Most people want to be a millionaire someday. Those people comb the internet for advice on how to succeed.
But that information isn’t always realistic when it comes to reaching your financial goals. We decided to break down a collection of lies you may have been seen about becoming a self-made millionaire.
20. You Need To Focus On Earning Passive Income
While it is true that many millionaires earn passive income, most people oversimplify the process. We hear stories about how some millionaires are earning money while they sleep, and it seems completely unfathomable for a normal person to get there. The truth is that passive income truly is possible, but it takes years of working 60-80 hour weeks before you can be in a situation where money is rolling in on its own.
The belief that passive income is the one and only way to become rich can get people into trouble. This is how so many people fall into scams, or they buy online courses that cost several hundred dollars. It is never as simple as it seems, and it is usually a secondary part of their real job. For example, a YouTuber can make passive income from selling merchandise, books, or affiliate links. But they had to build a following before they could do this. Instead of hoping to immediately start making passive income, young people should focus on developing their careers instead. As time goes on, they may develop opportunities to earn passive income.
For whatever reason, people have this strong innate feeling that there is a huge “secret” about unlocking the key to success in life. This is why books like The Secret became so wildly successful. There are even conspiracy theories that some of the most wealthy people in the world are all a part of some club where you’re invited to know the keys to becoming a millionaire.
In reality, there is no secret formula, especially since every path to becoming a millionaire is going to look drastically different from the next. It is mostly hard work, persistence, and a drive to keep going. But if there was any formula to success at all, it would look something like this:
1) Identify what you most passionate about in life.
2) Figure out how you can make money doing it.
3) Research how to achieve your goals.
4) Take action.
5) Keep trying, no matter how difficult the task may seem.
18. The Economy is Bad & Income is Out of Your Control
In 2008, thousands of people lost their jobs during the Great Recession. Companies made budget cuts, employees were working fewer hours, and opportunities were few and far between. For a while, people truly could blame the economy for their financial problems. But over a decade later, people are still using it as an excuse for why they aren’t making much money. Many of them have probably heard this from their boss, and accept it as reality.
Even in a bad economy, there are still certain businesses that flourish. For example, dollar stores were expanding all over the United States. People began to do their shopping online, instead of in brick and mortar stores. New opportunities appeared around every corner if you knew where to look. The economy will continue to go up and down for the rest of your life. But it is up to you to pivot and figure out how to make money, even in a down market.
For years, our generation was taught that the only way to succeed in life was to get a college degree. Even after the Great Recession, there are still people who preach the idea that you must go to college if you want to become successful. It is true that if you want to become a millionaire, you need to specialize in high-level skills. There are certain professions like doctors, lawyers, and engineers where it is totally necessary for you to have a degree. And for those people, they can eventually end up with a comfortable 6-figure salary. However, not all successful careers start with college. In fact, most people who graduate with a degree nowadays have a crippling amount of debt, which makes it even harder to invest, start a business, or do the things necessary for them to become a millionaire.
There are plenty of self-made millionaires out there who skipped college because they focused on cultivating the skills they had. For example, think about all of the famous Hollywood actors. Very few of them went to college because they went straight into acting. Many of the wealthiest entrepreneurs never completed their college degree either. Think about Mark Zuckerberg, Steve Jobs, and Bill Gates. None of them finished college, because they realized that their time was better served to grow their business.
There is a huge difference between having an abundance mindset and overspending on ridiculous luxuries. In case you aren’t aware, and abundance mindset is believing that you can make more money, and manifesting that reality through hard work. (We did a whole list on abundance mindset on Self-Made.) Some people completely get this wrong. They try to say that you should “fake it to you make it”. They think if they look rich, people will take them more seriously. Many people interpret this as driving a luxury car, buying a Rolex, or wearing the newest designer fashion.
While this might help to boost your confidence, it’s not going to help you earn more money. If you are not rich yet, those items are most likely charged to a credit card, and it’s actually hurting your financial situation more than helping make it better. People who are truly successful and good with their money can spot someone who is “fake rich” a mile away. They are often talking about their plans without actually taking any action. Millionaires are more likely to respect someone who drives a car that gets great gas mileage and can show that they are actually making progress in their careers. Other successful people understand that flashy people are usually just for show, and the truly rich people are usually reserved and understated.
Plenty of personal finance blogs out there will tell you that you need to “save money.” This is usually very ambiguous, but we all know what it means; Stop wasting money on things you don’t need, and put that extra cash away for a rainy day. This is good advice, but it does nothing to help you become a millionaire. Hypothetically speaking, let’s pretend that you save as much as you can, and you end up with $10,000 in the bank. This is fantastic. It will help you prepare for an emergency, and maybe you can use it as a down payment on a house. However, it’s a very far cry from being a millionaire.
People who become millionaires are more focused on increasing their income rather than counting pennies. Many of them will also find an income stream that can support the lifestyle they want, so that it is not necessary for them to cut back. Don’t get us wrong- they do not overspend or live outside their means. They just figure out a way to make enough money to buy the things they really want.
