Twenties is the age of learning things and making mistakes. There is not much scope of earning and you should not even focus on earning but rather learning how thing works so that you can advance in your career. Does this sounds similar to your opinion of the twenties? Well, if your answer is yes, then this post is for you.
Being a millionaire in your 20s – does this sounds an idea too far-fetched and incomprehensible? Well, believe me, it is not as hard as it might sound to have a seven figure bank balance in your 20s. However, it certainly takes effort but it is not something you can’t achieve.
Earning your first million dollars could be tough because you have to do everything from scratch. However, once you have achieved this milestone, the way ahead would be extremely easy
So, let’s quickly turn our attention to the 10 Practices that can help you become a millionaire in your 20s.
1. Change the Way You Perceive Money
The first and the foremost thing to do is to change your approach towards money. If you have always thought of money as merely materialistic and even as evil sometimes then you can’t possibly work in the direction of making huge amounts of money yourself.
Always keep in mind money is not everything but it is something extremely essential for a good life. How can be possibly happy if you are not able to eat at your favorite restaurant, wear your favorite clothes, enjoy a vacation at your favorite destination and do all the things you like?
So, start viewing money as a powerful tool in achieving your dreams. Just move it up in your priority list somewhere around the 2nd or 3rd place. Once, you realize how money works and how important it is, you can then think of making millions.
2. Build Multiple Revenue Streams
No single job can pay you a million dollars, no matter how good or respectable it is. Believe me all the rich people out there do not rely on a single income source. Instead they put to work a lot of different things which earn for them continuously.
So, you first step should be to try and build multiple earning sources so that when revenue from all is pooled together, you are able to get a good sum. As you would have sensed, it is not possible for any person to work on several full time jobs. You are not a superhuman balancing different roles at the same time.
Therefore, try to build passive income sources. Passive income means those sources of revenue which do not need to be looked after regularly but at the same time they generate earnings continuously. So, you can rent an apartment, or create an online course. This will help you to manage different streams of income all at once without being extremely stressed out.
3. Get into the Habit of Saving and Investing
There is a very famous quote of George Clason from the book ‘The Richest Man in Babylon’ which goes as, ‘Pay Yourself First’.
Develop the habit of regularly saving. Most people tend to spent all their salary on luxuries like eating out, partying and shopping for new clothes and by the end of the month they are in such a miserable state that what seems their last hope is their salary of next month which once they get, they again spend the same way, not realizing what harm they are doing to their future.
Remember, a part of what you earn is yours to keep. Try to save as much as you can and if not much then save at least one-tenth of your earnings. Now saving does not mean that you have to cut back on even the essentials. Just don’t spend unnecessarily, that’s it. If you are able to curb your wasteful expenditure, you would take a big leap in your journey of becoming a millionaire.
Also, saving for a rainy day is not the best way to get to a million dollars. Instead, put that money into your investments to potentially have it grow at a faster pace.
Investing is not as complex and daunting as it might appear. Instead is so much fun that once you start investing you would feel like putting more money for more returns. But control this excitement. If you are beginner and have never invested before then you can start by putting your money in SIPs and Mutual Funds. You can also invest in government bonds which are very secure. You can take advice on this from a portfolio and investment manager of your bank.
4. Break the Paycheck Cycle
No matter how harsh it might sound the reality is, we all are somewhere or the other trapped in this cycle of monthly paychecks where we feel secured. You just can’t think of becoming a millionaire in your 20s doing a 9-to-5 job when people have been doing such jobs for almost have of their lives and are still broke.
We all fell comfortable in an environment where we can predict what is going to happen next. So, you know that as the new month is beginning you would have your salary credited to your bank account. You will safe and secure because you are assured of having this fixed paycheck at the beginning of each new month. However, this mentality is what hols you back from realizing your full earning potential.
So, put your new skills and expertise to the test by becoming your own boss. Starting a business is one of the best ways to grow your income. There may be more risk involved, but the reward can also be much higher.
Realistically, you probably don’t want to ditch your job and start a business from scratch. Instead, get the foundation laid while you’re getting a paycheck and learn the basics first. Once your business starts earning money, you can ditch the job and focus on your new income full-time.
5. Develop Skills
Now this might appear to you as very unrelated. But just give it a thought, is it possible to become a millionaire without having skills? Certainly not.
So, start developing skills that most successful people have if you lack them currently. Focus on financial literacy, learn how the stock market works and how you can develop an investing strategy for yourself. Also learn about startups and entrepreneurship, because at the end, you will have have to start a venture of your own if you want to earn a million dollars.
6. Treat Every Purchase like an Investment
If you really want to be a millionaire in your 20s then you have to develop the habit of looking things from the perspective of an investment rather than a mere a purchase. The earlier you learn this the better it is.
Living like a monk is not the fastest path to millionaire status. Some purchases can actually increase your productivity and potential income. After all, time is money. Go for purchases that will pay off in the long run, but keep in mind that everything you buy sets you back on your road to a million.
Don’t add to much liabilities to your shoulders by taking home loans or car loans. Minimizing your liability expenses and maximizing your assets investment is the best practice. You would really not want yourself in a situation where you have to cut back on your need to pay for your loans.
7. Shoot for $10 million, not $1 million
“Shoot for the moon. Even if you miss it you will land among the stars.” —Les Brown
This quote by Les Brown applies even in financial decisions.
Although getting to one million dollars may seem like a lofty goal, the fact is that once you reach it, surpassing it becomes so much easier. The more money you have, the simpler it becomes to reinvest and potentially make more.
So, with that in mind, don’t settle for one million. Instead, set your sights higher. Make it $10 million or more. By establishing an even bigger goal, that will help motivate you to reach it. If you stopped pushing and hustling at one million, you could wind up backsliding. Instead, keep moving the goalpost and let that drive you further than you thought possible.
Set your sight on a much higher target. Reaching your first million will only mean something if you use it to catapult your finances even further.
8. Surround Yourself with Successful People
Just because you don’t have an active social life anymore doesn’t mean you can’t hang out with other people. Instead, it means that you need to be more diligent about the type of people with which you associate.
Ideally, you should find friends who are either already in the millionaire’s club or working towards it. Finding other successful and motivated people are going to help you reach your goals that much faster. How? Here are a few reasons.
Networking Leads To Opportunities
Regardless of how much you learn by yourself, you need other people to help you realize your dreams. Let’s say that you want to get involved in real estate by flipping properties. If you hang around others who are already doing that, you can gain valuable insight into the industry. Start by working for someone else so that you can learn the ropes, and once you feel confident in your abilities, strike off on your own.
Another example could be that you have a business idea and need startup capital. Meeting with investors and wealthy entrepreneurs can help you find the money necessary to get your company off the ground.
Collaboration Sparks Innovation
When you hang around other motivated entrepreneurs, it’s much easier to get inspired to follow your vision. In some cases, you may be able to find business partners that share in your vision so you can achieve it together.
The idea of the Master Mind has been around for a while, but the concept is that intelligent and collaborative minds can build off each other. This collaborative approach ensures that everyone involved is more successful in the process.
Becoming a millionaire in your 20s is not an easy task. But that doe not mean you can’t be one when we have so many examples who achieved the same milestone in their 20s. You can take inspiration from Riju Ravindaran the founder of Byju’s or from the Kamath brothers you are now one of the youngest billionaires.
What you need to be a millionaire is the right approach and the right mindset. If you are able to follow your financial plan in a disciplined manner and do all the things mentioned in this post, believe me you will be a millionaire yourself and would be thanking me.