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You know deep down that you will make it into the millionaire club. Despite reading everything you could about “The Millionaire Next Door”, it has been more challenging than you expected to reach $1 million.
People who are wealthy often claim that their first million dollars was the most difficult to make.
Are you feeling like you are hovering around $700,000.00 for ever. This sentiment may be a familiar one to you.
Let’s look at some reasons you might not be able to achieve your $1,000,000 goal.
Culprit 1 – You don’t plan well.
If you are looking to make $1,000,000 in your bank accounts, you will need a plan. You must plan ahead for any goal. Let’s take, for example, a college degree. This means that you have to show up for classes and make time to learn. Finally, it will lead to earning your degree.
It doesn’t matter if you are looking to make $1,000,000 or $1,000,000, the process is the same. However, it can be more difficult because you will need to consider how you plan to get there. Think about these questions:
- What amount have I saved or invested?
- What amount will I have to put aside each year?
- Which rate of return do I require?
- What time will it take to make an investment?
Let’s take, for example, the $20,000. You have already saved. Let’s say you have already saved $20,000. You decide to save an extra $1,000. It will take 24 years for you to achieve your goals at an annual return of 8%.
What can you do to make $1,000,000 more quickly? Consider that the same $20,000. You have saved it. Let’s say you have saved $20,000. How much time will it take to reach $1,000,000 if you only save $2,000 each month and earn a 10% annual return? It will take you 15.75 years.
These are simple equations. These equations are correct. Yes. (The stock market doesn’t always provide exact returns and fees can consume your money. You can make a better plan for the first $1,000,000 if you look at the numbers and have specific goals.
The second reason is that your business expenses can eat into your revenues.
There are many ways that you can earn $1,000,000. It is possible to earn $1 million slowly through investing or over the course of one year.
If you own a business, however, it is possible to lose most of your money by having to pay for expenses. This can include paying employees or buying computer paper to print at work.
You need to plan how you will lower your costs so that you have control over what you spend. Here are some ways to reduce your costs:
- Combine your purchasesNegotiate prices on any purchases that you need to make. Try to consolidate all your office purchase orders under one vendor. This can help you save thousands. Encourage vendors to bid for your business.
- Encourage fiscal discipline among your employeesFiscal discipline can be made a company’s core value. Employees who save money can be rewarded.
- Independent contractors can outsource your work.You can negotiate lower rates with consultants and also gain valuable experience in the fields of consultants.
- Reduce marketing and advertising expensesInbound marketing is a better option than traditional marketing methods. Instead of using SEO on your website, create YouTube videos.
Reduce your costs as much as possible to reach your goal of $1,000,000. This seems like common sense, doesn’t it? It’s easy to forget about the small expenses after years of being in business.
Culprit #3: Your approach to investing is a stop-and-start one.
What are your investment habits? Perhaps you were a great person and wanted to start your 401(k), but it didn’t work out. You started your 401(k) at work, and you quit. You might find it difficult to start your investments at a new position. Perhaps the paperwork is more difficult to find. Perhaps the HR department is not always available.
Maybe you stopped saving because your fridge went kablooie, and you had to get a new one. You thought that it would be nice to have the extra money next month. You didn’t begin saving for another six months.
Your overall growth could be affected by not starting and stopping again. In that period, you could lose thousands of dollars. If only everyone could see that figure fall in a large holographic image hovering over their heads …)
Culprit 4 – You can’t keep track of your progress.
Sometimes even the best laid plans can go wrong. It is impossible to predict what might happen to your investments. This is especially true if there are a few twists and turns along the way.
Perhaps your investments don’t align with growth. Perhaps you were a great investor with high hopes, but failed to monitor your nest egg for six months. It’s possible that you are disappointed to discover that your accounts don’t have the same growth rate as you thought.
Don’t be alarmed if your plan doesn’t work out as you expected. It is possible to still achieve your goal. You just may need to increase your investment, make new investments or use a different strategy.
To help you, get someone to join your team. Millionaires aren’t able to do it all on their own. Many millionaires hire financial and tax professionals to manage their income.
Ask about their fees and whether they’re a fiduciary, someone who will protect your best interests.
Culprit 5, You underestimate how long it takes your money to compound.
The hard work and long hours are the reason for this one. It takes a large amount of money, even if you start from zero (which is what a lot people do). This is obvious.
At 8% annual returns, 10,000 will turn into $518,914 over 20.5 year, and $15,000 will turn into $778,371 in 20.5 years. Alternatively, $20,000 will be worth $1,037 8,828 over the 20.5 year period.
It takes a while. It takes time. You can easily get discouraged by the slow progress but you must keep going.
Keep at it and you will see growth
It can be exhausting for even the most disciplined person to reach that $1 million mark. It doesn’t matter if you have $10,000 saved or $15,000 per year; it could still take many years before you get there.
Life happens and can also get in the way. Take control of the things you have. If you own a business, make a plan and cut costs. However, you should also keep the company going.
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Publited at Thu 29 July 2021, 11:31:22 (+0000).