The idea of becoming a millionaire is a pipe dream of many. However, it can seem so unattainable that many people don’t give it a second thought.
People go through their lives envious of their wealthy peers’ net worth.
And, they end up living their lives from paycheque to paycheque, week to week, moving further away from finding their feet on easy street.
This doesn’t have to be you!
If you’re wondering how to make a million pounds and become a millionaire, it’s never too late to take control of your own money to make it work for you.
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You can explore avenues that can stop you from losing money and steer you right towards financial freedom.
Instead of wallowing in financial misery, you can make tweaks to your spending habits, start investing smartly, and establish side hustles to make your dreams of financial security a reality.
Becoming a millionaire doesn’t happen overnight: it takes lifestyle changes and commitment to achieve.
Have you ever tuned in to hear Chris Tarrant or Jeremy Clarkson ask the age-old question of ‘Who wants to be a millionaire?’ and wistfully responded with ‘me!’?
Well, this article aims to help make the dream of attaining the ultimate jackpot a reality.
And when you think about it: when 1 in 65 adults in the UK are a millionaire, you could be next!
Making a million pounds without wealthy backers
To be born into wealth is not as satisfying as making a million pounds from the fruits of your own labour.
For the most part, the born-wealthy have no idea how to appreciate dough fully. Spending carelessly, many born-millionaires gradually, over time, whittle their inheritance down to next to nothing.
You have the advantage of knowing what it’s like not to be a millionaire.
You also know how to properly budget or may be all too familiar with what happens if you don’t.
This gives you a clear cut advantage in the pursuit of a million pounds, as it gives you something to strive towards with added enthusiasm.
The first step to being a millionaire is not envy those with wealthy backers, who only know what it feels like to be financially secure.
It’s far better to become a millionaire than to lose the inheritance you were given!
The change starts with you
The second step in becoming a millionaire is to define what changes need to be made to yourself.
I mean, if you’re reading this article, you might not have the intrinsic characteristics of a multi-millionaire.
But that doesn’t mean that you can’t re-tune yourself to get them.
You’re going to have to want it.
You need to allow this pursuit to take over all parts of your life.
Be prepared to sacrifice hobbies, holidays, and other creature comforts that delay your progress towards reaching the dream.
Get in the millionaire mindset
To think like a millionaire is to be a millionaire.
Millionaires who started with nothing once had a vision of becoming what they are today.
The vision may have developed over time, but it invariably consisted of becoming rich and staying rich through their own means.
Luckily, imagination is free, and you, too, can unlock your millionaire mindset.
Create visions for yourself of what life will be like once your million is reached – easy living, working less, being a catamaran owner. Listen to songs about money to envisage you having it.
Then be sure to think of them whenever working overtime, budgeting, or saving becomes too strenuous.
For these visions to work, they have to be sincere desires – things that you genuinely want.
Another way to get into the millionaire mindset is to come to terms with the fact there is no rich quick strategy you can apply to your lifestyle to reach the big haul sooner.
Patience is a virtue, and this cliche is no more appropriate in any circumstance than with regards to a money-saving ambition.
Four good money habits to practice
Budget monthly (and stick to it)
Monitoring your personal finances may seem like an obvious tip when it comes to saving money.
You’ll be surprised by how much money you’re losing by not setting yourself a monthly budget.
Not strictly taking notes of your income vs outgoings is a mistake people often make in the pursuit of wealth, as they fail to identify where their savings are draining out.
Curb your spending
To budget better each month, you need to identify all potential money wasters and work out how to stop spending money.
This can be a simple case of pinpointing the luxuries you can go without. Then, either remove them completely from your spending list or find a way to get them cheaper.
The most apparent luxuries are activities associated with your social life: expensive dinners, holidays, and recreational activities.
A millionaire may relish in such activity once he’s made his cash, but in the meantime, it’s best to decline that dinner invite and postpone that holiday to the Maldives.
You should also consider your electronic financial commitments.
For example, in the age of streaming services like Netflix, are you getting the most out of your Sky box?
You can extend these considerations to applications – are you getting your money’s worth out of music streaming apps like Spotify, online magazine or newspaper subscriptions?
These may seem minor, but they add up over a few years and can seriously hinder the progress of your money-saving scheme.
Working wise should be a top priority in pursuing money – no matter your end goal.
Working smart essentially means monetising your graft to the max.
