Achieving a net worth of one million dollars is a goal a lot of people share. That’s probably because they see it as being enough money to retire on, or to live the lifestyle of their dreams. You also automatically earn the title of “millionaire”, and that’s something you aspire to because it means you “made it” in life.
One million dollars is more money than most of you have ever had in your checking account and, in theory, it’s enough money for you to quit your job and retire early.
That amount of cash doesn’t mean you can go traveling the world and spending like there’s no tomorrow, but you would have enough to maintain a comfortable lifestyle for you and your family.
But maybe you’re not willing to wait until you’re 65 before you can retire? After all, why wait until you’re too old to enjoy the money you’ve squirreled away?
What if we could show you how to make a million dollars within the next five years?
HOW TO EARN MILLIONS: START WITH BITE-SIZED GOALS
It’s a great idea to break a larger goal into smaller chunks. After all, how do you go about eating an elephant?
One bite at a time, folks!
First-time marathon runners don’t wake up one morning, strap on a pair of sneakers, and run 26.219 miles on their first attempt. Instead they establish a training plan, repeatedly running shorter distances until they achieve their goal.
Earning US$1,000,000 is achieved using the same methodology.
An income goal of five years is not so close that it terrifies you into inaction, but also not so far away that you can conveniently ignore it. Setting a time frame around your goal makes you accountable to it, and that’s the only way to achieve real success in anything you do.
But before we go any further, look back at the last five years of your life.
What have you achieved?
What would you do differently?
How would it have felt to have tackled any of the challenges you faced with US$1 million sitting in your checking account?
BY THE NUMBERS
Earning $1,000,000 in a year requires that you earn $83,333 per month. That breaks down to $20,830 per week. Based on the average 40-hour work week, that means you need to earn $480.00 per hour.
But, we’re looking at a 5-year plan, so the amount you need to earn per hour is now $96.
Let’s assume that you’re not actively working to earn one million dollars, but that it’s achieved through passive income streams.
So that’s US$1,000,000 / 8,760 hours in a year / 5 years, giving you an hourly income requirement of…$22 per hour.
Figuring out how to make $22 per hour through passive income isn’t nearly as scary as trying to come up with a business plan to generate one million dollars overnight, is it?
Now you can see just how manageable this goal is.
1. UNDERSTAND THE GAME: MILLION DOLLAR IDEAS VS. SCALE MENTALITY
Far too many people are utterly obsessed with coming up with a million dollar idea in the hope it will make them millions of dollars. And while some people do actually manage to do this, it’s not the smartest way to tackle the financial goal you’ve set for yourself.
Instead of looking for that one big, elusive million dollar idea, why not look for an idea that will generate $10 of profit? And then repeat that process 100,000 times.
You see, earning large amounts of money is often more about perspective and planning than it is coming up with an idea nobody else has thought of.
In fact, it’s far easier to come up with a product or service you can sell for $10 to tens of thousands of people than it is to come up with the one big idea that you can sell to an investment company. Operating in the “million dollar idea” mindset can be very frustrating, because you have the desire to become financially independent, but you’re going nowhere fast.
So, when it comes to making a million dollars let’s take a look at scale. And, for the purpose of our thought experiment, we’re going to combine the idea of scale with the concept of 1,000 true fans.
Let’s say you come up with a side hustle idea that generates $10 in profit every time you sell it. In your first year you sell that product or service to 1,000 people, generating $10,000 in profit.
In your second year you take that $10,000, create a product worth $100 and then sell it to your next 1,000 true fans. You’re now sitting on $100,000 in profit. Pretty neat, right?
As your business grows and matures in years three and four you realize that you have a high-end product or service you can offer to customers. This new product costs $1,000, but you’ve built an amazing reputation in your industry, so you know you can find 1,000 true fans to purchase it from you.
By year five you have generated $1,000,000 in profit, and without ever having to find more than 1,000 people to purchase what you’re selling. By the way, this projection doesn’t include all the true fans who are still buying your $10 and $100 products.
