Almost 20 million millionaires in the world today

There are 19.6 million millionaires in the world, and their cumulative wealth has reached US$74 trillion, according to the World Wealth Report 2020 released Thursday by Capgemini, a Paris-based consultancy and technology services firm.

Want to join this elite club? Most millionaires are self-made. You’ll need to work hard, invest wisely, seize opportunities, seek deals, choose your life-partner carefully and have a little luck.

You too can become a millionaire. Or a perhaps even a billionaire!

Plant a seed

Make the commitment to become rich. Think about what it would mean to be a millionaire. Then go for it!

Be a go-getter

Go after your dream with gusto. Success won’t just come your way. You’ve got to make it happen. And that means knocking on a lot of doors. Get used to hearing “No.” Try not to take rejection personally. It’s a numbers game. Keep trying until you succeed. There are countless stories of eminently successful people that have endured hundreds of rejections before getting to “Yes.”

Turn your smart idea into a money-making business

You can create substantial personal wealth by doing what you love or do well. Getting started is easy. Decide on a business structure (e.g., sole proprietor, limited liability company, or corporation). Register with the state and abide by the laws and regulations that apply to your business. Get your business cards. And get going!

Always treat your customer right. Learn to anticipate their needs. And meet or exceed them. Need more help? Surround yourself with knowledgeable, trustworthy people. There are plenty of “how-to” books available at your local library or booksellers like Amazon. You may also want to hire an attorney or work with a partner. But be careful.

Write down your ideas

Buy a package of index cards and write down your money making ideas. Be sure to include a complete description and diagram, if appropriate. Make sure you note the date you conceived of and documented the idea. Consider filing a patent or trademark for your best ideas. And then put them into practice.

It takes money to make money

From nothing comes nothing. You must be making more money than you’re spending. Get a decent job. Work an extra job. It’s the sheer volume of money that will help catapult toward your goal. And the sooner you begin, the more time your money will have to grow.

Be a smart investor

Consider investing in real estate or stocks. You can start small. A great way to get started in real estate is to buy a duplex. Live in one unit and rent the other out. If you can’t afford a house, buy a condo. Remember the secret to real estate… location, location, location.

Through ING’s ShareBuilder you can buy a stock, with no minimum investment, for a commission only $4. Warren Buffett became the richest man in the world, in large part, by buying the stock of a few great companies at depressed prices. Don’t invest in “hot tips” from your friends or “turnaround” situations. They rarely, if ever pan out. If you’re not comfortable selecting individual stocks then no-load index mutual funds are a great way to go.

Get and stay fit

Not only will a healthy body help keep your mind sharp, you’ll be happier, better able to deal with stress, and improve your overall quality of life. And don’t forget about eating well and getting enough rest. Most of us need 8 hours of sleep.

Spend your money wisely

It’s easy to spend money. Ask Michael Jackson. Buy things only when you need them, not before. Make a distinction between things you need versus things you want. Most millionaires don’t flaunt their wealth. They drive older cars and wear $10 watches. The longer you wait to spend your money, the more time it’ll have to grow.

Protect yourself

Insure your home and rental properties for their replacement cost. Make sure you also cover your personal liability. Higher deductibles will lower your rates. You’ll want to revisit your coverage each year to ensure it keeps up with inflation and your changing personal situation. Consider purchasing an “umbrella” policy as your wealth increases to cover any personal liability not covered by your existing policies.

Consider forming a corporation or limited liability company. This will help protect your personal assets from business liabilities.

Avoid taxes legally

Take advantage of the tax laws to defer and reduce taxes. If you own your own business open and fully fund a 401(k) retirement plan. Don’t even think about using tax dodges. You could end up owing back taxes, interest and penalties. Or in jail.

File your taxes using a tax-return software like Turbo-Tax. The deluxe version works well for business and property owners. It will walk you through all but the most complex returns.

With contribution limits up to $6,000 and tax-free withdrawals in retirement, Roth IRA’s make a lot of sense. For taxable accounts bypass expensive brokers and invest in no-load tax-efficient index funds and no-load tax-free municipal bonds.

Choose your life partner carefully

Living with a loving partner can help fulfill and extend your life. Divorce is bad for your wealth. Lawyer costs, alimony, child support and the division of your estate could cost you “big time.” Need I mention the emotional turmoil? Worse yet, your kids could suffer more.

Shop for value

Ask for a deal. If the product is opened or you’re buying a lot, ask if they can reduce the price by 10% If you know a competitor is selling the product for less, tell them. They may match the price. You can also buy a floor model. While it may be a little beat up it will usually come with the same warranty as a new one.

Use debt prudently

Debt is not inherently bad. You just need to be careful to borrow for the right reasons and not get in over your head. Loan and credit card debt can be used to create income and build wealth. Let the banker be your friend.

Good luck!

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