How to Become a Millionaire
Becoming a millionaire involves discipline, hard work, and financial education. A lot of us are dreaming to become a millionaire and I was one of those. That is why I simply created this blog entitled Millionaire Acts – to know how a millionaire acts and to mimic their success.
Based on the book that I read entitled “The Millionaire Next Door” in which the authors conducted a study on how millionaires live, we can deduce what these millionaires undertook to achieve their “millionaire” status. And I will summarize it together will all the lessons I learned on how to become a millionaire.
MILLIONAIRES ARE FRUGAL INDIVIDUALS:
Millionaires know how to pay themselves first. If you are an employee like me, the first thing you should do is to pay yourself first whenever you received your paycheck. Set aside enough savings first before you spend the rest. Use the equation INCOME minus SAVINGS equals EXPENSES.
A good way to know how much you should save is by using the universal rule called Pareto’s Principle of 80/20. In business, you must put most of your efforts on the 20% that bring in 80% of the income. In saving, 80% of your savings come from 20% of your frugal living. In other words, you should live within 80% of your income and set aside at least 20% of your salary every payday.
Millionaires live below their means. Most millionaires are not fund of showing their wealth by living a lavish lifestyle. We are oftentimes compelled by media to live extravagant because that’s how media portrays how millionaire lives – large houses, luxurious cars, expensive jewelries, etc.
However, a lot of millionaires are simple. They wear simple clothes, live in a simple house, drives simple car and yet you will know they are already a millionaire by examining their bank accounts, their stock portfolio and other investments.
Millionaires know how to budget. One way to live below your means is to budget your income. You should assign every peso for each of your expenses every month after taking out your savings from your income.
MILLIONAIRES ARE FINANCIALLY LITERATE:
Millionaires know how to invest. The first thing to be financially literate is for you to know that the value of money depreciates over time because of inflation. And that is why you need invest. You need to let your money work for you because you worked hard to earn it. You should know how to read numbers and to understand some basic accounting terms.
Millionaires are familiar with the terms active income and passive income. You should have a lot of income streams. If you lose one, then there could be other streams that can support you. You should not just put all your nest eggs in one basket but in a diversified portfolio that may probably contains stocks, bonds, real estate, and other investment vehicles. Educate yourself with these types of investments and how these investments provide returns for you and what are the associated risks involved.
Millionaires start early. You should be informed that time is essence in becoming a millionaire. It’s not a quick-reach step on top of a ladder but it involves a lot of time. It’s not an overnight success.
MILLIONAIRES ARE DETERMINED TO BECOME MILLIONAIRES:
Millionaires have goals. You should start with a goal. It will serve as your target and gives direction to your actions. There will be a lot of temptations out there that can sway you away towards reaching your goals but it’s just a test of how determined you are. You must possess the drive and the will power to overcome these challenges. You should have the discipline to achieve success. Overcome your fears. Believe in yourself that you can become a millionaire! You can do it!
Millionaires have mentors. You should get yourself a mentor. He will serve as your guide to become a millionaire. He might not be physically present all the time to teach. You can buy his works of art like books in which he shared all the things that he went through in order to achieve his millionaire status.
Mingle with the same people who have the same mindset as yours. Learn from each other. Create value to each other. Surround yourself with positive people, people who can help you and teach you to reach your goals to become a millionaire. Read books that inspire you, that keeps your drive in flame.
Overall these are the collective thoughts I knew on how to become a millionaire. But I can summarize all these in one line - EARN MORE and DESIRE LESS
Are you ready to become a millionaire? Are you a millionaire in the making?
I would suggest to read on the following articles to increase your financial intelligence and to become the millionaire that you’ve been dreaming to be.
1. What Makes Rich Gets Richer?
2. Secrets of the Rich: Active Income vs. Passive Income
3. Rich Dad Poor Dad and Cashflow Quadrant
5. Game of Money - 4 Quarters of Life
6. Singapore’s Youngest Millionaire
7. Frugal Ideas on Your Water and Electric Bills
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May 8th, 2009 at 3:10 am
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May 8th, 2009 at 3:36 am
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May 8th, 2009 at 9:01 am
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May 10th, 2009 at 1:37 am
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May 10th, 2009 at 6:14 am
http://reynaelena.com/2009/05/10/reynas-top-10-choices-top-10-emerging-influential-blogs-for-2009/#more-10390
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May 10th, 2009 at 3:45 pm
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To Dinah and Jason: Yeah, we must have the right mindset and the body will follow and makes its own actions.
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To Digerati: Hello there! Thanks. You’ve got a great blog too. And I believe yours is one of the top personal finance blogs in the blogosphere. More power to you also.
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May 11th, 2009 at 1:52 am
good luck to us in our quest to millions! like reynz, i’ll nominate you in janette toral’s project.
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May 11th, 2009 at 2:04 am
Congrats sa pagkakanominate mo sa royal annointment ni reyna elena. Hahaha..
Social climb na kita ha. Hahaha…
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May 11th, 2009 at 2:14 am
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Silver, yeah malaking puntos yung pagkakanominate sa akin ni Kamahalan.
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May 11th, 2009 at 5:33 am
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May 11th, 2009 at 7:11 am
Before I forget, congratulations on your inclusion in RE’s Top Ten List. I’ve come from the palace and want to meet my co-nominees. “,)
Nice meeting you, Tyrone. I’m a friend of Elmot, too. Hayan, nag name drop na. lol
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May 11th, 2009 at 8:27 am
Kailangan maging iba ang perspective natin about money if we want to live like a millionaire, di ba??
Add na kita sa blog roll ko as part of my social climbing sa iyo…heheh…
More power sa blog mo Tyrone. Keep up the good work. I am sure I’ll be coming back for more here.