It means using your initiative to waste as little time as possible in your work environment. Aim to profit from every second of your working day.
It also means asking for a raise, striving towards a promotion, switching to a higher-paying company, and working overtime.
In other words, anything that will increase your monthly cash flow and increase the amount you can put towards savings.
Save, save, save
The thing with money is that when we fall into an abundance of it, our immediate reaction is to think of how to spend it.
Getting a bonus from work, winning cash prizes, or coming in possession of other unexpected money may make you want to spend big.
You’ve been working hard, so why not just take it easy and treat yourself?
A millionaire mindset would dictate that you must save all extra money coming in, and refrain from the human instinct to spend, spend, spend.
Although it’s not just about saving money, it’s about saving money smartly.
Putting your money away in a savings account with low-interest rates is not a wise decision. Your savings barely add anything to your profit, and your savings stagnate.
On the other hand, saving wisely would be investing in stocks, bonds, or property – more on this later!
Steps toward making a million
Clearing your debts
It’s best to clear debts before you start saving towards a million in earnest, as bad debt could puncture your progress at an inopportune time.
Focus on clearing credit card debt first, as APR can accumulate significantly, and then pay off loan repayments and any other debts you may have.
As much as saving towards a million pounds is about cutting down on luxuries, it doesn’t mean you have to stop having fun outright.
There are many ways you can save money while having fun – including getting creative with your copper coins!
Check out our 1p Saving Challenge, and find out how you can turn loose change found lying around the house into £650 in a fun and inventive way!
Besides profiting from side hustles and investments, you’ve obviously got to put away a large sum from your main wage every month.
Generally, we’d recommend saving between 15-20% of your wage each month to make a million pounds.
You should start investing as soon as possible to cut the amount of time it takes to make a million pounds.
Don’t rely on savings accounts and interest rates to accumulate your fortune.
Invest as little or as much as you can each month, and watch your money grow exponentially through compound returns.
Once you hit that magic number, the interest on 1 million pounds alone will provide you with a hefty return.
Understanding your investment options
The reality is that many money-savvy would-be millionaires simply don’t earn enough spare cash from their 9-5.
Even if you could save £1,000 a month, it would likely take you three decades before you even hit millionaire status, and that’s with a compounding interest rate of over 8%.
This is why you need investment options on top of living frugally to make a million pounds.
Here are some of the moneyspinners that established millionaires have directed their focus towards:
The stock market has long been a go-to investment point for those seeking to replenish their personal finance.
It’s also a way of potentially securing an incredible 1 million by retirement age – or, hopefully, a lot sooner.
There are several ways you can invest in stocks to turn over steady returns, including App Trading, Options Trading, and CFD trading.
You can read more about our tips for investing in stocks!
With government bonds, you can invest money in the government for a set amount of time, over the course of which you will be paid back interest coupons.
You can either decide to keep this bond on for the duration of the agreement or sell it on the London Stock Exchange.
If you decide to keep it on as a long-term investment, the original money you invested will be returned to you at the end of the term.
Mutual Funds and EFTs
If you’re not confident with stocks, why not let a professional handle it?
Mutual funds and EFTs operate as pooled investments, where your money is combined with contributions and, in turn, invested into prosperous stocks and bonds by a financial professional.
This is a good way of keeping your portfolio balanced, as your money is put towards an array of different companies and products.
Treat your retirement plan as you would an investment: make sure you’re putting money in an affordable retirement plan and that shows healthy signs of investment growth over time.
Whether residential, industrial, or commercial, investing in real estate holds several benefits, from high rental returns to stability, and can be your crowning piece to your investment portfolio.
When it comes to real estate investment, there are several avenues that you can consider.
The benefits of investing in real estate
Real estate is a good investment because you can profit both from rental income and the increased value of the property over time.
Another benefit is that there will always be an interest in real estate.
Where an unexpected stock market crash may plummet your other investments, owning property will always be a valuable commodity, as property is always needed.
The UK population is constantly growing, and there will always be a long line of students looking to rent their first flat.
A further benefit is that your properties may benefit from gentrification.
Buying property while it’s cheap and watching the neighbourhood that surrounds it get redeveloped and become more opulent is the dream outcome of any landowner, as it means they can charge higher for rent. In contrast, the property itself jumps up in value.
Starting your own business
Starting your own business and becoming self-employed may seem like a daunting task.
However, if carried out successfully, becoming your own boss could help you make a million pounds.
