Have you ever sat down after a hard day’s work and thought about what you would do after striking your first million? This level of financial prosperity can seem more like a pipe dream than an actual possibility. But then you hear stories of self-made millionaires and how they climbed their way to financial freedom after years of hard work and discipline.
The truth is that you shouldn’t compare yourself to successful people because your path to financial independence won’t look like theirs. However, you can apply the same principles as a self-made millionaire and pioneer your own path.
In this article, we’ll discuss common hurdles you’ll face when trying to achieve financial independence, characteristics of self-made millionaires (and billionaires), and the various methods you can employ to make your first million dollars a reality.
Common obstacles preventing you from saving money
The first step to improving your finances is to save more. This sounds simple, but many people struggle to put away money every month for one reason or another. Here are four common obstacles that might be keeping you from saving and what you can do to improve:
You might lack financial literacy that you need to save money and increase your wealth
A lot of us are only familiar with basic financial concepts, such as savings, debt, and retirement funds. But part of building up your finances is learning more about how money works. To get more familiar with finances, start listening to the experts. You can start by reading Carl Richards’ “The One-Page Financial Plan” or checking out some personal finance podcasts.
You aren’t properly budgeting your income
According to a 2019 Bank Rate study, 51% of adults said they weren’t budgeting. A budget is essential if you want to start saving money, as it gives you an idea of how much you can spend and where. By creating a budget, you also force yourself to pay attention to how you spend your money.
You’re up to your eyeballs in debt
The average U.S. adult has $29,800 in personal debt, and more than one-third of their income goes towards paying off debt. Many can attribute that debt to student loans or credit card debt. As such, it may benefit you to refinance your loans so you can work towards paying them off without crippling yourself financially month after month.
You spend too much
Overspending seems fun when you’re doing it, which is why it’s so easy to fall into this trap. In general, if you’re spending more than 30% of your income on your wants (shopping, dining out, etc.) rather than necessities such as rent, then you should scale back to save more.
5 Characteristics and Habits of Self-Made Millionaires
Rich people don’t make a million dollars and then stop. They’ve developed characteristics and habits over time that enable them to generate wealth for years to come. You can train yourself to embody these same principles, but it takes time.
Below is a list of five key characteristics and habits — with examples — of self-made millionaires that you can look to for inspiration.
1. Pay yourself first
In the spirit of saving money, the first principle of building wealth is to “pay yourself first.” These words come straight from Warren Buffett, the investor and self-made billionaire with a net worth of $85.8 billion. His surefire advice to saving money is this: “Don't save what is left after spending; spend what is left after saving.”
2. Work toward creating multiple income streams
Want to see your finances really take off? You should look into diversifying your income by creating multiple income streams. Oprah Winfrey has nine different income streams. She collects profits from her own media conglomerate, books she’s written, work as an actress and producer, and more.
One way to take advantage of this principle early on is to start your own side hustle. Freelance work can turn into stable supplementary income over time, making it a significant way to create a steady income stream.
3. Track all of your expenses
Charlie Ergen, founder of Dish Network, is a billionaire who insists on signing all company checks of $100,000 or more. When he created the company in the ‘80s, he signed every check, no matter the amount. Why? He recognizes the importance of tracking your expenses. It’s the only way to see how and when you spend your money. Keep a spreadsheet of your expenses, logging them each day.
4. Live below your means
It can be difficult to do, but avoid “lifestyle creep” at all costs. Lifestyle creep describes what happens when people come into more money: Their lifestyles grow more extravagant and so does their cost of living.
Mark Cuban, owner of the Dallas Mavericks and billionaire investor, claims that thrifty living opens up more opportunities. Rather than earning a lot and spending lavishly, it’s better to pocket the extra money and invest it, which brings us to the last tip.
5. Invest your savings
Grant Cardone, a self-made millionaire, claims that saving money is pointless. He says the quickest way to multiply your money is to invest it. To quote Cardone directly, here’s what you should do with your cash:
- “Invest in yourself to increase your income”
- “Invest in your business to increase your income”
- “Invest in real assets that produce cash flow”
Now, there’s something to be said for having an emergency fund available to float you if times are tough. But once you’ve amassed enough money to get by safely (i.e., a minimum of 3-6 months of living expenses), it’s wise to research different ways to invest your savings. You could look into buying real estate, investing in a retirement fund, or even using free apps to invest for you.
How you can become a self-made millionaire
As mentioned, the path to becoming wealthy isn’t set in stone. There are many ways to hit that coveted seven-figure benchmark. But there’s an underlying trend at work here: Every single one of the successful people mentioned above eventually started their own business.
Starting a business is a great way to build your wealth — if it’s done right. It’s not a get-rich-quick scheme, and it’s certainly not an overnight endeavor. It carries its share of risks but also a lot of advantages, including:
- Building a project from the ground up: The most beautiful part of running a business is watching it grow. When you start from the ground up, you can watch your business expand with a smile on your face.
- The chance to do higher-level work: If you’ve been stuck in a role doing “grunt work” your whole life, you can kiss those days goodbye. Once your business takes off, you’ll be focusing on strategic tasks, like networking and building your business.
- Autonomy: You can be your own boss and create a work-life balance that suits you. Plus, you get full say over who you hire and how you run things.
Business owners aren’t guaranteed to become millionaires, but you can get there by applying the same financial principles and habits we mentioned earlier. Of course, owning your own business is a big step, but you don’t have to take it alone.
Be your own boss at Main Street
At Main Street, we set you up for success on day one by giving you the support you need to start a profitable painting business. Here’s how we can help get you started on your path to a booming business and financial progress:
- Zero sign-up fees: There are no fees or hidden costs when you sign up for Main Street — guaranteed.
- Training with industry professionals: We link you up with business development coaches who will help you with every step of launching and running your business.
- Company equity: Once you join the Main Street family, you have the opportunity to become a partner. Buy company equity at insider rates so you can enjoy the profit.
To get started on your potential million-dollar-painting business, take our New Owner Program quiz to see if Main Street is a good fit for you.