Career and Business | Investing and Debt Pay-Off

How to Become a Millionaire: A Beginner’s Guide

You want to become a millionaire but don’t know how. For the longest time, I didn’t know either. And if I hadn’t taken the time to research and learn how other people did it, I might have spent the rest of my life always worrying about money.

It’s like it’s a secret that the rich don’t want you to know. Why? Because, if everyone learned these “secrets” then it would be harder for the rich and ultra-rich to be classified as rich because everyone else would have just as money as they have. And if they don’t have more money than you do, they don’t get to feel superior.

By pouring over many books and articles on how successful people “made it,” I learned two things that most of them have in common: Most of the rich start their own businesses and most of the rich learn how to invest their money so that they can earn even more.

So I decided to write a “starter’s guide” for both starting a business and investing. Without taking these two major steps, you’re making it harder on yourself to get wealthy.

The first step is to start a business. If you don’t own a business, you should. Over and over again, statistics show that you’re more likely to become wealthy. Nearly half of all US millionaires own businesses. By contrast only 23% of millionaires work for someone else. By owning a business, you increase your chances of getting wealthy. While owning a business is never easy, if you pick the right one for you then you can, for the most part, enjoy running it and watching it grow.

Investing your money is the second step. While this isn’t necessarily easy either, with the right education, it becomes easier. Part of your investment should be in your business but the rest can go into other facets, such as stocks, bonds and real estate.

While all of this takes great effort, it’s much harder being poor and always struggling. Do you want to still be struggling financially 10 years from now? I didn’t think so…

The Basics of Starting a Business

Educate Yourself

If you’re not sure on how to start a business, or what to start it in, you can check out my article How To Launch Your Dream Business. I also highly recommend reading magazines like Inc and Entrepreneur and even watching shows like Shark Tank. Also, watch videos on YouTube about how to start a successful business. Learning from other business owners is the best way to set yourself up for success.

This is how I taught myself about how to launch a business. No one in my family had owned a business before. Nor did I major in business in college. But about 12 years ago, I got the entrepreneurship bug. So I started reading books and articles and watching YouTube videos so I could learn. Once I had some basics down, I dove in.

The best way you can learn after getting acquainted with the basics is to just do it! You’ll learn more by doing than just reading—and don’t worry about making a few mistakes along the way. Every business owner makes mistakes no matter how long they’ve been doing it. But each time you make a mistake, you learn something new and get even better.

Get the Right Team

Several things I’ve learned from being a business owner myself is that you have to get the right team. Having the right team should apply to both your business and personal life: You need people helping you build your business but it can also mean having someone clean your house so you can spend that time working on your business instead. I used to try to do everything myself and I learned that all that did was impede my progress.

Millionaire business owners know that they have to have others help them reach their goals. You can hire all kinds of help, such as assistants, web designers, writers, managers, salespeople and more for ongoing, day-to-day operations. But you can also seek out professionals who can help you as needed, such as a bookkeeper, accountant, lawyer or even a financial advisor.

Part of getting the right team does involve something the wealthy won’t readily admit to you or even themselves—it’s almost like a dirty little secret. In order to get wealthy you must find people who are good at what they do but are willing to work at a rate that is less than what you can make from hiring them for your business, even to the point that you pay them at the lowest rate they’ll accept.

One only needs to look at Walmart as an example: Their CEO earns around $23 million per year while the average Walmart “associate” earns just 20K per year. While Walmart is a bit of an extreme example, using this form of arbitrage—paying less at the bottom so that more money gets funneled to “the top”—is the principle all successful business owners use. While this may not seem fair, it’s the reality.

But you don’t have to be as extreme as the Walmart corporation in their pay discrepancies. When I had my education business, I paid my contractors a generous hourly rate even though most of them would have accepted less. I charged our customers about 33% more than that. The 33% became my business’s gross profit—before the cost of advertising and other expenses.

It will be up to you whether you are generous or stingy in what you pay others. Either way, you still have to ensure that your business is getting more in return than what you are giving that particular employee or contractor. Otherwise, there’s no point in having them on your team.

Associate Yourself With Other Business Owners

Launching a business can be a lonely process. You can feel like you’re on an island. But joining business groups, networking and reaching out to other business owners online can help you feel like you’re part of a community. It will also increase your chances of success because you can observe and ask questions of these other business owners. It can also help you believe in what you’re doing. Seeing that other people run successful businesses can be a reminder of what you can have.

The opposite of this is to limit your time with people who don’t seem to have any goals or support you in yours. A lot of people are too scared to start a business because they’re afraid of failing. Don’t let their fear of failure get in the way of your goals. Remember, it’s your path; not theirs.

The Basics of Investing

Starting a business is like investing in yourself. Now you have to get familiar with the three facets of investing: stocks, bonds and real estate. If you don’t learn how to invest your money, you greatly reduce your chances of getting wealthy. Plus, these investments can earn money for you while you sleep—which is what every millionaire learns how to do.


Stocks can get a lot of bad press and there are certainly times in history where the stock market has dropped to staggering lows. But overall, it’s going to give you the most bang for your buck if you learn how to do it properly. My investment of choice is dividend stocks. Historically, they have returned a whopping 11% per year. If you’re not sure how to get started, check out my article Why Everyone Should Own Dividend Stocks (A Simple Guide).

The downside is that it can be a gradual accumulation of wealth so you have to have patience. Investing in dividend-paying stocks is not a get-rich scheme–but it does work. Investing in these stocks takes advantage of compound interest which is earning interest on top of interest.

