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How to Become a Millionaire: Rules and Tips

Updated on April 28, 2011

How to Become a Millionaire

Are you dreaming of becoming a millionaire? To make your dream come true you should follow certain rules that are extremely important. Here is a step-by-step guide from starting up to standing out. First you learn to generate steady income from your business or job and then you learn to create wealth for the long term from that income!

Rule 1: Decide what business you should do

If you decide to be in business, you must be in such a business that suits you. None can be successful in every sphere of life. Choose a business that requires the skills you have. If you are a good teacher with good communication skills you should select any business related to the education industry, and not any business related to the real estate sector. Same rule applies if you are in jobs. So don’t make that mistake at the very beginning, otherwise your dream will remain a dream forever.

Rule 2: Set up small goals and work for it diligently

After deciding your type of business you have to work at it diligently and be perfect in it. Work out a plan for it and commit yourself to it. Set up small goals and work hard to achieve it. Don’t forget to evaluate your performance once in every quarter of the year. If you are in job it might be a bit difficult becoming a millionaire. For that you have to be very much disciplined in money matters. There are so many people out there who are successful as CEOs of companies, or in other key posts who are very rich! So don’t worry, make a habit to save regularly and live a frugal life. Remember saving is the key to become a millionaire especially if you are in job.

Rule 3: Keep yourself updated

For being a millionaire you must be very skillful in your business or job. Therefore you will have to cultivate the habit keeping yourself updated always. Read newspapers or business magazines regularly to keep yourself updated regarding your business and regarding latest business trends so that you can incorporate new ideas in your business promptly. If you made some serious mistakes in the past, let them be your teachers, helping you never to repeat those past mistakes. Remember, most of the rich people are risk-loving and action-oriented. Read success stories of other millionaires in your field. Be a part of the online community of your niche and read the postings regularly.

Rule 4: Appreciate and reward yourself

You should love your work and do not forget to appreciate and reward yourself if you are successful to accomplish the goal you set up for yourself. Give yourself reward in the form of having a vacation with your friends or relatives or anything like that, ok, you know that better! This will motivate you in your job and inspire you to go ahead. After reaching the goal your first job is to set up the next goal. Try to accomplish your ultimate goal of becoming a millionaire by this step-by-step process. But don’t be over-confident for being successful, that will destroy you by depriving you from the opportunity to learn from your surroundings or from the people around you.

Rule 5: Respect your hard-earned money

Rich persons know to respect money. You too have to learn how to keep your hard-earned money safe by not spending it unwisely. That does not mean you will hoard the money for unproductive purposes. Apart from spending it for the growth of your business and for savings and investment purposes, you should also spend it for your community or for others who need money. In this way you will be able to help others in life and that will have a positive impact on your own life. Your money will grow and you will continue to mature as a social worker!

Here are some tips to learn how to manage your hard-earned money so that you can join the millionaire club quickly and efficiently.

Tip 1: Prepare and follow a budget

Making a budget is the first and foremost requirement to become a millionaire. It gives you an understanding of your expenses allowing you to decide what to avoid and what not. Spend your money in proper proportion in investments and for luxuries. Avoid luxuries in the initial stages of your financial success. Even if you wish to buy some luxuries consider buying a luxury home rather than a luxury car. Remember real estate is an asset class which generally appreciates in value over time but car is an asset which depreciates in value over time.

Tip 2: Save wisely

The grave mistake people generally make is that they think of saving as something which can be done in the latter part of life, after spending for the luxuries of life. But this can never be true; your hard work and the strains you went through in your life must bear their fruits for the rest of your life and probably beyond. Therefore invest wisely by being frugal, by staying away from unnecessary expenses like eating out often and acquiring the most expensive homes or vehicles of the time. Wait a little, save a little and you will never regret the waiting. Learn the trends of the market. Invest in secure avenues like tax liens which are comparatively safe and offer an interest rate of ten to twelve per cent a year apart from saving in bank account and fixes deposits.

