How to become a millionaire

Reading time: 24-31 minutes (6.032 words)

If we ask one hundred random people on the street if they want to be a millionaire, how many would answer “yes”? Probably 99 out of 100. Everybody wants to be a millionaire. But 99 out of 100 will never become a millionaire. Isn’t that strange in a world where there is more money than ever before?

Everybody knows the maths to become a millionaire more or less. If you earn $100,000 a year, you’ll be a millionaire in ten years. But you also need to spend money on living expenses so those ten years turn into twenty years. Most people live their lives based on their income. So once they start earning more money, they also start spending more money on things like:

You probably have an idea of what that lifestyle looks like. So in practise, someone earning $100,000 will actually never become a millionaire because they spend all their money. That big house is not theirs, it’s financed with credit. Even that luxury car might be financed with credit. 

Now let’s fast forward to their pension. They don’t earn $100,000 anymore because they stopped working. What happens to their income? It gets drastically cut. Also, they now depend on government systems to keep them alive. Do you know anybody who accumulated so much money in their lifetime they don’t need any government retirement system or pension to live their lives forever? 

The bottom line of this short story is:

If you spend all your money you won’t become a millionaire.

Another person with the same $100,000 annual income can become a millionaire within twenty years or even sooner. But that person has to make certain choices:

The problem is, you need to give up certain wants. And that is pretty hard to do in the current consumer and heavy spending economy. Actually, it’s inevitable to not spend money. Because, as you learned, that is the only thing that keeps the economy going. If everybody stops spending and only buys the things they need the economy would be destroyed and would never recover. 

You need to realise “they” want you to spend money. Because that is how our economic system works.

You might think:

“But millionaires also spend all their money, right?”

Wrong! How can you become a millionaire if you spend all your money? Millionaires in general don’t buy fancy suits, drive luxury cars, or live in huge houses. That’s what you see on the television or other media but that is not reality at all. Most millionaires are very keen about their finances. They only buy things if their income flow from assets can afford it. Actually, there is a bigger chance your neighbour is a millionaire vs the person that lives in the big house and drives luxury cars.

Just think about it for a second. The person that lives in a big house still needs a mortgage. They simply have a bigger mortgage. They still need to pay for their car just like you do. If two persons both earn $100,000 anually, one spends all his money and the other saves and invests it. You already know who will get their first million.

If you don’t believe this you should read “The millionaire next door”. This is a study done over many decades following many millionaires in the U.S. They go over the details of how much money millionaires spend on things like cars, restaurants, clothes, etc. And the end result will surprise you. 

Millionaires don't spend their money, that's how they became millionairs in the first place!

6.1 Conformity is the mind killer

Why do 99,9% of all people not become a millionaire while they all want to be? Conformity. Did you ever learn in school how the economy works, how to invest money or how to become a millionaire? They don’t teach you that in school because they don’t want you to know. They only want you to become a pawn in the economy so you can pay taxes. The government 100% depends on taxes paid by the working force of the economy: you! The people that make the most money are hardly taxed at all. That’s because they have a business which comes with a lot of tax benefits. 

Conformity means that we follow the rest. We simply follow everybody around us. We all go to school to find a job. So you’ll do just the same. We all retire at seventy and get a pension or some government benefits and so will you. As mentioned before, you already know how you’ll end up later in life. You just have to look at everybody around you. How are the elderly doing? How are their finances? When could they stop working? 

Do you know anyone in your neighbourhood, friends or family that could stop working at age fifty? And how many people do you know that have a job and a paycheck? Do they spend all their money? Or can they retire early?

The first thing you need to do if you want to become a millionaire is stop following the rest. You already learned a thing or two about the maths behind investing and becoming financially independent. Let’s have a look at the recipe to become a millionaire.

6.2 The recipe to become a millionaire

A recipe has a number of ingredients. If you are going to bake a cake, you need certain ingredients. Without these ingredients your cake will fail. Becoming a millionaire works in exactly the same way. What are the ingredients to become a millionaire?

There are a few ways to become a millionaire. I’ll list some common ways and filter out the bad ones:

We can already filter out most of the above:

The simple fact is, for most people this is completely out of their league or based on luck. So we have left:

I discussed living frugally and investing extensively. It comes down to investing an X amount of your paycheck in an index fund for a few decades. Let’s have a look at the maths behind it. There are two variables which determines the outcome:

As you can see you either need a high monthly contribution or a high annual gain (preferably both) to get your first million. Annual long term gains above 7-8% in the stock market are not realistic based on results from the past. The average gain is 7% in the last twenty years and 8% in the last thirty years. So we need to bump up the monthly payments:
 

Even if you put in $2500 every month, it still takes 18 years to get your first million. But after forty years you’ll have almost $6 million. That's because compound interest builds up exponentially over time. 