It’s like starting out with a small snowball and rolling it down a hill: Your returns will start out small but they will gradually get bigger and bigger. If you can keep buying shares of dividend stocks and reinvest the dividends into buying additional shares, and you can do this over a long period of time such as 20 years, you will be amazed at the amount of money you could eventually earn just off of the dividend payments.

The problem is that most people lack patience and discipline. They want to see those big returns right away and when they don’t see it, they give up. But if you were to invest just $5,000 this year and let it sit for 20 years in a dividend-paying stock without adding any more of your money to it—but reinvesting the dividends into buying more shares—you would end up with $40, 300. Invest 10K and it would turn into about $80, 600 after 20 years. Of course, you want to keep adding money to your account along the way so that your investment grows even more exponentially.

What I like about dividend stocks is that it’s almost a guarantee of a certain return just for owning shares in a particular company. It’s also a relatively safe way to invest and involves very little hassle or management—which means you can spend more time enjoying life.


Bonds are a type of debt instrument issued by either a corporation or the government. By investing in a bond, you help this entity finance a project in return for a steady interest payments over a fixed period of time. Once that time period is up, you get your initial investment back. (The exception to this set-up are zero coupon bonds, which don’t pay interest but are sold below it’s face value. In other words, it’s like getting a discount off of the original price.)

There are three types of bonds:

  • Corporate: These are issued by corporations to raise money. They pay higher interest rates but the earnings are taxes at both the state and federal level.
  • Municipal: These are issued by local governments. The interest rate is less than what you would get through corporate bonds but since they are issued by your city or state government, they’re considered safer. The earnings from these bonds are exempt from federal taxes and, if you buy bonds from your home state, they will be exempt from state and city taxes as well.
  • Treasury: These are issued by the federal government. The interest rates are lower than corporate bonds, which means you would earn less per bond, but these are backed by the US government so they are considered virtually risk-free. You will, however, pay federal taxes on the interest earned but no city or state taxes.

Bonds can actually be a little more complex than dividend stocks so you would definitely want to read more about them that what I provide here should you want to invest. But if you pick the right bonds, they are almost a guarantee return. Plus, most financial advisors recommend investing more heavily into bonds as you get closer to your golden years.

But since bonds can be more complex to invest in, including needing at least 5K to invest in most of them, you might consider looking at a bond fund as I discuss in my article How to Bring More Money and Fun Into Your Life. Also, if you have a mutual fund, you most likely already have a portion of your money invested in bonds.

Real Estate

While your primary residence can appreciate in value, you shouldn’t consider it as an investment because everyone has to live somewhere. And if your home is going up in value, it’s most likely that all the homes around you are, too, so you’ve gained nothing. Plus, by owning this property, you are responsible for all maintenance, repair, taxes and insurance on it.

I found this great article called “I’m a financial planner—here’s why I won’t buy a home” by Eric Roberge on the Business Insider website. I love how he talks about my key points in home ownership: The unexpected costs that can occur, how we tend to buy a bunch of stuff to fill up our homes when we own one, and how you can be stuck in an area while you wait for the market to recover.

Plus, you have to put down a large chunk of money to buy a home. That’s money that could be put to better use by investing in the stock market. While dividend-paying stocks have historically returned 11%, homes have historically returned just 3% not counting maintenance and repairs.

My point (and Eric Roberge’s) is that investing in real estate is not about owning a primary residence. In fact, there are people everyday who go broke trying to keep up on all of the maintenance and home repairs associated with their homes. With rent, your costs remain the same so you know what to expect. Plus, renting is just easier. If something breaks in my place, I just let the management know and they deal with it. It’s like having a personal concierge on call.

If you still want to invest in real estate, you have to go beyond your home. Consider buying a duplex or triplex. You could live in one of the spaces and rent out the rest. You could also get into flipping homes as a business. On a smaller scale, you could rent out space in your home (if you insist on having one), using AirBnb or even renting out an RV. But relying on your primary residence as a source of major wealth is a mistake.

I think it’s important to understand and educate yourself on at least the basics of investing in real estate but if you’re going to choose that as your primary investment choice, then you need to do all you can to learn about mortgages, APR, home cycles and more. Don’t listen to real estate agents, who are going to tell you that a home is always a good investment because they want to earn a commission. (They also probably don’t understand investing in the stock market.) Do your homework and then decide for yourself.

quote: People without leverage work for those with leverage.

Millionaires Use Leverage and So Should You

I believe that poor people often end up staying poor simply by lack of education and effort. While some people end up wealthy by shear luck, most end up that way because they learn to leverage their skills and money to earn them even more. Leverage is when you use other people’s time, skills and even money to create more wealth and time for you.

In one of my favorite books Wealth Secrets of the Affluent by Christopher Jarvis and David Mandell, the authors explain the importance of leverage: “Without leverage, people would have to do everything themselves…Leverage frees you up to do the things that are most important, most profitable, or most enjoyable to you.”

I love their point about how leverage can free us up to spend more time to do things that we enjoy. By starting a business (in a field you love, of course) where you can use other people’s skills to profit, and by taking that money and investing it into other businesses via the stock market for even more profit, you use leverage and therefore, increase your chances of becoming wealthy with less effort.

And less effort is key. You shouldn’t have to work at a job you hate but be no better off financially years from now. That would be tragedy. I believe we all deserve better than that. And while I haven’t reached that million dollar mark myself yet, thanks to leverage, I’m now well on my way. After reading this guide, I hope you’ll take action so that you can be, too:)

Has this article inspired you to start a business, begin investing or use leverage? I would love to hear from you! You can reach me at to share your story. Au revoir, namaste and until next time!

    %d bloggers like this: