My friend Josh and I finished our collage together. Even though we worked at different places, our income and designation were more or less similar. Last year he became a millionaire at the age of 29!
Let me start by asking you this question: Is becoming a millionaire unachievable? The simple answer to this question is no, not indeed. Currently, 51.1 million people are millionaires, which is more than 1% of adults in the global population, according to Moneyzane. Interestingly, roughly half of them live in the U.S. Trust me, not all of them won the lottery or were born with a silver spoon. A study published in 2019 by Wealth-X states that 68% of them with a net worth of more than or equal to $30 million are self-made.
Even though becoming a millionaire is an achievable dream many of us share, it can be challenging if you weren’t born with wealth. Becoming one requires long-term financial planning, hard work, and patience.
So, I asked my ever-longing friend ChatGPT how to become a millionaire like my friend Josh instead of eating Cheetos and watching Netflix all day, and here’s the answer I received. I’ll explain them and relate my observation as well.
Let’s get started.
Gain expertise in a high-demand area
The first recommendation by the AI tool is to develop a high-income skill or start a business, and I couldn’t agree more. And it’s common sense that, in today’s era, if you don’t offer high skills that people are happy to pay for, it’s going to be tough to become wealthy with your day-to-day monotonous job. The key lesson here is to provide solutions to specific problems. For example, can you develop an app that could solve particular problems like wedding management? or can you sell a specific product in a nonexistent demand market? Can you protect a company from potential threats?
If you think you need to polish your skillset, do it as soon as possible. If you’re capable, the next step will be to develop a business model around your skill. You can create a popular app that makes revenue by monetizing it properly. Business and investments are the only forms of earnings that could boost your wealth like anything else unless you are the CEO of a big company like Google.
Live below your means
Many people have this misconception: living below your means is leading a rigid life, sacrificing enjoying things you love. But in real life, that’s not the case, and it’s also not practical. Let’s get honest; we’re developers and crave Cheetos and beer every hour. What will you do with all the money in your bank account?
Living below your means is spending below your earnings. Considering the recession, price hikes, and job cuts, it has become more necessary now than ever. So what can you do?
I’ll share a few tips that I started following, and It’s been helping me big time. First, you need to make a budget and try to stay within it. It’ll be challenging, and you probably won’t be able to follow it thoroughly, but that’s okay. Few dollars can be here and there. It’s fine. Do it for one month, and list down all your spending.
After that, you need to identify things you would be better off spending on and follow it in the next month. You’ll see soon you aren’t spending on overpriced fancy clothes, club memberships, food, and drinks. But don’t get too harsh on yourself. Treat yourself at least twice a month by watching a movie, eating at a fancy restaurant, or whatever your heart desires. Don’t kill your soul.
Another crucial thing is to avoid being in debt with high interest. Speaking of interest, try to avoid credit cards as much as possible. Credit cards provoke you to make big purchases, and you pay a large sum of interest.
Invest your time and money wisely.
Now that you’ve managed to save some money, what can you do with it? Idle cash has a negative value in your life. You’re spending your money without even spending it. Let me explain how. Your money is losing its value every day.
Your $100 bill will be able to buy $90 worth of goods in 2024.
That’s how economics works. Money depreciates over time. The best thing you can do is either invest in your own business or invest in a diversified portfolio. Let me guide you through this.
Before investing in something, first, realize your risk tolerance level. If you’re in your 20s or 30s, there’s nothing wrong with taking risks. But you should play it a little safe if you’re in your 40s or above. However, investing in a diversified portfolio is essential. Gather proper knowledge about investing before getting into the field.
Whether playing it risky or safe, you should start investing small as it’s a whole new world if you’re unfamiliar with it, and it can get overwhelming. As you gain experience, you invest more. Starting small can make a night and day difference in the long run. The next step is diversifying your portfolio with bonds, stocks, mutual funds, options, real estate, etc. The last piece of advice is, please don’t rely on ChatGPT for investment purposes. It isn’t that great in this sector yet. Consult with a financial advisor if possible, or if you have a friend like Josh, that’s great.
As a developer, you might not be interested in all those finance mumbo jumbo; then it’s best to try to get a job at a big successful company. What do you get paid for in a full-time job? It’s for your time rather than your skill. So, invest it wisely. These companies pay a lot to their senior employees and offer stocks as well. Those stocks eventually become worth millions of dollars.
Stay focused and committed.
Well, it’s a lot, I get it. Your job, business, investment, and so on can be intimidating. But you want to be a millionaire, isn’t it? There’s no other option available other than staying focused and committed to things you’re doing. Consistency is better than motivation. Motivation is like caffeine. It wears off quickly, and you’ll need it again and again. On the other hand, consistency leads to momentum, and eventually, it becomes your habit. I’ll share some techniques I follow-
Set your goals and priorities first. Eliminate trivial stuff that hinders your work or getting done with them as soon as possible. Another technique I’ve found quite helpful is finishing all the small things that can be done within 2 minutes before doing some big tasks.
For example, maybe you need to reply to a mail or do some chores that have been a pain in the a**. First, finish them off. It helps you to concentrate on more significant tasks.
My friend Josh follows the Pomodoro technique, which means you schedule your tasks for 25 or 30 minutes, then take a break for 5 to 10 minutes and repeat the cycle. It’s no help for me as once you start doing the work after 5 minutes break, your brains need a couple of minutes to concentrate fully on it, and before your brain gets sunk into the work, it’s break time! But you can follow it if it works for you.
Another thing you can do is, break down your work into smaller pieces. The workload can be handled better this way. And remember to take care of your health, as your million dollars is worth nothing if you’re unhealthy. If everything becomes too stressful, grab your backpack and leave for a new place for a couple of days. Take a break. You’re a human being, not ChatGPT.
Be patient and build a strong network.
Making millions isn’t easy. The faster you realize it, the better. Let’s do a quick math, shall we? If you save $3000 monthly and get a 15% compound return, it’ll take roughly ten years to become a millionaire.
So, making money or saving it is a long journey that takes endless patience and discipline. Hold tight during the period.
Meanwhile, you keep on developing a solid network around you. Attend as many industry events as possible. In this manner, you’ll get to know new development in the industry. Online communities like Reddit, Facebook, Stack Overflow, and GitHub can be great places to share your knowledge and learning. Another thing you could do is, participate in open-source projects. It connects you with other developers and builds your reputation.
Another little advice is, don’t fall for the end result like a three-year-old baby. Try to enjoy the process of making and saving money.
Best of Luck!