So you can most likely already determine how many years it will take before you become a millionaire by simply looking at how much monthly contributions you can make. But be aware that you can never miss a payment and can never take something out of your investing account.

This is a pretty easy path to becoming a millionaire. It certainly beats buying a lottery ticket or waiting for an inheritance. If you don’t earn that much money from your job, the chance you become a millionaire this way is probably very small. You can cut costs by spending money on the things you need instead of want. But most people can’t invest $2,500 each month. 

Above calculations are based on zero initial payment. If you have a starting balance of $10,000 and invest it right now the result would be:

Even with a larger initial payment, it will only save you one or two years at max. So you don’t need a big pile of money to get started. In other words, it’s a pretty long and slow path to becoming a millionaire. 

6.2.1 Building a Business

To speed up baking the cake, let's have a look at the main ingredients of building a business. To become a millionaire with a business you need one of the following main ingredients:

If you want to make millions you have to influence millions of people. Actually it is quite simple if you start thinking about it like that. Some examples:

If you have influence on millions of people, you can earn millions. Soccer players (at the highest level) earn millions because they entertain millions of people. Not because being a soccer player is the toughest sport in the world. There are plenty of sports that require you to train just as hard or much harder to be the best. Yet these athletes often don't make millions. Why? Because they don't entertain millions of people.

The women's division of most sports that require strength and endurance earn much less versus their manly counterparts. That’s because women have less strength and endurance and thus their overall performance is less entertaining to watch. For example, even an under 15 boy soccer team beat the elite pro national U.S. women team in soccer. 

The highest paid women's elite soccer player (2022) is Carli Lloyd with $518,000 a year.The highest paid elite men's soccer player today is Kylian Mbappe earning more than $1,000,000 a week.

Let’s have a look at the soccer champions league for women. There were an estimated 3.6 million viewers globally that watched the final this year (2022). The champions league for men had a whopping 318 million viewers globally. That’s 88 times more viewers vs the women's champion’s league. 88 * $518,000 = $45.5 million. So Kylian earns a bit more relative to viewers vs income. But you get the point. There is no way that any woman gets paid $10,000,000 a year based on only 3,6 million viewers. And that's how the law of influence works. The more people you influence, the more money can you potentially earn.

6.2.2 Create value and earn millions

If you provide value to millions of people you will earn millions. However, the fewer people you provide value to the less you will earn.

Think of a local coffee seller who sells the most delicious coffee you have ever had. Perfect taste, wonderful smell, you would like to drink this every day! How many cups of coffee can he sell at most in a day? 100? 200 cups? Let’s say one cup costs $3. Then he can earn up to $600 per day. He needs to sell 200 cups of coffee every day, for four and a half years, to earn one million. Although not impossible, this is not really realistic. In addition, he does not make 100% profit per cup of coffee.

But what if he didn't have one coffee cart but one hundred? $600 x 100 carts = $60,000 per day. Within seventeen days he made a million. Do you see the difference? One coffee seller provides value to at most 200 people per day. 100 sellers offer value to 20,000 people per day. This is the difference between the local coffee shop and Starbucks.

So you also have to look at the scale. Is your business scalable? The local coffee seller with one coffecart can sell a max amount of products a day. So he can influence a max amount of people. This is not scalable. He needs to save up enough money, buy a second cart and hire someone who runs the cart. 

Let's face it. The burgers at Mcdonalds are not the most delicious burgers you've ever eaten. Just like the coffee at Starbucks is not the most delicious coffee you've ever had. They made a concept out of it and this concept sells to billions of people. Besides, what most people don’t know is that Mcdonalds and Starbucks main business is not selling burgers or coffee but owning the best properties of real estate all over the world. Just think about all the exclusive locations where Mcdonalds has a restaurant. 

Another example:

Suppose you want to open a bookstore. When do you reach more people:

1. By starting a bookstore in your hometown
2. By opening an online bookstore

Do you see the difference? A bookstore in your own city is limited to the number of people who walk by your store every day. At most, some people from other states come to take a look. An online bookstore is available to millions of people 24/7. Millions of potential customers versus a few thousand. An online store offers more value than a local store. Think Amazon vs the local store. You have to think about the scale. How many people can you potentially influence?

