This is a follow up on the article published by GMA News on April 5, 2016 from which they picked up from MoneyMax.ph. WOW! I was so amazed how the article has gone viral online. It was shared more than 10,000 times in Facebook in just ONE DAY after the article was published. In fact, it was the most viral among the articles where I was featured and I sincerely thank GMA News and MoneyMaxPH for that. Currently, as of this writing, it has been shared more than 12,000 times already! Amazing!
In this article, I will explain thoroughly the 7 steps I did to make my first million at the age of 26.
1. Have a Clear Goal. Why do you want to have Php 1 million and what will you do with it? In order to become a millionaire, you must assess yourself. Do you have that burning desire to achieve it? That desire will keep you in staying on track despite the hurdles and challenges that you will encounter along the way. In my case before, I had that burning desire to get out of that 9 to 5 job since I was not happy with the way the bosses treat their employees. I became their laughing stock and stress buster during the times when they were stressed. The pay was really good and that was a good opportunity that should not be passed. That is also the main reason why I stayed for three long years. After my stint in that company, I was able to save three-fourths of a million already. I made a vow to myself never to experience the same scenario again and that I will prove myself to them one day.
2. Have Multiple Sources of Income. For those who were able to watch my first TV guesting at ANC On The Money, many were amazed how on Earth I was able to save Php 100,000 in my first 5 months of employment and yet I am only earning Php 20,000 back then? The answer is I was able to save around Php 50,000 before when I did a buy and sell of mobile phones during my college years at Ateneo. Do not concentrate on one income alone. Try to create another source of income or buy assets that will give you passive income. Can you imagine if you are driving without a spare tire? What will happen to you if you got a flat tire and you are in a far-flung area?
3. Educate yourself on growing financial wealth. As young as 22 years old, I did a self study already about mutual funds. How do you make money out of it? How do you lose money on it? I was completely a novice at that time until I was convinced to make my very first investment in a mutual fund, particularly that of Sun Life. Of course you will experience fear at the start but fear is only caused by the unknowns. What you should do to eliminate that fear is to study the investment where you will place your hard-earned money. Find a mentor who will guide you through it. Nowadays, you can start investing via UITFs and mutual funds for as low as Php 5k to Php 10k.
4. Income minus Savings equals Expenses. This is the ultimate formula that I used. I pay myself first before spending. Whenever I received my salary, I make sure that first and foremost, I transfer part of it into savings. When it comes to the allocation, I make sure that at least 20% goes into savings. If for some circumstances, I did not meet the required 20%, I will increase my savings allotment in the next payday. If you practice this and apply it consistently, it will become your habit. In the end, habits form to become your character and character becomes your destiny.
5. Spend Less. During the time that I was grinding for my first million, I admit I had some extreme scrimping moments. Some of these are: I used hands-me-down office clothes of my dad and I stood in line for jeepneys and tricycles, among others. The key is knowing how to budget. Ask yourself, what expenses can you cut in order to reach your goal. Can you still live without those? Again, I would like to emphasize that you should have that determination and burning desire to reach your goal because more often that not, you will encounter a lot of challenges to save. Social pressure will be heavy on you as you will encounter some discouragements by friends and office mates to save.
6. Know that you’re going to make mistakes. Oh yes, success is not complete without failures and mistakes and I have my own share of it. In the past, I lent some money to people as part of my venture into business. But most of what I lent did not come back for several reasons. I trusted the wrong persons. The important lesson here is to learn from your mistakes and bounce back from those failures.
7. Keep track of your progress. How would you know what you have achieved if you don’t track it? I make sure to track my progress and I keep an excel file to track it. Every month end, I update it to know how much I saved for the month and how are my investments performing so I know my financial position. It was on April 2009 when I finally achieved my first million after 4 years and 7 months of employment.
Making your first million is not an easy task and it might take you longer than I did. Take note that money is not the end-all and be-all of everything. If you’ve been blessed, learn to grow and cultivate those blessings. Do not become a one-day millionaire. From time to time, help those who are in need and always thank the Lord above for those blessings.
P.S. For those active in social media, I just joined Instagram. You can follow me at Instagram @millionaireacts.
Incoming search terms:
- 7 steps to your first million
- Steps to your first million