Everyone thinks that it takes a lot to become a millionaire, like (you must) having a successful business or winning the lottery (being super lucky), however, that is not the case. I bet that you have walked by millionaires without evening knowing it.

Here are a few thoughts (or actionable things if you prefer) that you can do to move into the direction of being financially free – if you want to become a millionaire, logically depending on your circumstances, but nonetheless I think these points are valid for just about anyone. It’s a mix of advice I have acted on, mixed with my thought pattern. I mean, I’m sure you’ve googled, “how to make money”, “how to get rich”, etc. and there are plenty of articles out there, so the below is nothing new, except my consolidated thinking in terms of how to get to that point.

And just as an extra note – I do not equate money or job title to success. Unfortunately, society does. We are being conditioned to be greedy, financially, but that is for another post.

Spend Less Than You Make

Financial literacy is vitally important. A skill that is not taught in most schools and most of us do not learn growing up. How to handle money. We have all had our odd jobs. During my school years, I worked construction in the summer months to save money for the following school year. I remember having my savings book account where I would deposit all that hard-earned cash. These are topics we work through with our kids as well – financial literacy and how accumulating allows for bigger purchases or investments along with the difference in savings vs. investing and so forth. Hence, this point is the most vital of them all. Put something aside from every paycheck and spend less than you bring in.

And yes, I get it, life does not always work that way. I’ve been there too. However, generally speaking, getting richer every month is simply spending less than you make. On the other side of that coin, getting poorer is spending more than you make.

It’s a really simple principle.

Get Away From Debt

Growing up and moving from school to university or apprenticeships or straight into the workforce, you can’t go anywhere without noticing all the credit cards, and offers, and financial terms when it comes to “getting money.” Some years it’s tougher than others, depending on the economy, however, it’s treated as if the debt were a normal part of life. And believe it or not, most people have debt, large amounts of it in comparison to their lifestyle. It’s divided into “good debt” and “bad debt.” I’ve heard people talk about it as if it were some mystery of math. Yet debt is not really that complicated. So think about this:

You become poorer when you temporarily pay money to use other people’s money, while you get richer charging when you temporarily charge money to let other people use your stash.

Paying interest only makes you poorer and to me, you only, only, only, do that in two situations:

• You need to survive
• You earn (guaranteed) more on what you are financing than what you pay to finance it

Stay away from borrowing unless you know it’ll make you richer. I’ve seen people with great ideas in real estate and other places that have backfired. And I’ve seen a few great examples as well. (However, don’t argue with me on the point that you need money to make money. While true to a certain extent, debt is not the way – to always – finance that.)

Understand The Markets

Unless you go into financing, economics and head off to Wall Street, you’ll typically be someone who “invests in the market.” However, understanding the markets is a completely different thing. Don’t get me wrong. I do not time the markets. I am not an expert. I just read a lot and listen a lot. The point is, you get richer when nobody wants to invest. Events like high unemployment or the markets are doing poorly, or people are freaking out when everyone is just talking fear and misery.

Bad times will occur. In every industry and every market. It’s periodic and it’s natural. The problem with our species is that when it happens we freeze, or we believe we can own it. You can’t (in most instances). How many times have there been “what if” moments? What if I had sold that stock and bought back in now, I could have tripled it. But in the end, I just let it sit and watch it grow in the long term. Bad things will always happen to the market, but learn what “what” is. If you think the world is going to end, then stack up on foods and prep. If not, or at least not in your lifetime, then like Warren Buffett famously says, “Be fearful when others are greedy and greedy when others are fearful.”

You Need To Learn To Take Risks

Taking calculated risks is part of my nature. Something is wired into my family’s genetics that makes us do strange things, like mountain biking down the side of a mountain, rather than taking the path straight ahead. However, the same is true when it comes to money, love, or life in general. If you want to reap rewards, you need to learn to take risks.

Taking those risks can be in a variety of areas when it comes to money, in other words, those things going down in value. Whether stocks or real estate or even your own business. If you want to, you can go through life without taking any risks, but then don’t complain. And sure, sometimes it can go wrong. It can go really wrong. But ultimately it’s what you make of it. It’s like what we tell our kids when they first tried climbing. You never know if you’ll reach the top if you don’t try.

Riskier investments offer higher returns. That does not mean you pour all your money into a get-rich-quick scheme or business. But that return can be a big difference when it comes to your financial cushion. In simple terms, if you invest 100 Euros every month for 30 years of working, at a return rate of  ~12% per year, you end up with hundreds of thousands of euros more in retirement savings than if you only earned a consistent 2% per year. A calculated amount of risk is the difference between getting rich and getting by.

Again, don’t take risks just for the sake of it. That is gambling. Minimize your risk by doing your homework. I remember recently, in my former workplace, how many colleagues were telling me to dive into Wirecard. I said no. Go for Shopify. It’ll triple. I got laughed at. Hey, sometimes it’s up, and sometimes it’s down. I took my personal calculated risk.

Look Rich Or Be Rich

I love this saying. An old friend, a rich friend, never looked like he was rich. He was down to earth. A good mentor. And I’ve come to learn that many people that have a lot of money do not often look like it. The people driving Porsche and wearing fancy things are those that make a living selling stuff to the rich. Now, I do not want to sound demeaning or condescending here. It’s fine to have your LV bag if you can realistically afford it. We are conditioned by society to be “on display.” Basically – “look, I have money”.

However, if you can learn to divert your investible cash into things like stocks, bonds, crypto, real estate, business, etc. then you’ll become rich, rather than making you look rich and living a non-financial free life.