Internet marketers have used the above “profit ladder” to get people to buy into their brand at a very low price point, and then as the years go by, create new premium products or services for their eager audience. In fact, a guy named John Reese very famously used this method to sell US$1,000,000 of his Traffic Secrets course in 24 hours. Yes, really.
I was introduced to the above principle in the book “Evil Plans” by Hugh McLeod. I don’t want to tell you what to do, but every entrepreneur should read it.
It is incredibly difficult to move from a standing stop to becoming a millionaire without a plan.
It can be incredibly easy to earn silly amounts of money by simply breaking your bigger goal into a series of smaller ones.
2. CRUSH YOUR SELF-DOUBT
The right mindset is often the deciding factor between earning as much money as you need, and constantly trying but never getting there.
You might feel that you lack a formal education, or that you don’t have enough savings, or that now is just not “the right time” for you to get started. That’s just your inner critic talking, constantly reminding you of what’s not possible. If it were possible to do so, I’d recommend punching your inner critic in the mouth…but let’s not go down that road.
But our world is full of examples of people who have done the seemingly impossible. People who built businesses from their garage, going on to become some of the wealthiest people in the world.
And the weird thing is many of the wealthiest people in the world lack a college education – Bill Gates, Steve Jobs, and Richard Branson, among many others.
One of the most important steps you can take towards becoming a millionaire is accepting that you’re good enough to make it happen, and that you deserve it in your life.
Your mindset can and will dictate the outcome of your efforts. If you need a little bit of a mindset boost or shift then check out this short video by Jim Rohn, explaining how he became a millionaire by age 31.
3. TAKE ACTION
Daydreaming about being a multi-millionaire might feel good, but it doesn’t move you any closer to your goal.
You might not like hearing this, but what usually separates wealthy and successful people from those just scraping by is that wealthy people have trained themselves to recognize opportunity.
Once they see the financial potential of something, they become an early adopter, refine their process, and execute their business plan.
The people who saw the potential in Bitcoin invested very early on in the life of that currency, made their money, and moved on to the next opportunity. They weren’t like everyone else trying to invest when Bitcoin hit US$5,000 or $10,000.
Instead they bought Bitcoin when it was worth almost nothing, speculating that it might become valuable within a few years, but also based on careful market research.
The people who followed that process became multi-millionaires – including a handful of billionaires – in the crazy final weeks of 2017 when Bitcoin hit US$20,000.
4. CONTROL YOUR SPENDING
The stereotypical image of a millionaire is somebody with their own yacht, who takes chartered flights to exotic locations, and has several luxury cars lined up outside their palatial home.
Now, that might be how most billionaires live, but that’s not the lifestyle of your average millionaire. In fact, they’re the ones quietly driving a beat-up car, living in a modest home, and who budget for everything.
You might even think of some millionaires as being miserly – a bit of a Scrooge McDuck – but the truth is they truly understand the value of money. They understand that tiny changes in lifestyle can have a huge impact on their financial future. That taking on a small mountain of unsecured debt, because you want immediate gratification with a big house, expensive vacations and nice cars, is the quickest route to bankruptcy before you’re 40.
The flipside of the above approach is you don’t need to live on Ramen noodles and beans for the next five years if you want to make a million dollars. It just means using a bit more common sense when it comes to spending. It means avoiding expensive finance deals on cars, vacationing “at home”, cooking your own meals instead of eating out, and basically behaving like an adult who doesn’t want to spend the rest of their life in debt.
Dave Ramsey’s YouTube channel is an absolute treasure trove of free financial advice, from an actual multi-millionaire, and not just somebody who has theories on how you should manage your finances. Dave is more of a long-term investment planner, so he won’t have advice on how to become a millionaire within the next five years. But he will change how you view your income and expenditure.
Even if you can’t spare the time to learn more about personal finance ( because you’re too busy being broke?), here’s one takeaway you can live by: Millionaires never, ever overspend.