6.2.3 Create a high value product/service

Another way to become a millionaire is to create a product/service of high value. For example, think about real estate. A few properties of real estate can earn you millions. Real estate is one of the best investments you can make. Real estate can then be rented out to generate a passive income. Especially in a college town, you can make millions because the influx and outflow of new house seekers doesn't stop.

In other words, if you sell a product with a value of $3, you need millions of buyers to become a millionaire. When you sell a product worth $100,000, you need a few hundred buyers to become a millionaire. For example, think of a jeweller selling expensive jewellery.

You probably realised that this path is a lot more difficult. You can’t simply buy some real estate. You need to be creditworthy at least. But also think about high quality workshops or other courses. Some courses or video series out there cost $2,500 or more. That means you only need to sell 400 courses for $2,500 to make a million. 

6.4 Idea and execution, which is more important?

Everyone has ideas. These can be good, bad or mediocre. How often did you have a good idea? Did you actually do something with it? The idea can be good but without proper execution your idea is worth nothing. But how do you know if your idea is good or bad? You can only find out by doing research. Fortunately, there is a phenomenon called the Internet. An inexhaustible source of information. If you want to know if your idea already exists you’ll be able to find it on the Internet.

Execution is the most important thing, and that is precisely the point where many people fail. In fact, most people don't even start with the execution. While their idea can be worth millions. And that is exactly the difference between the people who are millionaires and the people who are not millionaires (but would like to be). They think their idea is not good enough or think it already exists. And the second you have these kinds of thoughts, your mind stops thinking about it automatically because you already closed the question.

In order to find an idea, you just need to look around you. What are people struggling with? What do people hate to do? How can you help other people? How can you entertain other people? Important to understand that it does not matter what you want or like. It’s all about what your potential customers want.

While I mentioned that watching TV is mostly a waste of time, there are actually a few programs that can help you to create a business mindset and how entrepreneurs think. The first must watch show is Shark Tank. And the U.K. variant called Dragons Den. In these shows, current business owners seek an investment for their company from the “sharks”. The sharks consist of multi millionaires and sometimes even billionaires. The sharks will evaluate the business, sales, numbers and of course the product. It’s a very interesting show to watch because you dive deep into the entrepreneurs and investors mindset.  

Another show that is a must watch for any entrepreneur is The Profit. The main star of the show is entrepreneur and multi millionaire Marcus Lemonis. Marcus helps small businesses that are on the verge of bankruptcy to turn things around. Although it must be said that in 2021 several (70) small businesses that aired on The Profit filed a lawsuit against Lemonis. They state that Lemonis deliberately drove many businesses into debt to require them for bargain prices later on. That would be a real deal breaker if it’s true. Anyway, you can watch the show and learn quite a few things about several businesses, how they operate and why they are failing.

6.5 The ultimate desires in life

So what is the best idea for creating a product/service? How do other people do it? How do you know if people have an interest in your product or service? 

There are a number of ultimate desires that humans can’t live without. These desires are programmed into your memory and DNA. You can't live without them and they will automatically be activated when needed. If you know that these ultimate desires exist, it is wise to tune a product or service to them. No human can resist these desires. Can you think of a desire you can't live without?

There are several ultimate desires.  Let’s have a look at a few:

These desires are programmed into your brain. You can't live without them. They are always present, and you can't do anything about it. Or in other words, if you want to make millions, you should choose a product or service that falls into the category of the ultimate desires.

Can you resist your desire for food or drinks?

Everyone in the world must eat and drink, if not you will die. No one can resist the desire to eat or drink. How many products and services can you think of that are related to this? How many different products can you find in the supermarket? Or in the liquor store? The perfect example is Mcdonalds. Mcdonalds has come up with a concept based on the human desire to eat and drink. That it's not the most healthy or delicious food doesn't even matter. Be honest, how often have you been to Mcdonalds or Burger King? How often have you ordered your food online? It’s a multi billion dollar business all around the world.

Would you let your child go to a foreign country without thinking about it?

How many times have your parents asked you if you are okay? How many times have you worried about a loved one or family member? People will do anything to care for or protect their loved ones. How many products and services can you think of that are related to this?

Can you resist your sexual desires?

Do you know anyone who has no desire for sexual intimacy? Sex sells, like crazy! Just look at commercials or advertisements. How about porn websites? Dating sites exist because people have a desire for a partner. Someone to share life with. Someone to experience sexual intimacy with. Human beings have a desire to procreate.

There is a reason why you see beautiful athletes or actors in commercials. They want to make you think you are the same as them. And because actor X is using cologne X, you will buy the same cologne! It’s all marketing.

