10 Ideas That Can Make You a Millionaire

Last week I wrote about the reason I chose a target of $100 Million net worth.  This week I will share with you the 11 things I have done that I believe were most important in obtaining the wealth I have today.  I believe that anyone can do these things and become a millionaire.  The list I am going to share are things I have done since I began investing in 2001 and I have carried on to today.  They have worked for me and I believe they can work for almost anyone.  The list is simple and easy to understand.

10 Things To Do That Can Make You A Millionaire:

1. Get a good paying job in a high demand industry.  I know this is a balance between doing what you have a passion for and taking up a career that you know will result in a steady and substantial paycheck.  In some cases (like mine), these two things collide.  I have a passion for what I do and it happens to be in a field and industry that pays well and is normally in demand.  This might not always be the case.  And some would even argue, "Do what you love and the money will come".  I am not so sure this often cited mantra is the formula for success.  Successful people are passionate about what they are doing because they are passionate about being successful.  They would have been passionate about anything they found themselves doing because they have a passion for success.  For the best start to successfully building wealth find a good paying job in a high demand industry even if it is not where your 'passion' lies.  With a early successful start, you can leverage your success and explore those areas of 'passion' that might not at first provide the paycheck substantial enough to build a substantial base of wealth.      
2. Ensure your financial priorities, strategies and plans are aligned with your spouse.  If you and your spouse are pulling in opposite directions it will become almost impossible to reach any goal that is more than mundane.  You need to be a team.  To be a team your priorities need to be aligned.  For your priorities to be aligned you need to share a common set of goals and develop plans together.  You must have a shared vision of success and plans that are mutually agreed.
3. "It is more important to invest NOW than to invest perfect".  Start investing as soon as possible.  Getting time on your side is one of the most important things you can do to build wealth.  The earlier you start investing the more time you have to compound your returns.  And you know the power of compounding over time.  Better to start NOW than to wait for that perfect opportunity.  I started seriously investing as soon as I had a steady income stream from my first job after graduating college.  I wasn't perfect in my investment choices and even made a few major mistakes.  However, just getting into the game early has made a big difference for my net worth today.  I know it can be daunting if you have goal to build $1 million or more in net worth and you start our of college with $0 or even worse with lots of debt.  Believe me, if you take disciplined approach and get started early you will be surprised in your balance sheet a few years down the road.  Just take a look at my  Net Worth Page to see how quickly your net worth can grow if you start early and put time on your side. 
4. "It is more important to invest MORE than to invest perfect".  It is far more important to maximize the amount you invest than to rely on superior returns as a way to invest less.  Far too many people invest a meager amount - maybe 5%, 10%, 15% of their earned income - with the belief that they will achieve out of the ordinary returns on their investments that will overshadow extra money they could otherwise invest.  It is much more important to focus your energy on ways to invest a higher percentage of your income than to find the perfect investment that might the 'big fish' you can brag to your friends about for the next few years.  I suggest you focus on , 1)  finding ways to invest a higher percentage of your income through managing your expenses, 2)  increasing your current main source of income through career management or growing your business,  and 3)  finding new streams of income from a new business, rental real estate, consulting services, etc.  I make an effort each year to grow the amount I invest through each of these methods and have successfully increased the gross amount invested each year as well as the amount I invest as a percentage of my income. 
5. Read as much as possible.  I strongly believe that the better you understand how the world works at a basic level the better investor you can be.  I also believe that reading can be the best way outside of direct experience to gain that understanding.  I read all types of information; history, current affairs, business and management, leadership, personal finance, investing.  I believe you should read non-fiction that helps you understand at a basic level how the world works.  I believe you should read investment newsletters that help you generate ideas for investments, understand differing perspectives, investment philosophies and strategies.  I believe you should read newspapers and magazines to keep up with where the world is headed, what broad trends are developing and what businesses have the best products that you should consider as an investment.
6. Set Goals.  Develop Plans. Measure Progress.  Even if your investing philosophies, strategies and plans are flawed, setting a goal can take a long way towards building the wealth you desire.  You don't have a chance to adjust your strategies and plans if you don't first set a goal and measure progress towards achieving that goal.  Set a goal - even if you aren't sure if the goal is the 'right' goal.  Sometimes we obsess over how we should arrive at our 'number'.  We lose valuable time by not putting a goal out there for ourselves that we can start to measure against and adjust plans as necessary.  Develop plans that move you from your current situation to your goal.  Make your progress measurement against you plans systematic and routine.  You will begin to manifest wealth and opportunities into your life by setting a goal, developing plans, taking action and measuring progress against your plans.    
7. Make your goals ambitious.  As I wrote in last week's post, I think it is important to aim high when setting your goals.  Isn't it better to fall short of an audacious goal than to reach one that was set too low?  How will you ever stretch yourself to consider new businesses, news streams of income, new partnerships if your goals are only set based on what you know you can achieve today?
8. Make your investments automatic.  When it comes to the mechanics of investing this one has to be one of the most important to building wealth over time.  It takes time and energy to make decisions.  So do your homework and make a decision to invest once and then put it in automatic mode.  Decide that you will maximize your 401(k) plan.  Decide you will invest that 401(k) in a low cost broad market index fund like the Vanguard S&P 500 Index (see number 10).  Then put it in automatic mode by contributing an equal amount every month, every year for the next 30 years.  Do the same for an IRA.  Do the same for a taxable account.  I do this for all of my accounts.  Most of my accounts automatically draft from my bank account and invest directly into my chosen investment.  The only exception is my brokerage account for which I automatically transfer an equal amount each month to the brokerage account money market and then make investments into individual stocks when I have completed my research and feel it is the right time to buy.  You will feel free when you know you have made the right decision once and then put it in automatic mode with the assurance you are executing your plan and on your way to financial freedom.
9. Invest in low cost options to build a strong base.  You have all read about how high fee mutual funds or brokerage fees associated with active trading can eat away at your returns.  I don't propose that you ignore investment opportunities that can provide superior returns because of fees.  I do, however, believe the base of your wealth should be invested in low cost options like index funds such as the no load funds offered by Vanguard or other low cost mutual fund companies.  If you believe in items 4, 5, and 9 above, you should get started as soon as possible investing automatically as much as much as possible in a low cost mutual fund like a S&P 500 index fund or total market index.  You should start here and as you build a substantial wealth base then venture out into other investments such as individual equities. 
10. Reinvest your dividends.  There is no better way to handle dividend payments than to automatically reinvested.  I know this may depend on where you are in you investing career.  If you are later in the game you might be relying on these dividends to cover your living expenses.  If this is not the case, find out how to automatically reinvest your dividends.  You will be surprised at how quickly those dividends begin to compound and make a real difference in your portfolio.

There you have it.  Those are the 11 ideas that have gotten me to almost $3 million dollars net worth in about 13 years.  I think these ideas can work for anyone.  They are not hard to understand or implement.  It just take a commitment and some discipline. 

What are the ideas you have established that have help you grow your net worth?  I am interested in hearing your ideas so I can adopt some of them as I make plans to achieve $100 million dollars in net worth!  Waiting to hear from you!