How to explode your wealth beyond what you ever imagined was possible!
by Your First Million
Believe it or not, there is an actual formula for growing wealth. In all reality, it really is quite simple. Now don’t get confused between me saying that the formula is simple and that building wealth is easy. It is not going to be easy no matter which way you slice it; it’s going to take a lot of hard work, persistence, risk taking and a just little bit of luck.
At the same time, the process itself is simple and easy to follow once you have it down and know it like the back of your hand. In this post I am going to lay out this simple formula for building wealth so that you can be well on your way to making your first million.
Increase Your Income
I think it is pretty obvious that for most people, becoming a millionaire means you need to be making more money than you are right now. But how do you make more money? Even if you were to ask for a raise at work and actually get it, it’s not likely to be a significant enough raise to get you to the millionaire status by itself.
So what options do most people have when it comes to increasing their income? ANY WAY YOU POSSIBLY CAN!
That’s right. You may not have many other options than to bootstrap your way to increasing income. It can definitely be difficult for a lot of people to figure out ways that they can bring home more money. Get out a piece of paper, go sit down somewhere quiet and start brainstorming what you can do in your spare time to generate more income (both inside and outside of your current job).
The founder of Marriott International, J. Willard Marriott, once famously quoted:
“No one can get very far in this life on a forty-hour week.”
I read this quote in his biography Marriott: The J. Willard Marriott Story by Robert O’Brien, and Mr. Marriott couldn’t have put it in a better way. Everyone likes the idea of becoming a millionaire, but not many people are willing to change what they are currently doing to make it happen. They keep working their 40 hours per week at their job but they don’t do anything else… then they wonder why they are getting ahead.
One of the best ways to increase your income is to start a side business that you can operate in your spare time from home. Often a small home based business can be very inexpensive to start and sometimes it can even be free to start.
To use as an example, my brother bought a pressure washer from Costco to use around the house. While I was on a vacation in Hawaii, my brother and his wife stayed out our house to house sit for us until we returned. While he was at my house, he used his pressure washer on my concrete patio in the backyard which had gotten muddy from the dogs. He also sprayed down the stucco on the side of my house which had also gotten some mud on it.
When I returned from vacation, he showed me the patio and the side of the house and they looked amazing! I told him that this could be an easy little side business for him. Many people would be happy to pay a small fee to have their homes, patios, walkways etc. washed down with a pressure washer.
Since that time we talked about him starting a side business, he regularly posts local ads on craigslist for “pressure washing services” and usually gets several jobs per week and has been bringing in an extra $400-$600 per month. He is now considering buying a couple more pressure washers and hiring a few people on the side to do more jobs for him. Do you see the direction where this is starting to go? It all started with a $200 pressure washer.
There are countless ways you can increase your income, you just have to get a little creative, bite the bullet and get out there and hustle. Go get that extra $500+ per month and don’t spend a dime of it. Stick that money straight into savings as if it did not exist.
And who knows, you might just be surprised. Sometimes a side business starts making enough money to consider making it a full time business. Just do what needs to be done whatever that might be.
RELATED ARTICLE: Treat Your Personal Finances Like a Business
Keep Your Expenses the Same. Do Not Allow Them to Creep Up On You
I am just going to throw it out there to use as an example. Between my wife and I our household gross income for 2016 was around $240,000.
We live in a 1,248 square foot, 3-bedroom home that we bought for $195,000 back in 2013. Our mortgage payment is $1,177 per month. We don’t need a big house right now. We have a 1-year-old son and 2 dogs. We are fine right where we are. At times it feels a little tight, but it works for now.
Sure it would be nice to go buy that 3,000+ square foot house for $600,000 up in the hills, which we could afford by the way, but we are more focused on stashing away more than 40% of our income instead. This is the mentality you need to have if you want to become a millionaire.
Do not spend what you don’t need to spend. It is okay to budget in things like a date night, movie night or to just buy something you want once in a while. It can be argued that some of these things are needed to a degree. Just make sure it is part of your budget and you are not increasing your expenses on these things as your income increases.
You see, as your income increases and your expenses stay the same, your cash flow increases! This is when you really start to see your wealth building explode!
Follow this simple formula long into your wealth building journey and eventually your income will far exceed your expenses… so much so that it won’t really make much of a difference if you double, triple or quadruple your expenses.
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