6.5.1. Selling desires

You can't live without them. They are programmed into your brain and you can't do anything about it. So you are automatically attracted to these desires. Just like you are reading this guide right now. You have a desire to become financially independent or want to be a millionaire. You want to have a good life, right? Do the things you want without having to worry about money. That is simply another desire of well being.

Companies are cleverly capitalising on desires. It is no coincidence that all kinds of products exist that exactly meet your desires. A commercial is not just a commercial. They consciously (for you unconsciously) play on your desires. Each advertisement has the goal of enticing you to buy something. And they have thought about this very carefully. There are hundreds of proven tactics to get people to buy something simply by playing on your desires. If you want to know more about this you should read “Cashvertising”. You can use this to your advantage. Not only for creating your own business and ads but you will also notice how businesses try to trick you into buying product X. A few examples:

Did you ever come to a product page where the page said:

 “Order quickly, there are only 3 left in store!” 

Or something like:

“This offer is only valid for 24 hours! Buy now!”

This is a typical way of making you fear missing out on a “good product”. There are only three left and this offer is only valid for 24 hours so you should buy right now or you’ll miss this one of a lifetime deal!

The reality is that there is much more stock and the offer is certainly not valid for only 24 hours. When you go to the same website again with another browser or other device the countdown timer starts at 24 hours again. Maybe you also attended a live online broadcast where they present a product or service. They have a chat service where supposedly other people that are also watching are typing messages. In reality these are just bots who automatically put very positive messages in the chat. In turn you’ll think “ok, everyone in the chat seems to like the product and they are buying the product. Let’s buy some!”.

That’s how you get tricked into buying things. Making you think the product is scarce or you have a limited offer. But it simply works. You can use these things for your own business to drive more sales. It might look like deception but that is how companies make money. 

The next part may sound a bit controversial and you might not agree. But just look at the bigger picture from a business and financial standpoint.

And to take things a bit further, this is how the world operates. Just like they scared the entire world with covid and you need to take a vaccine otherwise you or your loved ones might die! The reality is that 99.5% of the people who get infected with covid don’t even get sick. And as studies have shown multiple times, a vaccine won’t prevent spreading the virus either. But let’s take a look at the other side of the story. Who benefits most from selling vaccines? Pharmaceutical companies.

Moderna was trading for $18 in 2018 and about $20 in 2020. Suddenly covid was here and the price eventually went up to over $400. They have almost 400 million outstanding shares. The companies' networth grew from $7.2 billion to a whopping $160 billion in just 1.5 years! 

So of course they want to sell you vaccines. It’s literally a multi billion dollar business. Most people have no idea that pharmaceutical companies are all commercial companies. They exist to earn money. Otherwise they would prevent you from getting sick. But they don’t prevent anything, they just help you once you get sick. That’s the real business model. If nobody gets sick anymore they would go out of business anytime soon. Just look at the real reason why things are what they are. If there is something going on in the world that affects billions of people, who exactly benefits from that? 

Did you know that not even 10% of all the people in Africa are fully vaccinated? There are many pharmaceuticals out there making billions of dollars but over a billion Africans did not even receive a vaccine... Why? Because pharmaceuticals sell their products in western countries that pay the highest price. Afrika is a third world continent and does not have the money so they end up last. In the meantime, 90% are not vaccinated but did they all die? Did their healthcare stop because of too many sick or dead people? Not at all.

In other words, would you trust a multi billion dollar company that makes billions on selling vaccines or would you trust yourself by just looking at the real hospitalization and infection rates that already tell you 99.5% of the people don't even get sick and the ones who do end up in the hospital are either overweight or already unhealthy?  They even pushed parents to inject their children. While 99,999% of all children do not even get sick. No more than the normal flu. And to keep the pressure up they invented covid passports. Without a covid passport you can’t even travel anymore.

That does not mean nobody should take a vaccine or that vaccines and medicines are bad. There are many other vaccines out there that are actually needed. 

"Bicycles are the slow death of the planet."

A banker made the economists think this when he said:

“A cyclist is a disaster for the country’s economy: he doesn’t buy cars and doesn’t borrow money to buy. He doesn't pay insurance policies. Don't buy fuel, don't pay to have the car serviced, and no repairs needed. He doesn't use paid parking. Doesn't cause any major accidents. No need for multi-lane highways.

He is not getting obese.

Healthy people are not necessary or useful to the economy. They are not buying the medicine. They don't go to hospitals or doctors.

They add nothing to the country's GDP.

"On the contrary, each new McDonald’s store creates at least 30 jobs—actually 10 cardiologists, 10 dentists, 10 dietitians and nutritionists—obviously as well as the people who work in the store itself."