5. MAKE SOMETHING BETTER
You don’t need to reinvent the wheel, fire or the home computer to become a millionaire. You could try, but why swim upstream when there’s an easier way to make more money and with less effort?
Another path – and one of lesser resistance – is to take an idea that’s already been put into practice and then improve on it.
So, while coming up with the next Uber, Space X or iPhone could make you rich overnight, you don’t have to struggle with trying to do that.
Let’s look at a business model that’s doing well right now and find ways to improve on it.
In our example we’ll use a fast-food restaurant order and delivery app – most cities or countries around the world have at least one of these services operating there.
You start researching how you can improve on the fast-food delivery app, and you realize they’re charging each restaurant a 15% fee on every single order sent through the app. This then means every customer’s meal is more expensive than it needs to be.
Now you need to come up with ways you could launch a similar service, but only charge the restaurants a 7.5% fee instead of the exorbitant 15% they’re paying right now. You could also come up with special “meal deals” that are only available to users of your fast-food delivery app.
Very few fast-food businesses could refuse a deal like that, especially if you can offer them some level of exclusivity in the area e.g. you might only allow the top five Thai restaurants in a given area to offer their food via your app.
Or how about a service competing with DogVacay, where dog hosts only kick back 10% to the service provider, instead of the 20% DogVacay currently charge?
Sure, either of the above ideas will take time and money to implement, but earning a million dollars in just a few short years requires effort and investment. You can find thousands of stories online about people who came up with simple business ideas that made them millions.
You just got two million dollar ideas free of charge. You’re welcome.
6. START MULTIPLE STREAMS OF INCOME
If you look at the vast majority of self-made millionaires or billionaires, they have more than one source of income. In fact, I can pretty much guarantee they do.
On the surface it might appear like their income only comes from one source. But once you dig a bit deeper you’ll find they have money invested in real estate, several e-commerce businesses, a cryptocurrency portfolio, an indie publishing house, etc.
That might seem like they’re being “greedy”, but they’re just protecting their income, especially because of the volatile economic environment we’ve found ourselves in since the dark days of 2008.
Having multiple streams of income protects you against the failure of any one business or investment. So, let’s say you have $250,000 tied up in real estate. Good for you! But what if there’s another “housing bubble”, and an ensuing bust?
The smart investor spreads their investments around. They never have all their eggs in one basket. So, they might lose the $250,000 in real estate, but they have another $250,000 in mutual funds. That’s backed up with $100,000 in e-commerce income, and a cryptocurrency portfolio.
Elon Musk is a perfect example of a wealthy person investing in multiple businesses simultaneously. He owns Tesla, Solar City and SpaceX. Solar City feeds the energy demand of Tesla car owners in certain parts of the United States. Solar City also complements his Tesla Powerwall range of products. Not being one to hedge his bets, he also has SpaceX to fall back on should the worst happen.
Diversifying your income sources is smart. It’s basically insurance against losing everything you own because of one or two bad business decisions. Combining passive income streams with non-passive income streams will also make it far easier for you to earn US$1,000,000 within the next five years.
7. RUN AN E-COMMERCE BUSINESS
The world of e-commerce got off to a shaky start with the dotcom bubble bursting in 2001. This resulted in venture capital firms and many early adopters losing their collective shirts to a series of bad investments, based on over optimism and overvalued stocks.
Things have settled down a lot since then, especially thanks to the ongoing success enjoyed by Jeff Bezos and his Amazon empire. The required Internet technologies and market demand caught up with the idea of e-commerce several years ago. Online shopping is now an accepted part of modern life. In fact, we’re pretty sure mass panic would ensue if people could no longer shop online.
Tens of millions of engaged online shoppers means there are now more opportunities than ever to start an online business. A business capable of earning at least one million dollars within the next five years. This information isn’t about “How to make millions on the Internet without trying” because that was never true.
