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8 Things That Keep You From Becoming a Millionaire

8 Things That Keep You From Becoming a Millionaire

Not everyone is destined to become a millionaire. In fact, nobody is destined to become anything at all. A person’s potential for success may begin with the circumstances into which they were born, but whether or not they actually become successful depends on the choices they make and the life they choose to live. Although it may be more difficult for some than it is for others to become wealthy beyond their wildest dreams, it is certainly possible for all of us to, at the very least, live in such a way that maximizes our potential for success. Those who want to see dollar signs in their future should avoid the following:

1. Lack of purpose

Every single rich person in the world wakes up knowing exactly why they’re getting out of bed in the morning. Too many of us go to bed at night having not accomplished anything during their waking hours, simply because they didn’t see a purpose for doing anything at all. This sense of purpose must come from within. If after being diagnosed with terminal cancer, Steve Jobs stopped working and took on a depressing, “What’s the point?” persona, you wouldn’t be holding the iPhone you’re probably reading this on.

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2. Lack of ambition

Along with a sense of purpose, you also need to have ambition. The truth is, even if you know your purpose in life, there are seven billion people in the world. It’s more than likely others have the same purpose as well. You need to separate yourself from the pack by being more ambitious than your competitors. Be the one that knows what they want, and knows how to get it. Otherwise, you’re just another pipe dreamer who believes success should just be doled out to anyone regardless of how hard they’ve worked for it.

3. Not being a life-long learner

Learning doesn’t end once you graduate from high school or college. Or at least it shouldn’t. Think of all the advancements in technology we’ve had since you were a high school student. Now imagine where we’ll be in another twenty years. Do you really want to write all of these advancements off because you don’t want to learn something new? Especially at a time in which it’s incredibly easy to pick up a handheld device and read almost every single piece of information ever known to humanity, shunning learning will only further the divide between your current self and your potential.

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4. Lack of self-discipline

Even if you love to learn, you know what you want to do, and you know how to do it, you still need to be self-disciplined in order to find true success. Most self-made millionaires practice discipline in all aspects of their lives. They eat healthy, they don’t live above their means, they exercise diligently, and they put their all into everything they do. They understand the long-lasting detrimental effects that compromising their self-discipline can have, so they continue on the straight and narrow path every day of their life.

5. Procrastination

People procrastinate when they’re afraid their hard work will not pay off, or they’re afraid they’re not good enough to complete a task efficiently. Successful millionaires are completely confident in their ability to get things done, and they also know that if they put a task off it’ll still be there tomorrow morning, and there will be less time to do it in. And, of course, other tasks will have piled up during the time that was wasted avoiding the original task. Avoid becoming overwhelmed by using every waking moment to your advantage.

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6. Lack of persistence

Pink Floyd says it best:

“Run, rabbit run.
Dig that hole, forget the sun,
And when at last the work is done,
Don’t sit down, it’s time to dig another one.”

In other words, your work is never truly done. Tasks will continue to pile up whether you choose to complete them or not. Putting your feet up will only cause you to be overwhelmed in the future. Successful millionaires understand this, which is why they never truly leave work behind. They might take lavish vacations and eat at fancy restaurants, but they always have their phone close by in case something comes up that requires their immediate attention. Just because you did a good job today doesn’t mean you can slack off tomorrow and expect the same results.

7. Toxic friends

Friends can either help build you up or they can absolutely tear you apart. If you find yourself surrounded by naysayers who have no ambition in their lives other than to keep others down, you need to ditch them immediately. They may be fun to be around at times, but they serve no purpose in your life if your goal is to become a success. On the other hand, surrounding yourself with people who are more successful than you gives you ambition to do better each and every day. When you set out on your life’s path, take care in who you bring along with you.

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8. Unfulfilling jobs

So many of us are stuck in dead-end jobs that only serve to make ends meet. You might think to yourself “this is only temporary” at first, but then one year becomes two, then two becomes five, and the next thing you know you’ve missed your opportunity to move on. Don’t let it happen. You might face a financial setback initially, but in the long run you’ll be much happier, and you’ll feel much more confident on your pathway to becoming a success.

