectively save for multiple goals, you always get the best results when you focus intensely on 1 and then move forward from their. Good luck.
I try to follow those rules you outlined. Lately, with my living situation, life a tad chaotic. Who knows if it will ever get back to the way it was. However, those rules will ultimately lead to future success. Good article.
Keep cranking,
Robert the DividendDreamer
I think its best to take advantage of investing and completing goals when times are good financially. If you are in a tough situation it is smart to stay on course and look for those options to increase income or decrease expenses to stay afloat. If you keep plugging with investing in dividend stocks you will see success soon enough. Thanks for the comment.
I don't care about being rich but I do want to be in a place where I don't have to worry about money. I'm afraid for me, though, it'll take a couple million to get there.
My recent post How Much I Spent For A Weekend in NYC
I know most people who are frugal don’t care about being rich, but once you reach the 500k to a million net worth, you are considered rich. It might not be enough to retire on, but you will be in the elusive 20% club of wealthy in America. Good luck and thanks for the comment.
I think that's a good point and a point that a lot of people can relate too. Financial flexibility is a great goal, which many times corresponds with being rich, but doesn't necessarily have to.
The flexibility to have money to cover emergencies, go on vacation, and ultimately live the life you want is incredibly valuable.
It takes hard work and planning to get there, but I think ultimately wanting to be "rich" is the desire to have flexibility.
Intriguing post Money Watch, looks like there has been a lot of good discussion about it!
Being debt free has helped me the most. It isn't easy. Years of debt is difficult to overcome. The first $100K was the hardest. I think the second will be much easier.
I think being on a budget is a better way to say it than being frugal. Granted, my budget is pretty thin. It allows me to meet my goal of buying a home and buying bacon. -MBG
Congrats in being debt free, not many people can say that line. Also I agree once you can build the first 100k, it should stream roll faster from there. Good luck money bacon guy.