Becoming a Millionaire – Can Anyone Achieve That?
"I’d love to be a millionaire", the princes sang in 1991, still appealing to many people with their super hit. A life without money worries. But how to become a millionaire?
From a mathematical point of view it sounds easy. Anyone who manages to double 1 USD daily is millionaire after 21 days.
Unfortunately it’s not that easy. Doubling one USD actually out of one's own resources turns out to be a demanding task.
Of course there are different methods of doing this but these are associated with certain risks and besides, during the time it takes to "become a millionaire" one has to cover one's own living expenses.
One thing, however, is a major obstacle to becoming a millionaire: pessimism. This is what most would-be millionaires suffer from.
They lack confidence in their own strength and who’s resigned himself in advance to the fact that a project will fail will hardly succeed to realize the first million.
But optimism alone is not enough. Several factors have to come together to achieve the goal. This article will show you what these are and how they can be combined to make a million.
Make a million within 10 days?
The lottery or roulette would be two ways to make a million and more within 10 days. The chances of this actually happening, however, are infinitesimally small. Actually the goal of getting from zero to one million within 10 days is simply impossible to achieve.
To begin with, a certain amount of investment is needed. A good idea on its own won’t make an impact – to sell even the best idea requires a start-up capital to protect this idea, like by a patent.
Just this requires approximately 1000 USD. So how to start?
Let's just assume that all the elements favorable for a future fortune are missing, like a family promising a high inheritance or studies at an expensive elite university with subsequent prospects for a position in top management.
There are opportunities in the IT area, such as a special software or a social media platform, but the ratio between those who attempt and those who make it, such as Marc Zuckerberg, is only a few per thousand.
And especially among IT millionaires one notes that well-heeled parents and a correspondingly expensive education were almost always a given.
It starts with saving!
As a rule, every adult U.S. resident has an income, however small. Usually this covers the monthly living expenses. The first step is to make a meticulous list of the monthly expenses. Quarterly or semi-annual bills have to be included!
Each budget consists of fixed and flexible items. The monthly rent, electricity and water are fixed costs, the amount of which changes only little from month to month.
On the other hand, flexible costs can be found, for example, in the case of current insurance premiums and money for clothing and food. Here you can save some USD, even if it might feel hard for a while. As a result, 25 or even 50 USD per month can be set aside as savings even with a very small income. It's not just about money – it’s about the experience of having saved a monthly surplus!
Ferdinand Piëch, one of the big players in automotive engineering, once put it this way: "Rich people get rich by spending less than they take in." Following this wisdom naturally makes life easier with increasing wealth. However, saving alone is not enough and in today's interest rate landscape the savings plans offered by banks are unlikely to help make millionaires.
How to become a self-made millionaire
But which path leads to the first million? When evaluating the lives of today's self-made millionaires, one can distinguish five different backgrounds responsible for the respective wealth.
1. About 1% of all big fortunes are founded on talent or luck. This category includes lottery millionaires and well-known artists such as singers or actors, as well as professional athletes. Hoping for a lottery win is much like waiting for water to flow up the mountain.
On the other hand, people with an extraordinary talent often have to work very hard for their position while knowing the right people to promote them. The artist's life is still often enough a bread-less art.
2. Around 5% of self-made millionaires also have a talent, namely that of the top seller. Qualifications hardly play a role in sales. To deal with the customer and ultimately sell the product to him or her is what matters. In some areas, margins, and thus commissions for sales are so high that freelance or salaried salespeople may become millionaires. For people with sales skills a way to become a millionaire without equity.
3. An outstanding education and specialization in a field of expertise can also pave the way to the first and further millions. Just over 10% of all self-made millionaires got where they are because they are absolute leaders in their profession. This group includes physicians who are luminaries in their field, or lawyers who find the best possible solutions for their clients in tax, criminal or commercial law. Such people receive highly paid employment contracts from law firms or clinics and often become millionaires within a few years.
4. Top performers are well paid in the economy because they are more than worth their cost. One gets there via a degree and a high degree of intelligence. The decisions top executives sometimes have to make are often so complex that they can have far-reaching consequences. The top managers, the so-called management elite, also constitutes about 10% of self-made millionaires. Big corporations know why they invest a lot of money in their executives and make them millionaires.