I fixed up our car, myself. So learn to grow rich, rather than look rich.

Live Here And Now, Invest For Eternity

Living in the here and now is a whole different topic. Get as much out of life as you can, each and every day. Work to live, don’t live to work. You’ll only realize the difference when something dramatic happens to you, and I believe the sooner you learn it, the better off you’ll be. However, when it comes to finances, keep your house in order and live each day to the fullest, but invest as if you will never die. Wrap your mind around the concept of “what could be”, “when you execute on”…

I mean, you could literally die tomorrow. Back when we lived in Düsseldorf, I brought my kid to school – by bike, and on the way back I was crossing a green light for cyclists and pedestrians and some guy in a car literally stopped last-minute, roughly 2 meters in front of me, because he was staring at his phone. I had a type of “flash” and after that flicked him off like there was no tomorrow. Yeah, I was pissed. He was panicking, but I just rode off, because…so the point of investing is to ensure you have a continual flow of cash forever and ever. That sounds dramatic and unachievable, but just sit down and do some basic math. You’ll be surprised at what putting aside a little bit of money can do in the long run, especially when it comes to the next generation.

Your Well-Being Is No One Else’s Responsibility

When it comes to your money, you are in complete control. It is no one else responsibility. If you need knee surgery, like me, then trusting your fate to a professional is one thing, but when it comes to money management my personal advice is to not turn over complete control to anyone. Do your own budget and math. It is simple.

Seeking financial advice is a good thing, but no matter who the advisor is or how smart someone is, your own money is more important to you than it is to them. So if you have someone else managing your money – whether a financial accountant, a lawyer, your bank, or whatnot, make sure you understand what is going on. (Johnny Depp anyone?)

I truly believe that anyone can learn to navigate their finances. We are just not taught to do so properly from an early age. If you don’t want to invest and trust the banking system, then go ahead and leave it there. (Inflation is a different topic). Yet, ultimately, don’t blame anyone else for your problems. Figure it out and live up to it.

Less Information Is Often More

Everyone and their grandmother can offer you heaps of information in today’s ever-online world. Me included. The problem is that there is an information overload. And yes, while there are a few people, media outlets and websites I visit to do my research and get a broader personal perspective on certain elements of finance, I do not react to financial news everyday, because each day you’ll have marketing moving pundits and gyrations with leaders, CEOs, financial analysts, editors and show hosts, telling you what to do, when to do it, and how it’s done, but ultimately, in my personal view, if you want to be rich;

– buy into high quality stocks,

– hold them for long periods of time

It is that simple.

If you buy a stock and sell based on something or someone you saw or read, you may be kicking yourself down the road. Look at Amazon when it was 7 dollars for years or Apple at 2 dollars in 2006 or Bitcoin in 2009. Had you put in just a few thousand dollars, your ROI would be absolutely amazing. Yet I know people that “listened” to others with that certain buy/sell strategy. Buy high quality, and invest on your terms.

Time Is Money – Say What?

How often have I heard this, and how often I have said it growing up, because whoever said that time is money had it wrong. You’ll read a lot about “Time” on my blog. It is the one nonrenewable resource you have. At any given moment, when your time is up, then your time is up.

So the trick here is to use that finite resource to do stuff you want to do, rather than working for other people telling you what stuff you have to do. Don’t get me wrong, not everyone is an entrepreneur or born into a wealthy family. Work is an essential part of life, but that is a separate post. Money is the resource that will allow you to do all those things you want to do. Fairly straight forward and something you already knew, right?

You might think this sounds a little crazy, but here is the trick. If you went out today and spent €200 on a pair of expensive shoes, well within a limited period, those shoes will be worn off and worth nothing. But if you took those €200 and invested it at an annual return of 12% (or even at 6%) and it compounded annually, than in 30 years you could have accumulated nearly €6000.

Hence, if we ignore inflation over that period you assume that €3000 at that time is enough for you to live on because everything else is paid for, then that means those €200 would be an extra 2 months of retiring early. That is 60 days of additional time.

I’m not saying you need to be completely frugal here. Enjoy life. Like I mentioned earlier, you never know when your time is up, however, do so as if you were to live forever. Maybe you really did not need those clothes, or you could have gotten something cheaper. Remember my comments above regarding look rich vs. be rich.

At the end of the day, it is your choice; stuff today or time tomorrow.

I find that those that choose the former are poorer than those who choose the latter. So the question is, what will you choose?

The Ways To Get Rich

Yes. And finally, I am going to give you the secret to getting rich. The wealthy do not want you to know this.

Seriously, there is no secret formula. Don’t point at others, but through all my reading, experiences, talking to people (rich people), and research the only ways you get rich are:

• You marry into money – don’t need to say anything else here.
• You inherit a lot of money – or here.
• You exploit a unique talent – Messi is arguably the most talented soccer player, but C. Ronaldo (I’m not a fan) is the harder worker and his pay check shows.
• Get exceedingly lucky – you coincidentally win the lottery, etc.
• Own or lead a successful business – Meg Whitman became a billionaire through her eBay stock options.
• Spend less than you make and invest your savings wisely – read this whole blog post.

It really boils down to those 6. While being rich doesn’t equate to happiness it does give you back a finite resource: time. So while you may be trying to aspire for one of the first five points above to get rich, focusing on the last one, like myself, will guarantee that down the road you will eventually get there in combination with all the steps above. I love seeing people become successful and utilizing time to achieve their personal goals. Money is part of that journey (unfortunately), however, I believe that anyone can achieve that time win based on their own personal wants in life.