Top 5 Ways To Become A Millionaire

Top 5 Ways To Become A Millionaire – How long does it take for an average American to earn 1 million dollars? 5 years? 10 years? How about 15? Nope, according to the data, it takes an average of 28 years for an average American to earn 1 million dollars. So if you start working at 20, it’s absolutely normal to make your first million by the time you hit 58, but no one wants to wait that long. The joy is to have that money when you are at your peak, in the late 20s or 30s, and not when you barely can walk.

That Ferrari is no longer fun when you have to visit the doctor every other day since you have health problems since you are getting old. But how do you become financially free when you are young. Let’s be honest; that’s not an easy question to answer. Your environment always plays a huge role. For example, 44 percent of millionaires in the United States are located in California. That’s not by accident because becoming a homeowner in California, where an average house price is around 700K dollars, automatically makes you an almost millionaire. But you can get an equally great property somewhere else for a fraction of that price.

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However, the main reason why most people fail financially is that they fail to understand how the system works? How to create wealth in such a system? You can complain forever that the system is broken, but that’s not going to help you in any way. So let’s find out why you will never become financially free by working hard? Why is there only one way to build wealth? And what is that way?

Top 5 Ways To Become A Millionaire

1. it’s impossible to get rich by working hard.

The other day I was having dinner with my friend, and he was complaining that he keeps working hard, but he is still living paycheck to paycheck. Even if he controls his spending, he barely saves pennies. And that’s what a lot of people don’t understand. Working hard is not a recipe for success. Working hard will never make you rich. You might feel like you are on the right track because you wake up early, exercise, work hard, but eventually, that effort will never pay off. Let me give you a very simple example of why it’s impossible to build wealth with hard work.

Let’s say you are an accounting clerk whose job is to insert data into excel. Your job is valued at a certain amount of money in the market, let’s say 20 dollars an hour. It doesn’t matter how hard you work, how disciplined you are. You cannot earn more than 280 dollars a day which is working 14 hours a day. Even if you work on weekends, 365 days a year, you will earn 102,200 dollars a year without taking a single day off. You can’t do that your entire life, especially if you want to have a family, enjoy some of the pleasures life has to offer, and do other things. So, if you can’t build wealth by working hard, then what should you do?

2. Money is made by taking a risk.

Does that mean you should borrow money to invest in bitcoin like my friend wants to do? The answer is no. Risk is taking responsibility for an uncertain outcome. It could be a negative outcome where you lose all resources that you have invested in or a positive outcome where you make a profit.

Taking a risk means making the right choices when there isn’t enough information. For example, in March 2020, Apple’s stock price plummeted by 28 percent. But from March 2020 to August 2021, the stock has grown by 155 percent. Now it’s easy to look back and explain why did the stock soar. The fed intervened, it purchased corporate bonds, people spent their stimulus checks on gadgets, and so on. But back then, when the fed just announced that it’s going to buy corporate bonds, distribute stimulus checks, it wasn’t clear enough how the economy is going to react to that. But whoever took the right decision during the uncertain times did end making a fortune.

3. How do you make the right decision when there isn’t enough information.

That’s the tricky part. You can get lucky. You are at the right time, at the right place, with the right idea. Your business takes off not because you are so smart that you predicted the future but because you found your passion. Take the guys who got into YouTube early. Philip the Franco, MKBHD, or pewdiepe. Back then, you couldn’t even monetize your channel. Even when you could, Youtubers earned pennies. It’s just in the last 4-5 years, YouTubers start earning real money.

But whoever got into the game early on did ride that wave and is now making a fortune. But it’s not just about luck. You can make the right decision even when there isn’t enough information. Take Jeff Bezos, for example, he was a successful manager at a hedge fund in wall street, but then he came across statistics that said – web usage is growing by 2300 percent year after year. So he tried to find a business plan that could take advantage out of that growth.

So he made a list of 20 products that he could sell online, and he started with books because they are unique. First of all, there are a few hundred million titles, so not a single bookstore could have them in one place, and the idea behind amazon was to provide that one place for all of those books. They didn’t even have to inventory all those books, they just kept best-selling books in the store, and for the rest of the books, they used – just in time inventory where the supplies would get them the books in 48 hours.

Then they moved to music back when we used CDs to listen to music, and now they sell pretty much everything. It wasn’t clear where the internet would be 20 years later, but you could make a few predictions based on the facts that were available back then if you had a deep understanding of the internet. But most of these Internet companies failed, especially during the dot com crash. And that takes me to the next point, which is – you can fail even if you have a 99 percent chance of success because there is still a 1 percent chance of failure.

4. How people think.

Let’s say there is a 70 percent success rate if you start this particular business. Most people would start that type of business because 70 percent is pretty high. But if you think about it, there is still a 30 percent failure rate. This means out of 10 businesses, 3 will fail which means it’s absolutely normal to take that kind of risk, manage it but still fail.
Not once or twice but 3 times and only succeed on the fourth time. But we always like to think that the failure rate is not going to happen to us. Yes, 9 out of 10 startups fail, but it’s not going to happen to me.

I am different. My idea is better, I am more passionate, and so on, so when you fail, you give up because you weren’t prepared for it. But the harsh truth is that, if you want to build wealth, be prepared to fail, Maybe once, maybe twice, or maybe 300 times like Walt Disney who was 300 times rejected when presenting Micky Mouse, but then when he made it to the top and won 23 Oscars (Walt Disney). The problem is that time is working against you, which is the next point.

5. You have a limited number of years.

There is a limited number of times you can fail. Time is not on your side. So your job is to minimize that risk as much as possible by being the best in that field. That’s why you need to discipline yourself. Work more hours. Educate yourself. So effort alone doesn’t pay off, but only if you use that effort smartly or as they say – instead of working hard, work smart. It’s really difficult to stay consistent over a long period of time.

After a few years of hard work, if you are not going to see any success, you will probably give up, that’s why it’s important to enjoy what you are doing, which is the last point. Because when you enjoy your job, that time is not wasted. Even if you fail, you are not going to regret it because you have been doing what makes you happy.

Let’s recap, working hard alone is not enough, and hard work is not going to pay off. The only way to make real money is by making the right decisions when there isn’t enough information and there is still a pretty good chance that you will fail, so at least if you are going to take that path, make sure you enjoy it.

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