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May 11th, 2009 at 3:51 pm
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Silver, thanks for the add in the blogroll, I also added you as part of social climbing.
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May 11th, 2009 at 8:25 pm
I’ll definitely include you in the list of my nominations for the top 10 emerging blogs project. If you feel like it too, maybe you can also vote for my blog, haha.
Anyway, let’s meet up in the next blog event. Would definitely love to talk to you about some of your posts here.
All the best,
Carlo
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May 11th, 2009 at 8:39 pm
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May 11th, 2009 at 9:19 pm
honestly, I don’t want to be a millionaire… I want to be a zillionaire! lol
I hope I can find time today to update my ‘Blogs I Read’ page so I can add yours… so I can easily get back here to read some more.
I am an entrepreneur, but I do admit that I still have a lot to learn
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May 12th, 2009 at 3:38 pm
I had this realization and learned the same tips years back - yes, from Rich Dad Poor Dad. Up to know I still did not earn my first million, probably because I had been taking baby steps towards that goal. But I am on the way up there.
Or with your point that I did not have the right mentor to lead me there.
Have you already earned your first million?
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May 12th, 2009 at 4:16 pm
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@Gem: I haven’t earned my first million. They say that earning your first million is the hardest part and the next other millions wouldn’t be as hard as the first. Like you, I’m still taking baby steps to reach it.
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May 12th, 2009 at 9:54 pm
By the way inspiring ang post, isa kang tunay na millionaire!
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May 12th, 2009 at 10:11 pm
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May 19th, 2009 at 3:11 pm
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May 26th, 2009 at 7:10 pm
by the way, thanks for the tip.
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May 27th, 2009 at 1:47 am
[...] presents How to Become a Millionaire posted at Millionaire [...]
June 3rd, 2009 at 3:44 pm
every detail written is true…if you really want to become a millionaire ….this is a good guide.
nice post.
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July 19th, 2009 at 8:30 pm
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August 10th, 2009 at 8:35 am
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August 10th, 2009 at 3:20 pm
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August 24th, 2009 at 12:40 am
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August 24th, 2009 at 1:07 am
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August 26th, 2009 at 9:05 am
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August 31st, 2009 at 12:28 am
thank you for the tips tyrone, i’ll keep them in mind.
hinde ko na iaasa sa lotto ang pag-yaman ko, pramis yan. HAHAHAAAA
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Tyrone Reply:
August 31st, 2009 at 7:26 am
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September 15th, 2009 at 1:09 pm
I heard the audio tape (10x and I’m not kidding) - Millionaire next door and am a strict practioner of it. When I went to the ME to work, i only had one thing in my mind - I left Philippines to make money and not waste it. My worth income as per my auditor this year is P38M.
Here are some things that guided me to this path:
- read Pera ko Palaguin ko, Rich Dad Poor Dad & 4 Quadrants
- make money work for you and not us working hard for the money
- keep a simple life style. Learn from the Millionaire next door.
- keep at least P5M as buffer/liquid cash for emergency use
- once cash exceeds P5M - invest in real estate, stocks, business, treasury bills, etc.
- always look for financial vehicle that can grow ur money - either u create it or u copy someone’s idea & enhance it.
- and most important is plan, plan & plan. 80% planning + 20% implementation equals 100% result. treat urself as a corporation. Make it a point to start budgeting/planning as early as August or September for next year in terms of income/expenses/acquisitions/business plans, etc. 4Q is the staging period to make sure Q1 targets are met.
- think of urself as the CIO of ur own company - Chief Imagination Officer. All my financial ideas came from my imagination.
- and finally decide, whether to be a filipino millionaire or an “american millionaire”. If u go for the latter, ur net worth should be at least $1.0M or P48M. If former, an income of P1.0M makes u a pnoy millionaire.
I stil have P10M more to go for me to consider myself a US millionaire - Cheers & More Power!
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Tyrone Reply:
September 15th, 2009 at 9:06 pm
I still have 14 years to go before I reach the age of 40, the so-called “Mid Life” by many. My goal is to retire also at the age of 40s. Not exactly at the age of 40 but between the age of 40 to 50. Thanks a lot for your tips. Coming from a self-made millionaire like you is such a great lesson.
Thanks a lot for sharing and hopefully you visit my blog often and share some more tips for me and my readers.
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September 18th, 2009 at 12:06 am
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Tyrone Reply:
September 18th, 2009 at 12:19 am
http://www.millionaireacts.com/1202/ways-to-fund-and-finance-a-business.html
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September 18th, 2009 at 12:23 am
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September 21st, 2009 at 11:49 pm
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October 11th, 2009 at 4:29 am
I love your Tips here. They’re simple and direct to the point. These are essential tips on how to become a successful businessman.
Parang alam ko na kung sino ang kukunin kung mentor..
Thanks.
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October 19th, 2009 at 9:50 pm
I don’t use net worth in my calculation at all. If I am a millionaire, I’m talking $1 million in cold hard USD cash.
Best
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Tyrone Reply:
October 19th, 2009 at 10:30 pm
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October 20th, 2009 at 9:16 pm
I’ve only got about $24,000/yr in passive income for now, with a goal to get to $120-140,000 in 9-10 years. $1 mil would be tough.
If I can pay off my rental prop, I’ll get another $30,000/yr which would be sweet.
Just gonna take time!
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October 25th, 2009 at 11:41 am
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November 21st, 2009 at 2:55 am
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December 13th, 2009 at 7:43 pm
great post,am always looking for your post in fact i subscribe to your site already. Sana mag create ka rin ng forum hehehe,,thanks a lot!
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Tyrone Reply:
December 13th, 2009 at 11:51 pm
Tagal ko na rin yan pinag-iisipan to have a forum.
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March 5th, 2010 at 11:34 pm
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