Becoming a millionaire is probably a dream that we have all dreamt at some point. But is it really that easy on a small salary? We have for you here, 7 easy steps to becoming a millionaire. While these are not quick fixes, but if you follow these directions, you will be well on your way to becoming a millionaire:
- Have a Sound Financial Plan in Place
- Save, Save and then Save Some More
- Manage Your Expenses
- Manage Your Debt
- Invest and Make More
- Make Bigger Goals
- Increase Your Income Streams
Sound Financial Planning
Creating a solid financial plan can help identify money goals, income streams and expenses. It also helps in giving a direction towards savings and investment. At the end of the day, the plan isn’t just about the goal or defining how wealthy you want to be. Rather, it is an actionable list of steps on how to achieve your money goal. Once you sit down and work on the scenarios for each investment and saving option, the money goals start becoming real.
Save, Save and then Save More
Your Grandmother and your mother have probably scolded you all your life to save more and spend less. Their advice isn’t all in vain. When you save more you have more options to make bigger expenses later. Having rainy day funds and investments can help with expected and unexpected expenses like buying a car, or paying a medical bill!
Manage Your Expenses
Who doesn’t like designer watches, sunglasses, and clothes? But expensive tastes beckon expensive upkeep, meaning spending even more money to maintain that lifestyle as well. Living beyond means outside of the salary you earn could mean debts. Within those means, and still maintaining a high maintenance lifestyle means spending all that you earn on this lifestyle. Manage your expense, and maintain a lifestyle that is easy to sustain without having to break the bank.
Manage Your Debt
A key tip, if you’re going to eat it or wear it, never charge it to your credit card! Even after that, remember that the more you borrow, the less you have, to invest in the future. Which means you’re losing out on the value of money. So, overcome your debt, and credit card swiping habits. Your future millionaire self will thank you.
Invest and Make More
The best part of living in today’s world is the choices we have regarding investments. Investing money in sound options can give good returns in the future. Systematic Investment Plans that allow you the option to continue to invest on a regular basis, like monthly or quarterly, do not become a burden on your pocket but help build up a chunk of change that can make you a millionaire.
Make Bigger Goals
With each goal that you create, always create a stretch goal. You shouldn’t simply be aiming to build a million rupees in funds or investment, but perhaps 10 million, or make it into a stretch goal to 50 million and aim for bigger goals. With bigger goals, you will work harder, put in a sounder financial strategy and devise better plans.
Increase Your Income Streams
This should be a no brainer. In today’s world, there are numerous options to choose multiple income streams. With a single income stream, you can perhaps invest to earn a million rupees, but with another income stream, you could work on investing and builder a bigger egg nest!
And just to give you a taste of how in 30 odd years, you can be a millionaire, here is a nifty calculation for you:
Amount invested every month: PKR 5,000/-
Rate of Return: 10% average return per annum
Saved for: 30 years
The value of your investments at the end of this period would be Rs. 11,396,627/-
Who said becoming a millionaire was difficult!?