Key Steps To Take To Become A Self-Made Millionaire

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Ask any millionaire how they got their wealth you’ll either hear two stories. Generally speaking, those stories revolve around them not starting out rich and becoming rich through a series of events, or they were given their wealth. But even when you get those, most tend to say that they worked harder or they had put some money in investments.

But the reality there is more to it than that. There is a lot that we can learn from those who had small incomes and grew them substantially. Because it’s more than making smart decisions. There’s dedication to climbing out of debt and continuing to grow that skill that earned them the wealth to do that.

As Grant Cardone, a New York Times best-selling author, explained once, he avoided luxury watches and cars up until he had the funds secure from multiple investments and when he was financially safe.

Looking into Cardone’s life, we’ll find that he dropped out of college at 21, and went off to make a business. He was broke and in massive debt and he hated it. But with this business, he spent his entire days fighting his way out and used money wisely. By the time he turned 30, he hit millionaire status.

His example shows the daily decisions that we take or how we spend our money now makes a massive impact over time. In the end, becoming wealthy comes down to personal habits that we have. And these habits are the steps we need to take in order to become millionaires.

And before we get into the steps specifically, I want to give you an example and show that our decisions do affect our wealth.

Say you’re 25 years old, and every two weeks you take $100 out of your bi-weekly pay cheque and put that into a savings account. You do this until you are 65 years old. By the time you hit 65, you’d end up with $415,000, assuming that the market yield was 6% from year to year.

Now imagine if we changed that $100 to $200.

If everything stays the same, you’d actually end up with over $1,000,000 by the end! If that idea excites you, then let me tell you about the steps.

After all, it’s not all about investing and saving. Being a millionaire is about smart spending and there’s a difference.

 

Pay Yourself First

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We’ve all got bills we need to pay for our heating, internet, phone, and credit cards, but when was the last time you paid yourself? The first step to being a millionaire is actually setting up automatic payments to your savings account. And if you don’t have a savings account – it’s smart to get one right now.

The idea with this step is to figure out how much money you can actually get away with putting in your savings account from week to week or month to month. You’ll need to consider all your expenses and then add in how much money you want to put into savings. Generally speaking, most people can probably manage $25 a week. And that’s a pretty solid base.

By the end of the year – thanks to compound interest – you’ll be resting on $1,300.

On top of this, you want to make this process as seamless as possible, so make sure you set up automatic payments for this. That way, at the end of every week, you won’t even have to think about it.

 

 

Pay Credit Cards Off

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Second step is to knock out any kind of debts that you’ve got hanging around. For many, their biggest debts are credit cards and they are by far the worst. Interest rates working against you are the biggest contributors to killing your wealth goals. But credit cards specifically are particularly ruthless – especially when you have multiple credit card debts. Your first goal is to work on paying off at least one card at a time. Once that is done, cancel the card and cut it up until you have only one card left. Credit card debt is bad, but credit cards are still helpful when you know how to use them.

And if you are struggling to pay down the entire card, then consider this next step.

 

 

Negotiate Credit Card Interest Rates

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If you’re only making partial payments back on your credit card debt, then chances are a lot that money is going right to the interest, rather than the actual principal amount. One realistic example to put this in perspective is say you owe $5,000 on your credit card. It’s not out of the ordinary for credit cards to charge interest rates of 18% APR (yearly-interest rate). What this means is that over the course of the year, you’ll be charged an extra $900 just because you owe that much money!

The good news is that credit card companies are not entirely bad and they actually reward people who make regular payments. These rewards typically come in the form of lower interest rates. They’re not going to outright tell you though, so you’ll need to call them up and explain your situation. It never hurts to ask. Despite all of that though, if they do say no, there’s something else you can do.

 

 

Transfer Balances

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No, it’s not yelling at them until you get what you want. It’s transferring balances. Even if your bank doesn’t want to give you lower rates, you still have the right to transfer the balances. It is your money after all, and you’re free to move balances owed to new cards or a new bank that’s willing to offer you lower rates. Best of all there are banks that offer balance transfer cards that charge you no interest at all for a certain period of time. On top of that, some banks don’t even have bank fees too!

These are great ways of getting ahead, but one other good thing to do before deciding on the transfer is to look into debt consolidation loans. Typically, these loans will charge much lower interest rates than what you’ll find on credit cards.

With credit cards all sorted you’re next thing to tackle is…