Here are some of the most popular online business models:
An e-commerce business should be the very first additional stream of income you consider.
Because this income stream can be 100% passive if you structure your online business correctly. It can run 24/7/365 with almost no input from you.
Remember that you only need to earn $22 per hour 24/7/365 to earn US$1,000,000 within the next five years. An e-commerce business can make the dream of “making money while you sleep” come true. An affiliate website, Shopify store, or other online business can make money regardless of whether or not you’re awake.
And believe me there’s no better feeling than to wake up in the morning, check your online stats, and see that you’ve made a few hundred bucks while you were asleep. Or better yet, you make that money while you’re at your day job.
It’s a surreal feeling, but it’s entirely possible.
Some e-commerce businesses can be more hands-on, especially if you’re creating and selling your own products online. That business model means dealing with customer service queries, shipping queries, and a lot more hand-holding than you might like. In fact, it can get so bad that you wind up hating the business you’re running
So, why not get Amazon to do all the heavy lifting for you instead? The Amazon FBA (Fulfillment by Amazon) e-commerce model means you ship your inventory to their fulfillment centers, and they manage everything else after that, including customer service queries.
Can you make US$1,000,000 dollars with an e-commerce store or business?
In fact, you can make that much money with nothing more than a handful of profitable affiliate websites, either directly from commissions earned, or by selling off your profitable websites within our 5-year time frame. Spencer, for example, recently sold one of his websites for US$425,000. Another example of an affiliate site being sold for a 6-figure sum is 10Beasts, which sold recently for US$560,000.
8. SELF-PUBLISH YOUR WAY TO WEALTH
It’s almost funny to look back on the launch of the Amazon Kindle, and how people didn’t ever see it becoming a “thing”, convinced it would fail. Now, a little over a decade later, e-readers, primarily the Kindle, have caused huge waves in the publishing industry. Even bookstores like Barnes & Noble felt the pinch of the digital publishing revolution, and continue to do so.
But the launch of the Kindle not only revolutionized how people read books, but also how books were published. A Kindle allowed you to store thousands of your favorite books on one device, but the Amazon KDP (Kindle Direct Publishing) platform meant that anyone with a word-processor and an idea could become a self-published author.
It took a few years for the KDP platform to gather momentum, but by 2011 it was in full swing. The interweb was full of tales of self-published authors striking it rich, including people like Mark Dawson and John Locke.
To the outsider it looked like the KDP platform reached saturation point very quickly. Naysayers said that new authors would struggle to make a living, never mind make millions.
Here’s a step by step guide on how to self publish a book on Amazon.
Then, in November 2015, a guy called Michael Anderle arrived on the scene. He promptly blew apart all those preconceived notions people had about KDP being saturated. Michael set himself the goal of earning US$50,000 per year by writing a series of twenty self-published sci-fi novels.
Four months later he’d earned US$40,000 from just three books, and as of 2018 his income is unknown. But based on his track record it’s a safe bet he’s making 6-figures per month from his self-publishing business. He’s one of many “unknown” authors making a lot of money from their eBooks.
He’s also coached several previously unknown authors to incredible levels of financial success, many of them on target to earn millions from their self-published books within the next few years. Here’s the 20BooksTo50k Facebook group Michael set up for people who want to emulate him:
Not sure what to write or what books sell best on Amazon? Never fear, the team at K-Lytics have all the market data you could possibly need.
You can make a small fortune from publishing on Kindle even if you have no interest in writing novels. Several people, including Michael Anderle, are now acting more like an indie publishing house than an indie author. Johnny Truant & Co. at Sterling and Stone are doing pretty much the same thing.
9. INVEST IN REAL ESTATE
There’s a finite amount of square footage on our planet, so regardless of current market trends, investing in real estate is one of the safer investments you can make. Basically, the value of property will never, ever reduce to zero.
housands of investors lost everything during the property crash of 2008. However, most of that came about as a result of sub-prime mortgage lenders selling homes to people who couldn’t afford them. It was financial suicide for everyone involved.