Featured photo credit: Flickr via farm3.staticflickr.com

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Published on May 7, 2019

How to Invest for Retirement (The Smart and Stress-Free Way)

How to Invest for Retirement (The Smart and Stress-Free Way)

When it comes to stocks, I bet you feel like you have no idea what you’re doing.

Everyone who’s not a financial expert has been there. I’ve been there. But, time is passing and you need to be crystal clear with how you’re investing for your retirement.

Otherwise, it’s back to work until you can afford not to. So, how can you invest for retirement when you’re not a financial expert?

You take the time to learn the fundamentals well. If you do, you can grow your wealth and retire happy. The best part is that you don’t need to be a financial expert to make smart investment decisions.

Here’s how to invest for retirement the smart and stress-free way:

1. Know Clearly Why You Invest

Odds are you already know why should invest for retirement.

But, maybe you know the wrong reasons. It’s time you get clear on why you’d like to retire. Here are some questions to help you get started:

  • Will you spend more time with your family?
  • What does retirement mean to you?
  • Are you looking to launch that business you’ve been holding off for years?

Everyone wants to retire but not for the same reasons. Once you’re clear for why retirement is important for you, you’ll focus on making it happen.

Investing in the stock market allows you to take advantage of compound interest.[1] All this means is that your money earns money on top of its interest. A reason why investment in the stock market is one of the best ways to plan for retirement.

2. Figure out When to Invest

“The best time to plant a tree was 20 years ago. The second best time is now.”– Chinese Proverb

It’s true if you’d had started investing when you were 10 years old, you’d have a lot more money than you do today.

The reality is that most people don’t start investing until it’s too late. So, if you’re currently waiting for the perfect time to start an investment, it would be today. Open your calendar and block out 2 to 3 hours to choose how you’ll invest for retirement.

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A quick way to get a snapshot of where you stand is to use Personal Capital. Input all your personal information and spend some time setting your retirement goals. Once completed, you’ll know where you stand with your retirement.

Having a savings account for retirement isn’t planning for retirement. Why? Your money loses value when you factor in US inflation.[2]

3. Evaluate Your Risk Tolerance to Create the Perfect Portfolio

Investing your money well depends on your emotions.

Why?

Because when the market drops most people panic and withdraw their money. On average, the US stock market yields an annual 6% to 7% ROI (return on your investment.) But, this won’t happen if you’re worried about short-term loses.

Before you invest your next dollar, know your risk tolerance.[3] Your risk tolerance determines the number of risky and safe investments you’d have.

Regardless of your investing style, you need to view investing for retirement as a long term game. Know that some years you’ll lose money but recoup this in the long-term.

Avoid watching market-related new. Also, create a double authentication to log in your investment account. This way you’re less likely to withdraw your money.

4. Open a Reliable Retirement Account

Depending on your circumstance, you may need to open a new brokerage account. This is the account is where you’ll invest your money.

If you’re currently working for a company, odds are that they offer a 410K investing account. If so, here’s where you’ll invest most of your money. The only problem with this is that you’re limited to the stock options that are available.

You do have the option to open a separate IRA (individual retirement account.) Here are some of the best brokers:

  1. Vanguard
  2. TD Ameritrade
  3. Charles Schwab

5. Challenge Yourself to Invest Consistently

Committing to invest for retirement is hard, but continuing to do so is harder.

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Once you’ve started investment for your retirement, you run at risk from stopping. Often you’ll want to contribute less, so you’d have more money in your pocket.

That’s why it’s important that you create a budget that allows you to invest each month. If you’re working for a company, you can set a percentage for the amount you’d like to contribute each month. Most people by default contribute 1% but aim to contribute 10% to 15%.

Be the judge for how much you can afford to contribute after covering important expenses. To stay motivated, use Personal Capital to view your net worth.

A benefit to contributing money to your retirement account is not taxed. For example, if you earn $100 and invest 10%, you’d contribute $10, then get taxed on the remaining $90. As of 2019, the most you’re able to contribute towards your 401K is 19K but this can change.

