According to a recent Insider article, there are about 3,000 billionaires in the world. Want to join this elite club? If you’re like most billionaires, you’ll have to earn it. Indeed, most billionaires are self-made. They’ve worked hard, invested wisely, had a bit of luck, seized opportunities, sought deals and chosen their life-partners carefully.
Are you a millionaire? Then you too can become a billionaire.
Power of compounding
Your money should be working hard for you. That means investing in your business, creating new businesses, stocks and real estate. You’ll want to buy the stock of a few great companies at decent prices or invest in index mutual funds. Rental or commercial real estate properties, purchased at or below fair value and managed prudently, can provide generous income, potential capital appreciation and offset income. You can start small. Consider buying a duplex, living in one unit and renting out the other. Or perhaps buying a one bedroom condominium. And, don’t be an absentee landlord. You’ll need to take an active role to ensure your success.
Get and stay fit
Not only will a healthy body help keep your mind sharp, you’ll be better able to deal with stress and improve your overall quality of life. And don’t forget about eating well.
Be a go-getter
Go after your dreams with gusto. Success won’t just come your way. You’ve got to make it happen. And that may mean knocking on a lot of doors. And knocking again. Try not to take rejection personally. It’s a numbers game. You need to keep trying until you succeed. There are countless stories of eminently successful people that have endured hundreds of rejections before getting to “yes.”
Do your best to work hard and exceed expectations. Be known as the person that goes above and beyond and always delivers on time.
Spend your money wisely
It’s easy to spend money. Ask Michael Jackson. Buy things only when you need them, not before. Make an important distinction between things you need versus things you want. The longer you wait to spend your money, the more time it’ll have to grow.
Protect yourself
Insure your home and rental properties for their replacement cost and your personal liability. Higher deductibles will lower your rates. You’ll want to revisit your coverage each year to ensure it keeps up with inflation and your changing personal situation. Consider purchasing an “umbrella” policy as your wealth increases to cover any personal liability not covered by your existing policies.
Avoid taxes legally
Take advantage of the tax laws to defer and reduce taxes. Don’t participate in any tax dodges. You could end up owing the back taxes, interest and penalties. It could even land you in jail. File your taxes using a tax-return software like Turbo-Tax. The deluxe version works well for business and property owners. It will walk you through all but the most complex returns. Consider setting up your own 401(k) retirement plan, contributing to a Roth IRA, investing in tax-efficient index funds and tax-free municipal bonds.
Be a smart investor
Invest wisely. Warren Buffett became the richest man in the world, in large part, by buying the stock of a few great companies at depressed prices. Don’t invest in “hot tips” from your friends or “turnaround” situations. They rarely, if ever pan out. Use discount brokers for stocks and buy no-load index mutual funds.
Turn your smart idea into a money-making business
You can create substantial personal wealth by doing what you love. Getting started is easy. Need some help? Surround yourself with knowledgeable, trustworthy people. There are plenty of “how-to” books available at your local library or booksellers like Amazon. If you feel the need, hire an attorney or work with a partner. But be careful.
Choose your life partner carefully
Living with a loving partner can help fulfill and extend your life. Divorce is bad for your wealth. Lawyer costs, alimony, child support and the division of your estate could cost you “big time.” Let alone the long-lasting negative effects such acrimony can have your kids. Divorce is likely to be lot harder on them than it is you.
Shop for value
Don’t be afraid to ask for a deal. If the product is opened or you’re buying in large quantities or spending a lot, ask if they’ll reduce the price by 10% You can also buy a floor model. While it may be a little beat up, it will usually come with the same warranty as a new one.
Use debt prudently
Debt is not inherently bad. You just need to be careful to borrow for the right reasons and not get in over your head. Corporate and bank loans can be used to continue to build wealth.
Good Luck!