Plenty of people give advice that if you want to make a lot of money, you should ask for overtime. Or, they decide to work two jobs. This might be necessary for the short-term if you have no other choice to pay the bills. But if you are getting paid by the hour, you will eventually reach a limit to how many hours you can work in a day. By trading your time for money, you will always eventually plateau, because time is a limited resource. We all only have 24 hours in a day, and need to sleep and eat. So instead of trading time for money, you need to start by trading results for money, instead.
Once you start getting paid by results, you can optimize that so that it takes a small amount of time to accomplish your goal. For example, if you work in retail, you might make $10 per hour. But if you have a shop selling hand-made crafts on Etsy, you might make $10 profit from an object that took you 10 minutes to make. Instead of thinking that working more is the solution to your financial problems, try to think outside of the box to other options.
Unfortunately, there is a misconception that poor people are too lazy to make a living wage. In reality, there are plenty of people who work their fingers to the bone, and yet they are still poor. The reason why some people perceive them as “lazy” or “dumb” is that they are not trying to better their situation. Instead of working harder, you need to work smarter.
Instead of working longer hours in more grueling conditions, ask yourself if there is a job you can do that makes more money. If the answer is “no”, then try to enter some sort of training or go back to school. And you don’t necessarily have to go to college, either. There are so many certifications out there for blue-collar jobs that will guarantee that you make a higher hourly wage. Try to look into opportunities in your local area, sign up for a temp agency, or visit a community center to learn about your options.
It’s true that some rich people got a head start in life by inheriting their money, and they would have never been successful if it was not for their parents. (A great example of this is Donald Trump, who has failed countless business ventures that he started on his own, and yet he still reaps the benefits of his grandfather’s real estate empire.) However, these rich kid’s own parents or grandparents had to work hard to earn that money somehow. Even “old money” families that go back several generations, it all started with one scrappy ancestor who figured out how to make a fortune.
There are plenty of people out there who started their business with next to nothing. Look at Steve Jobs, who started Apple Computer in his parent’s garage. There are plenty of ways to turn $1 into $2 and snowball from there. The hard part is just to find your niche, and figure out how to build your wealth.
It’s no secret that Millennials are over-educated and under-employed. Many people leave college with a Bachelor’s Degree and cannot find a high-paying job right away. So they might get the advice from someone that they should go back to Graduate School because it will help them find a better job. In some cases, this may be true. For example, a Bachelor’s in Pre-Law is pretty useless, unless you have an additional certification as a Paralegal, or you go on to Law School. Same with Psychology. You cannot practice as a therapist until you have at least a Master’s Degree.
Outside of these specific fields, a Master’s Degree may not be necessary. In fact, it might actually hurt your situation more than help. If you do not have a solid career plan, and you don’t know exactly how Graduate school will help your life, it is likely that it is a bad investment. And unless you plan to go to Medical or Law School, most of these fields in higher education will get you to six figures at best, but not a millionaire.
In nearly every personal finance article on the internet, you will hear someone telling you to make a budget. While this has actually helped some people build their wealth, it is not the only way to do so. Making a budget is focusing on reducing your spending so that you can save more for your future. This is all well and good. Everyone should do this, especially if they want to live comfortably during retirement.
However, what truly matters is what you do with the money you have saved when you are on a budget. Are you just using it as a way to know how much money you have left to go on a shopping spree when all of your bills are paid? Maybe you’re setting aside just enough money for a vacation. Or are you making a business plan, and putting the excess towards an investment? You aren’t going to be a millionaire on a budget alone.
Nearly everyone on the Internet who you see selling a course on the “secrets” of getting rich is just trying to take your money. Many of the techniques they are selling are either scams, or they are over-promising on the results you can get. A lot of these YouTubers will rent expensive cars and a house just so they can film a commercial, claiming that if you buy their course, you’ll be rich. In reality, he has tricked you into thinking he is rich. His real income comes from selling these bogus courses.
All of the information you need to be rich is available for free online. All you need to do is just focus on what you want your career to be. Then, start to do some research about what other people do in the field. Engage in forums, and don’t be afraid to ask questions. There is no need to waste your money on an entrepreneurial course. In fact, Forbes has a list of free classes you can take online.
There is the infamous phrase that goes, “you need money to make money”. In a lot of ways, this is true. However, some people hear this and use it as an excuse to give up. They think; “Well, I don’t have a lot of money. So that means I can’t succeed.” If you don’t have money, it will be significantly harder to become a millionaire, but that doesn’t mean it’s impossible.
You might know Peter Dinklage from his role as Tyrion Lannister in Game of Thrones. For years, he had to live on his friend’s floor while he tried to break into acting. As a dwarf, it was difficult for him to land roles in film. And for a while, he gave up hope and got an office job. It wasn’t until he was in his 30’s that he finally decided to go after his dreams. Now, he is a millionaire and a highly celebrated actor who gets new gigs left and right.
7. You Need to Major In Finance or Business in College
Earlier on this list, we already mentioned the fact that you don’t necessarily have to go to college at all, depending on the field you want to go in. But there are some people who believe that if you go to Business School for an MBA, or if you become an expert in finance, it’s the best chance of becoming a millionaire. It’s true that the things you will learn in these subjects are far more valuable in terms of building wealth than what you’ll learn in a lot of other majors.
