“How to Make Your First Million”… Sound like the beginning of an infomercial [LOL].
But that’s what we are going to talk about today and here’s why…
About a week or two ago I started posting answers on quora.com just to see how it worked and if I could get some ideas from it.
Yesterday, I had someone request for me to answer his question. His name was Bashar Bashir and this is the question…
How can I earn one million dollars? I started a blog to document every step I’m going to make towards the one million milestone.
How To Make Your First Million Dollars In 4 Simple Steps
First off, congratulations on deciding to get started. I think that’s the hardest part for most people
So your goal is to earn one million dollars and that a great goal…
But just as important as setting a goal and documenting your actions is knowing what resources you already have.
For example, if you make an income over $70k per year, if you have certain skills that will help you boost your income, etc.
Since I don’t know your situation I’ll make a few assumptions that will be based on the average American.
Averageincome of $59,000
- Average savings of $1000 or less
- Average Retirement Account Balance: Between $500 and $32k
- Average monthly expenses: $46k per year
If you have no high value skills to help boost your income and you are simply starting out from square one, which is a job, this is the plan of action I would use to get to one million dollars in cash.
Step 1: Invest in yourself constantly
Step 2: Ruthlessly cut expenses
Step 3: invest 20% of my income in a business or income-producing Real Estate (most likely both)
Step 4: Build my network
I’ll go into a little bit of detail for each of these so you know exactly what I mean…
Step 1: Invest in Yourself Constantly
Earning one million dollars is a goal that many people set for themselves and quite a few people actually succeed at getting it. Two thing that seperates the ones who do from the ones who don’t is mindset and skillset.
Mindset is the most important in my opinion because we tend to seek distractions, lack patience and quit at the first sign of resistance. This is your #1 enemy when it comes to growing your wealth.
Building your emotional toughness is key because you have pre-existing beliefs about money and wealth that are most likely not serving you in reaching your million dollar goal.
You will also need to gain several different skill sets in order to grow your income. Let’s face it, you could save your way to a million but you are going to miss out on life if all you do is skip $5 lattes and go on cheaper vacations.
Improving Your Skill set is vital to reaching your goal. I recommend that everyone learns how to sell because it is the number one skill that can put you in control of your finances.
You have to know how to get money coming in without the need to “sell your life” if you get my drift.
After you learn sales, keep learning. Never stop reading, listening to audiobooks and learning from the people you are confident have actually accomplished what you are setting out to do.
Step 2: Ruthlessly Cut Expenses
I’m going to slightly contradict myself here because in the last section I told you to focus on growing your income so that you can enjoy life.
While I believe it’s important to enjoy the life you live, it’s also important not to be impulsive and wasteful.
As the old saying goes, “Waste not, Want not”.
I use a website called Mint.com to keep an eye on my spending. It’s great because once you link your accounts Mint helps you track your income, expenses and even your net worth. It’s a great tool for people who want to keep things simple.
Once you have your Mint account set up, all you have to do is check your expenses regularly, whether you choose to check it weekly or monthly is up to you.
What I suggest is to wait one month and focus on doing the things as you normally would. At the end of the month when you check your Mint account, look over your spending and see where you are spending money that you don’t need to.
For me, it was Gas station snacks and fast food.
The best way to approach this is to think about what you can do instead. For example, instead of getting snacks and fast food I try to leave home with a snack and a drink.
I only cut wasteful spending, not the fun. My girlfriend and I still enjoy going out to eat and dates but we do not waste money buying things we don’t need.
You can also cut subscription services. For example, instead of buying the cable bundle from our service provider, we just bought high speed internet and we use Netflix to watch movies and shows.
Step 3: Invest 20% in Business/ Real Estate
This is where the rubber meets the road. Investing in starting a business or income producing real estate helps you increase your income.
If your goal is to earn one million dollars, as I said before you want to focus on increasing your income without having to “sell your life”
Starting a business is a very stressful thought for some but to be honest, it doesn’t have to be. Starting a business in 2018 is probably as easy as it has ever been because of how much technology there is to help you run your business from home.
My suggestion is that you start with affiliate marketing, which is a way to get paid to promote other peoples products.
Also, investing in income producing real estate is highly valuable because it helps you build your net worth as well as your income.
However, investing in real estate is a much scarier thing for many people because of the fact that you are dealing with debt and large purchases before any money can be made.
But if you are willing to do what I said in Step 1 and invest in yourself, you will discover that there are many different strategies you can use to lower your risk when investing in income producing property.
Income producing real estate is something that I kind of lucked into using the law of attraction. If I knew what I was doing, I would have bought multifamily instead of single family
My suggestion is that you check out BiggerPockets.com. BiggerPockets is a great place to learn about investing in real estate in a way that helps you avoid making risky investments.
You can also use it to build your network, which is Step 4:
Step 4: Build Your Network
Making money is a game. In fact, if it was a video game it would be MMO, massive multiplayer online game.
To break it down as simply as possible, your network is made out of people, people earn money, people spend money. Your goal is to find people who want what you are selling or investing in and offer it to them in exchange for money.
Sound rediculously easy, right?
It’s because it is… but it takes a lot of time, and consistency.
As I said before, we tend to seek distractions and quit at the first sign of resistence. Networking is a skill and in order to grow your network you have to learn how to do 3 things:
- Get in front of a ton of different people
- Find out what they are doing
- Offer to help if you can
This has to be strategic or you will waste lots of time meeting people who you can’t help and who can’t help you.
The secret is to use a tool like Meetup.com to find groups who meet in your area or an area you wouldn’t mind going to and start attending.
Once you get there, talk to strangers! LOL, seriously, you have to talk to people. Find out what they do, what they are working on and who their ideal client is.
Focus on them…
FOCUS ON THEM!!! (this is major)
Once you have learned all about them and what they are doing, you will be able to tell if you have a skill set that can help them and if they can help you.
If you can help them, offer to help. Even if they can’t personally help you in return they may know someone who can.
Once you have built a relationship with a large group of people, check in with them from time to time, ask how they thing that you helped with is going, and ask who they know that you can help.
This is building strong bond with your network while also asking for referrals.
If you put all 4 steps together in a way that’s cohesive, then you should be able to get to one million dollars fairly easily.
Now all you have to do is focus on the numbers. Are you going to sell something for $2,000, $20,000 or $200,000?
It’s up to you but if you use these price points as an example then this would be how you approach your goal.
If you sell a $2,000 product you need to sell 500
If you sell a $20,000 product you need to sell 50
If you sell a $200,000 product you only need to sell 5
Bonus: If you want to make a million dollars per year then this is how the numbers would work…
You would need to make roughly $83,334 per month which is 19,380 per week which is $2770 per day.
If you only sell 100 people on a monthly subscription service then you need to make $834 per month
If you only sell 1000 people on a monthly subscription you only need to charge $84 per month
If you get 2000 thats only $42 per month
That probably sound every simple but think about this,
Netflix, a service that I use and get lots of value from, started out charging around $9 per month. Today it’s somewhere around $15.
Today netflix has 100 million subscribers! But, starting out, your are obviously not going to be netflix…
So lets say that you are really committed and you decide to go after 10,000 subscribers. In that case you would only need to charge $8.34 per month to make one million dollars.
Let me ask you this… Even if you have very little skill at selling, do you think you could sell a monthly service for just $8.34 per month?
To make $1,000,000 in cash you need to focus on doing a very simple few things. They are:
- Invest in Yourself
- Cut Expenses
- Invest for Income
If you do these 4 things habitually then you will become a very financially secure person. The key is dedication and staying focused taking the steps.