Scrooge McDuck swimming the backstroke across a sea of gold coins – your vision of a millionaire? The reality is that most millionaires have built their wealth through perseverance and hard work. Credit Suisse defines “millionaire” as someone with a net worth of at least $1 million. Using this definition, there are 28.6 million millionaires on the planet (World Wealth Report, Peterson). If you’d like to see how close you are to becoming a millionaire, figure your net worth by adding the value of your assets:
- Home, its furnishings
- Bank accounts and investments.
After you have a sum total, subtract your liabilities (the balance of mortgage, car loans, credit card balances and other outstanding debts). What’s left is your net worth. Here is an online calculator to simplify the math. According to Thomas J. Stanley, author of “The Millionaire Mind” and “The Millionaire Next Door,” a good way to determine what your net worth is to multiply your age by your annual income (all sources) and then divide by 10.
Not a millionaire yet? No worries, making smart financial decisions and following a roadmap with key strategies make it possible to become one. You can use an online calculator (such as CNN Money or Bankrate) to determine how much you need to save each month in order to have a million dollars by a specific age. These online calculators also tell you how much that million will actually be worth by the time you have it. To get to your financial goal for retirement, you can use an online retirement calculator (such as the MSN Money) and by plugging in your current expenses and an estimate of your expenses once you retire, you can get a realistic financial goal for retirement.
The majority of self-made millionaires gained their financial freedom not just from one great business idea, but from several businesses. Innovative solutions, products or the “forgotten old” – if you are fit for it, entrepreneurship will produce income streams.
But no one wants to wait until retirement to have financial freedom and not everyone is ready to bet everything and start a company, so here are some tips on how to get other income streams to help you get to your financial goal. Start saving and investing early – get savings account, take advantage of your 401(k) and don’t be afraid to invest – not just in stocks. Today, with FinTech revolution opening new opportunities to use your money at a comfortable risk level. There are lending platforms (P2P and P2B), real estate investment and business crowdfunding platforms with equity, debt, revenue-sharing approach. They all provide information on how to get started and there are discussion groups to exchange tips – so don’t be shy!
Here are some articles to help you learn more on personal finance:
- How Stocks and the Stock Market Work
- How Banks Work
- How Currency Works
- How 401(k) Plans Work
- How 529 Plans Work
- How Investment Scams Work
- How Employee Compensation Works
- How the Lottery Works