However, it is not a guarantee that you will become a millionaire. In fact, a lot of business majors end up working a normal 9-5 salary job for a corporation. You can also learn about business and investing by reading books or watching YouTube videos. You could have a degree in almost anything and still be able to comprehend the concepts that you’ll learn in school. Before you pay for a business school, read the book calledThe 10 Day MBA. Also check out Forbe’s list of free personal finance courses that you can take online.
It’s true that investing is one of the best ways to grow your wealth and become a millionaire. However, receiving this advice is incredibly vague. Most savings accounts only give back 1%. According to a poll by Gallup, many young Americans are still hesitant to trust putting their money in the stock market. Everyone in their 20s and 30s grew up during the recession, so it’s understandable why everyone hesitates to try.
According to Nerd Wallet, the average annual return on a stock return is 10%. Depending on how much you invest, and how wisely you invest it, this may not be enough to be a millionaire. One of the best options to eventually retire with a million dollars is if you max out your ROTH IRA contributions every year, starting in your 20s.
5. Once You’re a Millionaire, You’ll Never Have to Work Again
Some people out there want to be a millionaire because they want enough money to relax and never work another day in their life. People who have this mindset feel this way because they hate their job. This mindset is exactly why so many athletes and lottery winners eventually lose all of their money. They are raised believing that work is this awful thing. So as soon as they get a windfall of money, it’s gone in the blink of an eye.
Most people who become self-made millionaires accomplished this because they actually loved what they do, and it doesn’t feel like work. They are productive, hard-working people. Someone who was motivated enough to go from the bottom to the top are often trying to build up to the next best thing. So they would get bored if they stopped working. Many of the most successful people actually dread retirement, and they want to work until the day they died.
There are some people out there who are convinced that the only way to go from poor to rich is by being a bad person. They have been so beaten down by society that they think it’s actually impossible to make an honest living. The truth is that yes, you can be a decent person, do all of the right things, and still become a millionaire. It doesn’t have to be cut-throat. In fact, people who are completely terrible people often cannot get along with others. If no one wants to work with you, then you can’t succeed.
If you have this jaded mindset, try to remind yourself that people like Oprah Winfrey are genuinely sweet, good people. She succeeded by being amazing at talking to people about their lives, and connecting on a deeper level. Talent and hard work are what help people succeed. It’s true that some jerks somehow figure out a way to get ahead. But Karma has a way of getting back at them.
For those of you who are familiar with cryptocurrency, you may have heard the term “HODL.” This is the misspelling of “Hold,” but it also stands for “Hold On For Dear Life.” This is a term spread around by Bitcoin enthusiasts who believe so strongly in the coin that they never want to let go. Bitcoin traders believe that someday, their holdings will make them a millionaire, if they just have the patience to hold on for a long time. Some people even use Warren Buffet as an example of an investor who holds valuable stock he truly believes in.
Just like the stock market, cryptocurrency has its highs and lows. And even Warren Buffet trades during these high and low periods. He is hoping that other people will “HODL” so that he can make his profits. This is laid out in the book called Trade Like Warren Buffet by James Altucher. Most people who succeed in the stock market know when it’s a good time to sell, and when it’s a great time to buy. This takes years of studying, and it’s not something that most people succeed at. But most of the time, the “HODL” mindset will not make you a millionaire. Think about all of those people who held on to their dot-com stocks, because they believed the Internet was the future. Yes, online companies were the future, just like how blockchain is eventually going to be apart of our everyday lives. However, companies like Amazon were the only ones providing a truly revolutionary service. So before you think about committing to a cryptocurrency long-term, ask yourself if it will still be around in 10 years.
At some point in your life, you may have had someone try to convince you to join a multi-level marketing company. These are companies that require you to buy a product up-front in order to sell those items to your family and friends. During team meetings, you will be encouraged to work hard with the promise that one day, maybe you will become a millionaire. Many of the CEOs claim to be motivated to help others succeed. In reality, 99% of their salespeople lose money and never earn a dime.
These MLM’s encouraged people to recruit others to sell because you earn a commission from their sales. This is actually a pyramid scheme. Don’t be fooled if a company is called a “multi-level marketing” company. In truth, they are actually pyramid schemes, but they just haven’t been legally found to be one in court (yet). If you think that you or a loved one might be a victim of a pyramid scheme, please read the FTC guidelines.
1. Buy This Stock (Or Cryptocurrency) And You’ll Be Rich
No one can predict the future. So if someone tries to tell you that a certain stock or cryptocurrency is about to skyrocket, they are lying. Maybe it’s not intentional or malicious. They may truly be hopeful and excited, because they are invested, too. However, no one should be telling you how to invest your money unless you are paying them to be your financial advisor.
The next time someone tries to convince you to buy a stock, ask yourself what this person’s motivation is. A popular YouTuber or public figure might promote a new cryptocurrency because they want the value to go up. Once the stock is worth more, they can sell it for a profit. This is illegal in the stock market, but cryptocurrency is so new, that many public figures are getting away with this scam. Always do your own research before trusting a someone’s investing advice.