Friday, January 12, 2007

Becoming a Millionaire

I've just finished reading an interesting post by StevePavlina on 5wealth lessons from a 20% Millionaire. The article was thought provoking and meshed with a lot of my thoughts on becoming a millionaire. The only disagreement that I have is that Steve doesn't mention a time frame in his article. In truth it is not that hard to become a millionaire by savings alone. Even though I started late, just by funding my 401k at 6% until I am 65 will make me more than a millionaire from that one source alone. Someone with self-discipline who starts saving in a 401k or Roth IRA should exceed the millionaire status a couple of times over before they are ready to retire. Just put the money into an index fund, forget it's there and the power of compounding will make you rich.

But if you want to become a millionaire in a short time frame most of what Steve says is right on the money (pun intended).

"If you take this goal seriously, you’ll realize you must make a
massive commitment to have a real chance of getting there. "

I wrote about commitment here. Even savings takes a long term commitment, but it is generally painless once you set it up. But achieving your goal in a short time frame takes a level of commitment that forces you to prioritize your life, give up many short term pleasures, lose some sleep and work much harder than your co-workers and neighbors and give up TV. I've lost 15 lbs. since I started working my real estate venture last month.

"People who say they want to become a millionaire but are
unwilling to back it up with hard work are only fooling themselves. It’s
not going to happen by itself. If hard work is a dirty word to
you, don’t bother."

Steve also writes about the mental attitude shift it takes. He talks about carrying more money in his wallet so that he feels richer. I wrote about prosperity consciousness here and here and here. In one of the posts I derided the "coupon clipper" mentality which I think is what Steve is really talking about.

In his last point Steve warns against listening to naysayers:

"A financial troll is a close cousin to the forum troll, except that
financial trolls strive to sabotage your financial pursuits. These trolls
can be internal or external. They’re the people who make comments
like, “Wealthy people are so greedy. They only care about themselves and
will take advantage of anyone to make money.” Financial trolls
are also the internal voices that say, “If you make too much money,
people will judge you harshly for it. They’ll assume that’s all you
care about.”"

One gentleman wrote a scathing comment about my coupon clipper statement to me in which he stated:

"It seems that you and a good majority of the world measure success by monetary value. Those that die with the most toys win. "

I simply laughed at his comment. In my years in Amway I heard every imaginable negative comment about making money and becoming wealthy. In fact, from this standpoint, I think that Network Marketing is the toughest businesses mentally to endure due to one on one attacks from financial trolls. If you talk to 100 people about network marketing 99 will try to justify their unwillingness to work by dissing your dreams or wealthy people in general. This is called "transference" in psychological terms and you just have to see it for what it really is - not an attack on you but a measure of that persons poverty consciousness, lack of confidence and poor self-image.

I've set a goal to acquire $1,000,000 in net worth in Real Estate alone within 5 years. This is in addition to my 401k or other streams of revenue that I might generate (like a blog).

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