6. Consider Where to Invest Your Money

The most common way to invest your money is in stocks, but it’s not the only way. Here are other ways to invest:

Robo Advisors

Robo-advisors[4] are fancy algorithms that’ll choose the best investments for you. Sites like Wealthfront make it easy for first-time investors to invest their money. You’d input information about yourself and set your risk tolerance.

Then, set your monthly contribution amount and your robo-advisor would do the rest. Robo-advisors charge a fee to manage your money, but less than regular advisors.

Bonds

Think of bonds as “IOUs” to whomever you buy them from.

Essentially, you’re lending money and charging interest. Like stocks, not all bonds are equal. Some will be riskier than others depending on their rating.

Here are the different types of bond categories:[5]

  1. Treasury bonds
  2. Government bonds
  3. Corporate bonds
  4. Foreign bonds
  5. Mortgage-backed bonds
  6. Municipal bonds

Mutual Funds

Picture a group of people dumping all their money in a jar that’s managed by a professional. This is how mutual funds work. The fund manager manages the money looking to earn capital gains (interest.)

One of the best types of mutual funds is index funds. Since these funds don’t try to beat the market and instead follow it, they need less research. Because of this they often charge the lowest fees and yield the best long-term results.

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Real Estate

Yes, buying a home is an investment when done correctly.

Imagine buying a home and using it as a rental property. After repairing it, you receive a monthly surplus check of $100 to $200.

This may not sound like a lot, but repeat this process enough times and you’d earn a large amount of passive income. That’s why real estate is one of the best investments to not only retire but become wealthy.

But, it requires a lot of money to start and you should expect losing money along the way as you learn the process.

Savings Accounts

Your money can still grow in a savings account. Nowadays most online banks offer a 2% annual return. Although the average inflation is higher your money will be available when you need it.

7. Master Disincline to Dodge Short Success

Investing for retirement is a long-term strategy. That’s why you need to master delayed gratification. All this means is delaying short-term pleasure for something bigger in the future. Research shows that those who have delayed gratification are more successful.[6]

So how can you master delayed gratification?

By building your discipline.

Think back to what retirement means to you. A clear purpose will help you avoid withdrawing your money during a market downturn. It’ll help you contribute more towards retirement when you’d want to waste it instead.

Your journey towards retirement will be long, so reward yourself along the way. Choose a reward that’s relevant and meaningful, so that you reinforce positive behavior. For example, after contributing more towards retirement, treat yourself to dinner.

8. Aggressively Invest on This One Investment

I’ve mentioned several types of investments but haven’t covered the most important one.

It sounds cliche but here’s why you’re your best investment towards retirement. The more you know, the more money you’ll be able to make. The more good habits you adopt, the more secure your retirement will be.

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More importantly, investing in yourself is an investment that no one can take away. There’s no market downturn nor tragic circumstance that’ll wipe your knowledge and experience.

But, how can you invest yourself?

Reading books, blogs, and anything that’ll help you learn new topics daily. Listen to podcasts and audiobooks on your commute to/from work.

Save money to buy courses and hire coaches. I used to believe hiring coaches was a waste of money when I could learn the subject alone.

But, coaches see your blind spots and hold you accountable. Hiring the right coach will help you achieve your goals faster than you would’ve alone.

Retire Happy with Excess Money

The key to a secure financial future doesn’t only belong to financial experts.

It’s possible for you and I. What if you were able to retire earlier than most people and weren’t a financial planner? What if you were able to focus on what you enjoy doing the most while your money was working hard for you?

I know this sounds impossible now, but the truth is you’re capable of taking charge of your retirement. I’m not a financial expert but I’ve learned how to invest my money by reading books and learning from others.

Investing your money is scary. So start small and invest a small amount of your money with a robo-advisor. Feel your money drop and rise for a month or two. Then, invest more and keep this up until you’re aggressively saving for retirement.

One day, you’ll wake up with a net worth you’re proud of – confident about your retirement. You now know a few strategies you can use to invest in your retirement. Will you take action to retire happy?

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Featured photo credit: Matthew Bennett via unsplash.com

Reference

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