Tip 3: Invest in bonds and assets

A lot of money you earn goes to the government exchequer in the form of taxes. This can be prevented by buying tax saving products like government bonds or life insurance. Of course much of it varies from country to country according to that particular country’s tax laws. Money, in the form of cash flows away without even being noticed. Make a habit to acquire assets in the form of real estate or precious metals like gold or silver by consulting your financial advisor. This will leave you with no other option, but to stay away from spending on mere impulses.

Tip 4: Invest in stocks

Now that you have saved some money in your bank account or fixed deposits, it’s time to divert some of those money in more risky asset like stocks. Yes, money in a savings account is safe, but that safe money is likely to be substantially eroded by inflation, a risk that almost guarantees you will fail to reach your wealth goals. And yes, money in the stock market is very risky over the short-term, but, if well-diversified, should provide remarkable growth with a high degree of consistency over the long term.

Tip 5: Optimize asset allocation

The most critical decision you face is arriving at the proper allocation of assets in your investment portfolio - stocks for growth of capital and growth of income, bonds for conservation of capital and current income. Once you get your balance right, and then just hold tight, no matter how high a greedy stock market flies, nor how low a frightened market plunges. Change the allocation only as your investment profile changes. Begin by considering a 50/50 stock/bond-cash balance, then raise the stock allocation if:

  • You have many years remaining to accumulate wealth.
  • The amount of capital you have at stake is modest.
  • You don't have much need for current income from your investments.
  • You have the courage to ride out the stock market booms and busts with reasonable equanimity.

As these factors are reversed, reduce the 50 per cent stock allocation accordingly.


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    • Hypnotherapy-Guru profile image

      Hypnotherapy-Guru 6 years ago from Idaho

      Wonderful tips! Thanks.

    • andycool profile image

      andycool 6 years ago from the U.S.

      Thanks Hypnotherapy-Guru for stopping by to read the hub and leaving a comment!

    • Cogerson profile image

      Cogerson 6 years ago from Virginia

      Solid tips and advice. All it takes is one solid good idea....I am still searching for that idea as I continue to work on that first million..voted up

    • andycool profile image

      andycool 6 years ago from the U.S.

      Thanks Cogerson for stopping by. I appreciate your supportive feedback. Yes an idea can change your life... hope you will get it soon!

      Love & Peace - Andy

    • Ashantina profile image

      Ashantina 6 years ago

      I like this!! This is what I'm working towards.. Great hub!

    • andycool profile image

      andycool 6 years ago from the U.S.

      Thanks Ashantina for your encouraging comment, I really appreciate it! Wish you good luck, cheers!

    • Dusty Snoke profile image

      Dusty Snoke 6 years ago from Chattanooga, TN

      Really good advice. Thanks for sharing.

    • andycool profile image

      andycool 6 years ago from the U.S.

      Thanks Dusty Snoke for your inspiring comment! Have a good day! - Andy

    • angie ashbourne profile image

      angie ashbourne 5 years ago

      Hi! andycool Really good advice, great hub. Angie

    • andycool profile image

      andycool 5 years ago from the U.S.

      Thanks angie ashbourne for stopping by! - Andy

    • kenneth avery profile image

      Kenneth Avery 5 years ago from Hamilton, Alabama

      andycool...great hub. Voted up and away. It was that good. Keep up the great work and I will visit more often in the future. My health isnt that well. And I have been busy working on things that needed my attention. I DO value you as a follower and friend. Thanks, and have a Merry Christmas.

    • andycool profile image

      andycool 5 years ago from the U.S.

      Thank you Kenneth Avery for your visit! I really appreciate your comment my friend. Merry Christmas to you too! - Andy

    • kenneth avery profile image

      Kenneth Avery 5 years ago from Hamilton, Alabama

      My pleasure, Andy. Anyone with any judgement can see by your logo that Creativity runs in your blood. And I will try to visit more often as my health improves. I love your practical hubs. What a talent you are. Take it EZ!

    • andycool profile image

      andycool 5 years ago from the U.S.

      Thanks Kenneth for your kind words! Get well soon. God bless you! - Andy

    • Millionaire Tips profile image

      Shasta Matova 4 years ago from USA

      These are great ideas about how to acquire and save your money. Voted up.

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