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Accumulating wealth in the modern economy is difficult. This is especially true when you have a net worth of under $100k. For those with a net worth under $100k, most of your income is spent on daily essentials such as food, clothing and housing.
No matter how much “gurus” tell you to invest, the truth is that you don’t have money to invest. It’s not a matter of bad decision-making; it’s a matter of choosing between eating dinner or paying rent.
Despite these challenges, as someone who has gone from $0 to $1M+, I know that there are steps that can be taken even when you have nothing to start your journey toward becoming a millionaire. Today, I want to share those steps I took to help you start or accelerate your own journey to becoming a millionaire.
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1. Mindset
The top reason that people don’t become millionaires is that they don’t believe they can do it and don’t commit to it. No matter where you are in life, there is a path to success if you work to find it. That path might not be simple. It might require you to work three jobs for a few years to save enough to start working and investing in areas with higher returns, but I refuse to believe that there is no path, and if you want to succeed, you need this same belief.
Once you adopt a victim’s mindset and buy into the narrative that you are being held down by people, structures and systems outside of your control, you give yourself an excuse to fail, making it easier to give up.
When I felt like everyone was against me, my mindset was simple. I can’t change anything, I can’t prove them wrong, I can’t make it better for the next person in my position unless I make it. Once I make it, I can help those who are where I was, but until I win in this existing system, I’ll never have a chance to change it.
2. You are the CEO
You are the CEO of your own life. Like a regular business, your life has income, expenses, taxes, etc. You need to treat your finances like a business. Many people understand the idea of profit, revenues, etc., when applied to a business, but when it comes to their own life, they don’t equate salary to revenue; they don’t equate spending to expenses. They view salary as their spending allowance and expenses as their pleasures.
If you want to accumulate wealth, you must run your finances like a business. This doesn’t mean you can’t set some aside for your own enjoyment and entertainment, but expenses should have a purpose. A car can be an investment in yourself; it helps you get to work, but do you need a $25k car to do that, or can a $5k car get the job done?
Another area where this approach works is investing. Once you’ve accumulated enough wealth to invest, most people fall into the trap of investing in a vacuum. This means they “diversify” their investment without considering the rest of their lives. I started my career as a startup founder; this is a high-risk/high-reward career path. To balance this out, I made sure my investment portfolio was overwhelmingly safe, using my investments to hedge against my career path.
Related: 7 Ways to Make Money Quick By Only Investing $1,000
Later, in my 20s, I got a stable job while attending law school. Suddenly, my job was safe, and I was in school for another job that would be safe, so I moved my investments into high-risk/high-reward assets. I knew that even if I lost everything, I had an income coming in and was about to get a degree that would give me higher earning potential moving forward.
Viewing yourself as the CEO of your own life allows you to make career, spending and investment decisions that factor in all aspects of your life. You can do this in a way that no financial advisor (who sees just a small portion of your life) can do.
3. Financial literacy
If you aren’t financially literate, then you will not be able to accumulate wealth. Understanding which debts to pay first (based on the interest being charged), the risk/reward proposition of different assets, how to balance your portfolio, etc, is all a product of financial literacy.
Unfortunately, this is not taught in school. Still, you should use tools like YouTube to gain a basic level of financial literacy before you make any investment decisions, including consulting an “expert,” many of whom make commissions based on selling you financial products.
4. Leverage time
Time is the one asset younger people have that older generations don’t. Whether it’s pursuing an education, leveraging compounding interest or taking a 70hr/week job, there are numerous ways that you can leverage time to convert it into wealth. This is truly the most immediately applicable strategy that anyone in their teens or 20s can use today to start building wealth. While you are free of the obligations of parenting and decades away from retirement, find ways of converting that additional time into money.