What you never hear about is the wave of millionaires created because of the property market crash. They bought properties for cents on the dollar, and now own multi-million dollar real estate empires.
When it comes to making real estate investments you have two primary choices:
- Rental properties
- Flipping properties
Rental income is the easier choice to make here if you just want passive income. The issue is that making a million dollars from rental income would involve buying multiple properties. You’d have to scale to a level that requires you to hire people to manage your properties. The more people you hire, the less positive cash flow you have each month. You could quite easily create a full-time job for yourself, without ever meaning to.
Let’s say you have a rental property that cost you $150,000 to purchase, and has a mortgage of $650 per month. You can rent that same home for maybe $1,000 per month. That leaves you with a gross positive cash flow of $350 per month, assuming nothing in the property gets damaged or needs to be repaired. Purchasing three rental properties would create a positive gross cash flow of $1050 per month, or $12,600 per year.
Sounds great, right?
Except it would take 79.36 years to earn $1,000,000 this way.
Property flipping will take more effort and planning on your part, but your return on investment can be significantly higher. It’s only when you look at the numbers that you can see why.
A seasoned property flipper looks for a home that’s in need of repair, or where the buyer is looking to make a quick sale. Either situation means you might be able to acquire that home for 10% – 25% off market value.
Let’s assume that you can purchase a “fixer upper” property for $120,000, with a potential resale value is $150,000. Your total investment here might have been as little as $12,000 for a down payment.
You spend six weeks renovating the property, getting it up to code, and ready for a family to move into. Your total expenses for the renovation come to $10,000 for materials, labor and organizing an open day.
You sell the property for $145,000 thanks to your successful open day, leaving you with $15,000 in net profit.
In this example you generated more profit from a 6-week flip than you did with an entire year of rental income. The estimated purchase and resale values mentioned above are also extremely conservative. There’s no reason why the same property couldn’t be purchased for $100,000 and resold for $150,000, leaving you with $40,000 in net profit.
Generating US$1 million in net profit from property flipping is simply a case of scaling your efforts by investing wisely and flipping the properties as quickly as you can.
Here’s a very basic “profit ladder” that shows you what’s possible if you can double the profit you make from each successive property flip.
Do you think you could buy, renovate and flip seven properties over the next five years?
By the way, real estate flipping shows are one of my guilty pleasures, especially Flipping Vegas. I know most of the drama in these shows is scripted, and almost entirely fake. But there’s something very satisfying about watching a rundown property being renovated and flipped for fifty grand in profit.
10. THE STOCK MARKET AND SAVINGS
If you’ve watched “The Wolf of Wall Street” you might have found yourself almost admiring Jordan Belfort. But making money on the stock market isn’t nearly as glamorous as the movies make it out to be. It’s also not as profitable for the vast majority of investors. You’re just as likely to lose some, or all, of your investment capital as you are to bank millions.
If you’re wondering how to make a million dollars in the stock market, then the answer is “slowly”, in the vast majority of cases. It’s highly unlikely you’re going to hit a home run and walk away with overnight millions.
The trick with investing in stocks is not to focus purely on the value of the stock right now, but instead on its future potential value. People who invested $1,000 in Netflix stock ten years ago would now have a portfolio worth at least US$50,000. This is 4x the return you would have made on Apple stock. It’s 20x the return you would have achieved with Disney stock. Remember, you’re looking for outlier stocks that will outperform the norm.
So, it’s clear that you definitely can make a huge return on investment with the right stock.
You will need to find 20 other stocks that perform as well as Netflix to make US$1,000,000 within five years. It’s possible you might do that. But your time and effort might be better spent on business models that offer a more immediate return on investment
Investing in stocks can make you a millionaire, it just takes a lot longer to do it that way. That’s the same reason we didn’t cover things like mutual funds or a Roth IRA in this post. It is possible to make your fortune with a “managed savings account”, it’s just going to take 30+ years.