You are not a millionaire because you earn a million a month. You are a millionaire only if your networth is over a million naira (or whatever currency).
There are people who earn a million monthly and are not millionaires. There are people who earn N250,000 monthly, yet are millionaires. People in the former category/class look like millionaires, while those in the latter class may not appear to be, but actually are.
The difference is a matter of what you do with what you earn, not how much you earn or how glammed up you look.
There is a 3rd category: those who look like millionaires and actually are. This is a solid place to be. This is the peak you arrive after dedicated time of managing your money well.
The trick is to actually become one. To do that, you need to spend a significant portion of your income on assets – tools and instruments that generate income for you. Those ones that compound your returns are the best. For example, shares in solid companies, mutual funds (set it up so your returns are ploughed back in), a viable business idea of yours, etc.
This is how millionaires and billionaires are made, besides inheriting a windfall from a family or some other benefactor. Of course, we know some steal their way up, but that’s not our path.
Do you want to be a millionaire? Get to work.
But becoming a millionaire in networth is only half the journey. Let’s assume that all your investments give you a 12% return each year, a million naira in networth will mean that they generate only N120,000 a year. Can you live on that? You and I already know the answer. It was a rhetorical question.
My point is that after having a million naira in networth, you cannot afford to kick off your shoes and relax. You still cannot live off your investments. N120,000 annually is only N10,000 monthly. Hian. If your monthly expenses total N500,000, you need to grow your assets and investments to the point where they generate you N500,000 monthly.
When you get to that point, you are safe. That means even if you stop working and retire, there is now enough coming in monthly to keep you bubbling. Financial freedom is not about how much you have; it is about how much what you have puts in your pocket each month.
That is where we all need to get to. You do not want to still have to hustle in your old age; do you? Get to work. Use your time judisiously. Spend your money wisely – spend on things that will build you a networth you can live off.
I look forward to seeing you at the top.