When people hear the word millionaire, they often tend to picture an entrepreneur with a single idea or invention that makes them a fortune 👩💻 Sometimes it goes like that. But there is more than one way to make a million!
A far less well-known stereotype, is of that of the millionaire who quietly accumulates their fortune through a prudent, long-term financial strategy. Whilst this isn't so appealing for many media portrayals of a millionaire, this approach is certainly more realistic and attainable (especially for those lucky ones who are still in their twenties) 🤙
So though we can't guarantee that the below list will see you make your first million, it will certainly put you on the right track:
1. Create a Purpose and a Plan
This is all about switching up your dreams for goals. If you are chasing a million, then your eyes will need to stay firmly fixed on that prize 🏆 Job one is to create a financial picture of your income versus expenditure. This will identify any disparity, and broadly ensure that you get the most out of your money... however much of it you have! Just remember to also forecast any annual or one-off payments 📅
2. Don't Use Credit
This is something that millionaires tend to universally agree on. Live below your means! Credit itself isn't the root of all evil, but interest payments or late fees certainly are 😈 Of course, there may be times when it is unavoidable to rely on loans etc., but this should be for a specific purpose and finite period. The takeout here is to make your money work... rather than financing an unsustainable lifestyle 💍
3. Save & Invest for Your Future
This step is all about putting that money to work 🔧 This could include a workplace pension, an ISA, or other investments in stocks or bonds. Whatever route you decide to take... START EARLY! Unless you have a game-changing idea in your head, then compounding (the process by which any returns are reinvested) is probably going to be your best chance of getting to the million pound mark 💰
4. Self Discipline
We've talked about the theory of financial planning, but that's no use unless it's backed with practice 🤔 You need the resolve to stick to your financial plan and regularly contribute to your savings and investments (automation is a good way to do this without thinking about it). If you feel that self discipline could be a problem, then thankfully there are a host of financial tools that can help ⚙️
5. Know More
At some point on your journey, the hard fact may well emerge that you're going to need more money. Simple as that! 💷 A common way to do this (assuming you're not already sitting on a million pound idea?!) is to build your knowledge and/or skills. There is no single right answer here, but a useful starting point may be to think whether you see yourself more as a specialist or generalist.
6. Create Extra Income Streams
Ah yes, the 'side hustle'. What finance blog post would be complete without that old chestnut 🌰 Whilst budgeting and planning are essential exercises, being smart with money will only get you so far. You're going to need some serious money making ideas if you're equally serious about that million! So let your creative imagination run free. Creativity is a skill that can be learned and harnessed like any other 📝
7. Change Your Social / Professional Circles
For the purposes of clarity... we're not suggesting that you ditch all your 'pre-millionaire' friends. And we definitely believe in the "you do you" ethos! But it's also good practice to position yourself around other people who you aspire to be like 👨👩👧👦 The people we listen to will affect the person we become, so make sure you surround yourself with people who's traits and habits reflect how you wish to see yourself 👀
You've probably heard the sentiment that two heads are better than one? Well, when it comes to stacking your cash, this has never been more relevant! Believe us when we say that harmonious teamwork can be your greatest asset 🤝 This isn't about leaching from others, but having the initiative to proactively recognise your weaknesses, and seek collaborations with others who have strengths you don't 👨❤️👨
9. Look After Your Health
This may sound obvious, but most of us will likely have experienced periods when we've become so caught up in chasing a goal, that we sacrifice our own health or wellbeing in order to achieve it 🏃♀️ And that very rarely ends well! In addition to ensuring your body is properly rested and fuelled, remember to include space in your schedule to promote a positive mental attitude and refresh your enthusiasm 🌱
10. Fail... and Learn
Yep, you read that right. And this step is definitely not optional. The only way you can push yourself to the limits of what you can achieve... is to find and cross the line that separates success from failure 🤦♂️ So make mistakes. Learn from the failures, and learn to also enjoy the process. Failure is only temporary, but the lessons you learn could last a lifetime, and potentially make you a millionaire in the process! 👍
So there we have it: Plum's complete guide to becoming a millionaire. Whether you're chasing a bank balance that resembles binary code, or perhaps a somewhat more modest goal, Plum's automatic savings and investment tools can help with that!
If you'd like to learn more about Plum then you can check out our website.