I believe that Personal finance encompasses all the decisions a person might make when it comes to cash flow, budgeting, retirement, investments, multiple streams of income, and insurance protection. Every adult is bombarded with decisions to make when it comes to all these areas of life and I try to help with my thoughts and opinions on the various topics.
It is almost everyone’s dream to live comfortably. Some dare to be millionaires while others think that this is a lofty privilege reserved for the most talented or those born into rich families. The urge to make money is a natural part of being human, especially in developed countries where opportunities present themselves.
Having a goal is one thing but achieving it is another. The most important thing is working towards your goal and making sure that you achieve it no matter the circumstance. Some of the richest people in the world are self-made and have built billion-dollar empires from exploiting what we take for granted.
But one truth we cannot ignore or take for granted is the difficulties of making your first million. There is a difference between making a million and having it. There are some businesses that generate a revenue of $1 million but they still have to deal with expenses.
The path to becoming a millionaire
There are many avenues you can take on your road to earning your first million. Some land high-paying jobs, others invest in companies or build their own businesses. And for some, it is sheer luck. A matter of being at the right place at the right time.
But this is the path that average people have to take.
Invest in yourself
This certainly sounds like a cliché but it is probably one of the most important things you can do for yourself. While we have been told that we should cut costs and invest more, there is so much we can cut on and invest in to become millionaires.
Your greatest asset is yourself. How you invest in yourself and try to make yourself a better person determines how successful you will likely be in the future.
How many times have you heard of people who had millions of dollars but blew all the money away? It all comes down to a lack of financial discipline and knowledge. They missed the boat when they failed to invest in themselves?
How then do you invest in yourself?
Learn a skill. Read books. Take online courses. This is the theoretical side of things. Go get yourself a mentor.
Imagine going to a faraway land on a quest or mission. You can either carry a map to guide you on your path. However, it doesn’t prepare you for the terrain that you are going to go through.
Or you can go with someone who has traveled the road before. They will be able to tell you what you should avoid and the best possible shortcut.
The same goes for a mentor. While you may carry a blueprint on how to become a millionaire, it is easy to travel the journey if you have someone who has already taken the path before.
A mentor will guide on your journey. Give you tips on how to carry yourself. How to pick yourself up when you are down. Reach out to people you admire and do not be shy to ask for help. They may be happy to be your mentors.
Most importantly, wisely choose the people you associate yourself with. Sometimes, it is difficult to outgrow your environment.
Imagine if you were Warren Buffett’s friend. You would have made good investment decisions over the course of your life. Choose your friends carefully because indirectly, you are picking the people that will likely shape your future.
Many people know about investing but not many have the strength, will, and patience to go through the booms and busts of investing.
Investing is a great way to make your money work for you. It is also a good way to lose all your money. Some will even tell you that investing is a fine line between success and failure.
However, if done properly and with the required due diligence, investing is a financial game that will take you to your first million. But it is not an easy ride.
The return on your investment depends on your capital and financial instruments you invested in. The majority of people invest in stocks, precious metals, currencies, cryptocurrencies, futures contracts, government bonds, and more. Your investment portfolio should strike a balance between playing it safe and taking big risks.
Investing is not a game of luck but one that thrives on knowledge and the ability to time the market. Many investors are now more interested in emerging markets such as Singapore.
To have a glimpse of how the Asian country is slowly becoming a financial hub in its region, check out a list of best investments in Singapore curated by Dr Wealth. It gives you a detailed breakdown on investing in Singapore government bonds, properties, unit trusts as well as general financial instruments such as stock and cryptocurrencies.
Learn to take calculated risks
It is almost impossible to become a millionaire without taking a risk. The majority of success stories are filled with stories of people who took major risks, even akin to gambles. Mark Zuckerberg of Facebook left Harvard University to concentrate on Facebook even though it could have fallen through.
I have to reiterate though that you should only take calculated risks. There is a proverb that “it is only a fool who tests the depth of a river with both feet.”
Becoming a millionaire is a journey, not a destination
Becoming a millionaire is like dating the woman of your dreams. Simply because you are dating does not mean you have to stop putting an effort.
In fact, that’s when the real work starts because if you fail to make her happy, she will eventually leave you.
The same goes for when you have your first million. It is there for the taking. While no one is competing with you against it, you must be disciplined enough to know how to use it shrewdly otherwise you will wake up morning and realize that you are no better off than where you started.
You must make it a habit to save and invest well even when you have less money. The things you do today will not magically change tomorrow simply because you have a net worth of more than $1 million. If anything, your spending habits might get worse.
Prepare yourself on how to handle success. Remember that getting to the top is hard but staying there is harder.