5. The largest number of millionaires who made it on their own resources can be found among the entrepreneurs. A whopping 74% of all fortunes generated practically out of nothing was created by people who started a business.
It's simply the best approach. An own company not only offers possibilities in all directions, the conditions for establishing a company are minimal as well, apart from special cases, such as in the craft sector.
Usually all it takes is a stroll to the town hall of the city or the community to register for business. However, there remains a considerable distance to cover on the way to becoming a millionaire.
What are the most successful industries for future entrepreneurs millionaires?
Now that it‘s obvious that the first million is most likely to be made with your own company, the question arising is:
How do I become a millionaire?
Here it‘s helpful to consult experts on this topic. The management consultancy Capgemini has already done so. The company, with 180,000 employees working in 40 countries around the world, produced a report on the development opportunities of various industries expected to see the largest increments in millionaires by 2025.
Here are the five industries most promising for aspiring millionaires:
Position 5 – Real estate and construction
In the construction industry and its affiliated segments, like real estate trading or also services, such as administration and maintenance, high growth rates can be expected in the U.S. metropolitan areas. There are good opportunities for newcomers, both with fresh ideas as well as with traditional sectors.
Position 4 – Manufacturing industry
Don‘t be shy! The term manufacturing industry includes both large factories as well as manufactures or one-man businesses. A self-produced product with a good USP has often been the path to the first million.
Consumer goods will continue to be in high demand in the coming years and the great advantage of this industry is that the expansion to other markets can be usually be handled easily.
Position 3 – Healthcare
The health sector will probably remain a growth market as long as there are human beings. More than 30% of surveyed experts gave entrepreneurs in this area the most chances to become millionaires.
One doesn’t have to complete a medical degree or pursue a medical profession. There are countless opportunities to become wealthy in the world of health services.
Position 2 – IT and software
That this industry is one of the front runners should be obvious to everyone even without the report by Capgemini. Actually many would rank this in the first place, but that’s already taken.
Computers, software and hardware are and will remain growth markets for the time being, especially with something new coming up almost daily, giving birth to more ideas in the periphery.
The human / machine interface is only just starting, and although microprocessors and smart circuits are already present in numerous items for private and professional use, there are still many ideas left that have not yet hatched.
Whether it's industrial robotic technology or a games app on the social media platform, the paths leading to a self-made million are well developed in this segment.
Position 1 – The financial industry
Despite the extensive banking crisis in the past and prevalent skepticism about the financial industry, almost 36% of all experts predict most new millionaires here.
Admittedly, there are certain hurdles in the financial industry, and also in the U.S. financial rules have been tightened in recent years.
Nevertheless, there are various financial products that enable entry into high finance even without a banking license or stock exchange listing.
Making a million the easy way?
How do I become a millionaire? Where luck doesn’t lend a hand one has to do it oneself. There is no really easy way to the first million. It takes perseverance, the courage to take risks and certainly a certain amount of fun.
Because another survey shows another important factor: Most self-made millionaires have been able to identify with their work. Not a few of them said that the money was actually just a welcome and pleasant side effect.
Conclusion on how to become a millionaire
Historically and archaeologically, it can no longer be pinpointed when human society began to regard money as an end and no longer as a means.
Legends and myths of incredibly rich people pervade the history of almost every culture.
Being a millionaire is simply about realizing goals and dreams.
Most probably this was the driving force for wealth creation in the past, as it is today. But whether the money brings satisfaction in every way is another matter.
Psychologists agree that a lot of money does not make you happier in the long run than a little more money. Someone making about 15,000 USD a year and then making 30,000 USD the year after is happier than a top earner in the segment of 60,000 to 80,000 USD annually.
Personal consumption behavior has an upper limit above which practically everything is equalized. The billionaire looking at his brand-new 110m yacht is not a tad happier than the millionaire with his 25m yacht.
What is really important about the determination to become a millionaire is the impetus that comes with it and motivates the person as well as their environment. Without this drive, we might all still live in caves or huts.
Further reading: Financial Independence - Do you have what it takes?