Why start your own business?
Gaining limited company status will bring you closer to financial freedom than working for somebody else.
You may find that lenders are far more generous towards small businesses and may even offer other benefits such as late repayments and low-interest rates.
Going solo also means that you can establish your own family business, which ensures stability, mutual interest, and flexibility.
Benefits of being a business owner
Being a business owner means that you can set your own boundaries, hours, and responsibilities.
You can even get going by running a business from home, which reduces your overheads.
Making a million will be far more manageable as a business owner, as you’ll be working for a company that is organised to your preferences and work habits.
Being a business owner is investing in something you are passionate about, but it also means that you don’t have a leering boss watching over your every move.
Whether you want to take a passion and learn how to start a clothing business, get hands-on and start a cleaning company, or perhaps start a genuine work from home job where you’re your own boss, it’s never too late to take the plunge.
The main issue of starting your own business would be the waiting time it takes to get the project off the ground.
Although this endeavour is part of the pursuit of making a million, your expenditures may exceed your income at the start of the project.
Making a profit may take time, but you can make back all the money you invested with persistence.
Another issue is that the project may take over your life.
Many business owners struggle to balance home and work life as the lines blur.
The right approach to starting a new business
The right approach to starting a new business is to be prepared for the long haul.
Nothing in becoming a business owner happens overnight, and it requires patience, persistence, and continued interest in the field you are working towards.
Long hours are expected, but the payoff will be worth it.
Worthwhile side hustles
Taking on a side hustle is a rewarding and fun way to acquire more money on top of your regular salary.
As aforementioned, on the long road to becoming a millionaire, you’ll have to persistently refrain from costly recreational activity, whether that be a holiday or a trip to the cinema.
This might be a daunting prospect, particularly for extroverted types.
Picking up a worthwhile side hustle will not only expand your nest egg but can double up as a void-filling hobby.
Take the time to consider which of the following side hustles you could turn into an agreeable pastime.
Affiliate marketing is where you earn money off commissions through advertising for a company.
As an affiliate to the company, you add product links to your blog and social media accounts and drive clicks, sales, and general interest in a specific product, range, or service.
Here are the best affiliate networks to earn in the UK.
Blogging takes a lot of confidence and commitment, as you have to write about a topic you are passionate about at length to generate a following.
It can take a bit of time before you start turning a profit from your content, although the initial start-up costs are really low.
You can start to get advertising revenue and affiliate marketing from very early on, even with a small audience.
Although we’ve not made our millions (yet), starting a blog has given the two of us an income in a growing market.
Our top tips for smart investing
The top tip that any experienced investor will tell you is to acquire a balanced portfolio.
Make sure you invest in something else that guarantees a return with every risky investment.
Don’t put all your eggs in one basket in the hope it comes through – invest smartly!
Start investing today.
Although there are good times and bad times to invest, you could end up sitting on your money for years, waiting for the right time to arrive.
Set yourself an investment plan and start riding the wave.
Study the market daily.
The market can be erratic, and a profitable investment one day can sharply become a cause for concern.
When investing big bucks, you’ve got to become obsessed with the main assets in your portfolio to avoid significant losses.
Common mistakes to avoid
A common mistake is to follow the lead of peer investors.
Your investment plan should be unique to you and determined through personal market research.
Don’t jump on hype investments, as the hype usually is indicative of an impending crash.
Another common mistake would be panicking.
When depreciation occurs, however slight, many take to panicking and reorganising their portfolio completely.
Reading the market becomes easier over time, but a slight depreciation can often lead to a healthier recovery.
It doesn’t take a lottery win to make one million pounds, although I guess you’d pay less tax on a lottery win?
You can explore countless avenues, some of which may lead you closer to financial freedom, while others may help you make a beeline straight towards the jackpot.
Just as it is important to create a balanced portfolio when investing, it’s also imperative to try several avenues detailed in this article to find which works best for you.
Try affiliate marketing or blogging while you start your own business, or try investing while you curb unnecessary expenditures – see if you can strike lucky with a million-dollar combination.
Making a million pounds generally takes a lot of hard work over a long time.
You can, however, speed up this process by curbing unnecessary spending, working smarter, and setting up a profitable side hustle for yourself, such as affiliate marketing.
You can make millions at home by establishing your own side hustle.
To be considered a millionaire, you must have a million pounds worth of savings, investments, or other assets.