Choose wisely: a bike or a McDonald's? It's something to think about.

6.6 How much value do you offer?

Now have a look at your own situation. Chances are you are an employee. You work for someone else. How much value do you offer? Probably plenty, just in the wrong way. If you offer a lot of value to your employer, who reaps the benefits? You or your employer?

Suppose you build and design a new application for your employer. A perfect application that the customers of your employer can use well. How much money do you get for this exactly? Do you suddenly get a 100% increase in salary because you designed a new application? Nope, you are just doing your job. You deliver value but you get little in return and your employer earns big money. Companies leverage their employees to make millions.

Are you ever going to become a millionaire by working for someone else? Nope! Of course there are exceptions but for normal mortals like you and me, the chance is zero. 

6.7 The power of the internet and providing value

There is no simple step-by-step plan to become a millionaire. If there was, everyone would be a millionaire. You now know at least the first main ingredient of the recipe: 

“Your product/service must have an impact on millions of people”

If you want to make millions you will have to influence millions of people. How you do this doesn't matter.

But there is one medium from which by far the most millionaires are created. What is the most easy way to influence millions of people...? How about a simple mouse click? The Internet is by far the easiest way to reach millions of people. There are millions of websites for a reason. Becoming a millionaire has never been easier. Yet for most people it seems like an impossible task.

The second ingredient is providing value

The number one biggest mistake of most people trying to start is business is thinking about themselfs. How much money they will make or what they think about their product or service. If you are chasing money, you'll never become a millionaire. You need to provide value. If you can help or entertain people money will automatically follow. Nobody cares what you think about your own product or service, people only care about themselfs. If your product or service has value for them. Just think about all the things you buy. You don't care who made it, you only look at the value it will give you and if the received value is on par with the price. For example, you find the best looking shoes you've ever seen. But they cost $2500. Would you buy them? Probably not. 

The internet grows each year and this will go even faster in the next few years. Older people that did not grow up with the internet will be replaced with the youth that start learning everything about computers and the internet on the day they were born. Ever noticed that a three year old can handle the Ipad better than grandpa?

Another great thing about an internet business is a very low starting cost. You can start a website and hosting for just a few dollars. You don’t have to buy anything physical other than a computer or laptop but you probably already have one. Combine the low start up costs with an online store that is online 24/7 reaching a potential audience of millions is incredible. In fact, almost all new self-made millionaires run an internet business. 

Don’t get me wrong, this all sounds easy but it takes a huge amount of your time to make it happen. You need to spend at least a few years working on your product/service and chances are you won’t make a dime during those first years. In other words, you need to start your business beside your day job. You need to give up your free time to start building your business. It all comes down to your mindset:

Employee Mindset:

Mindset becoming financially independent:

Mindset of the business owner:

Someone who wants to become a millionaire only thinks about themselves and will hardly be influenced by other people. Once you start to create another mindset about becoming financially independent or building a business you will sooner or later encounter people that think you are crazy. They will try to keep you down and will try to convince you it wont work, it’s too hard, etc.

Someone who wants to become a millionaire has no excuses. The more often they fail the better. In fact, the more often you fail is the path to success. Once you fail you know how not to do it. In other words, they never make the same mistake. Ultimately, this is how you end up with success. This not only applies to millionaires but to everything you undertake in your life. If you are afraid to fail you will never become successful.

Someone who wants to become a millionaire never blames anyone else. Not happy with your boss or job? Find another job. Not happy with the place you live? Move. A person who wants to become a millionaire does not blame something or someone else for his/her choices but only himself/herself.

Time is very important for someone who wants to become a millionaire. Someone who wants to become a millionaire does not sit in front of the television every night watching a movie on Netflix, looking around on facebook/youtube or gaming. Time is not only the most important asset in the world it’s also very limited so spend it wisely.

Do you see the difference with the mindset of an employee? An employee often sits around complaining about their job/boss. Then ten years later they are still working at the same place. An employee often does something useless like watching television, gaming, going out on the weekends. That is not wrong if you like to do it, but that will not make you a millionaire. In other words, if you want to become a millionaire, you better teach yourself the mindset of a millionaire instead of the mindset of an employee!

7. Taking shortcuts

There are no shortcuts in life. Everything you want you need to work for. Few examples:

They simply won’t work long term and can have very negative side effects. There is no shortcut in becoming a millionaire. The success you see from other people did not come for free:

You can’t ride a bike in just one go. You need to do it many times before you get the hang of it. In chapter 9 and 10 you’ll find more information on how to start investing or how to start your first business.

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