11 Mistakes Standing Between You and Your First Million
If you are like most people, you have probably dreamt of achieving millionaire status.
But is it actually feasible? Can you actually turn this dream into reality?
Over the past decade, the number of millionaires has been steadily increasing. According to MGM Research, the number of millionaires in the world stood at over 19.6 million in 2018, up from over 17.3 million in 2013.
It is projected that there will be over 23 million millionaires in the world in 2023, with most of them coming from North America, Europe, and Asia.
The above statistics show that achieving millionaire status is not such a far-fetched dream. If we currently have over 19 million millionaires, then this shows that you don’t really need anything special needed to become one yourself.
With enough focus, patience, and dedication, anyone can become a millionaire. Actually, according to GoBankingRates, close to 30% of Americans believe they will become millionaires within their lifetime.
While getting to millionaire status is certainly achievable, and while one in every three Americans believes that they will become millionaires in their lifetime, this does not mean that it is an easy thing to do.
Actually, the hardest part of becoming a millionaire is making your first million. After that, the rest of the millions come in a lot faster.
So, what can you do to reach your first million?
Well, there’s no surefire way of earning your first million, and there are more than a couple dozen approaches you can use to earn this first million, such as starting your own business, investing in the stock market, investing in real estate, taking a high paying job, starting a side hustle, and so on.
Regardless of whatever path you choose to follow towards achieving millionaire status, however, there are some things that can hold you back from ever making that first million. It is important to know about them so that you can avoid them.
Below, let’s take a look at 11 mistakes that could be standing between you and your first million.
1. HAVING THE WRONG MENTALITY
Several millionaires have mentioned that becoming a millionaire has a lot to do with your state of mind.
According to Avelo Roy, the CEO and Cofounder of Kiuqi, Director and CO-Owner of EEC Engineering in Kolkata, and Executive Partner in Pongworks, millionaires have a way of thinking and acting that is quite different from that of average folks.
This view is also supported by Napoleon Hill, who notes in his book Think and Grow Rich that people who manage to accumulate wealth think differently compared to the average person.
According to self-made millionaire Steve Siebold, to become a millionaire, you need to change what you believe and think about making money.
Whereas average people believe that making money and achieving millionaire status is impossible or out of their control, millionaires know that it is an achievable, and they believe that making such an amount of money is within their control.
Since they know that it is within their control to become millionaires, they then come up with concrete plans on how to make their first million.
The average person, on the other hand, has no plan on how to make their first million, because they believe it is impossible or out of their control.
After conducting interviews with 1,200 of the wealthiest people in the world, Steve Siebold noticed some common characteristics in the mentality of these people. Some of these traits include:
- Wealthy people believe that poverty, rather than money, is the root of all evil.
- Wealthy people believe that selfishness is justified sometimes, that it can actually be a virtue.
- Wealthy people are predisposed to action. They believe in taking action.
- Wealthy people are focused on acquiring specific knowledge.
- Wealthy people follow their passion.
- Wealth people are not afraid to have big dreams about the future.
- Wealthy people are not afraid of challenges.
- Wealthy people are not afraid of taking risks.
- Wealthy people are focused on earning rather than saving.
Therefore, if you want to become a millionaire, you need to change how you think about money and adopt the mindset that becoming a millionaire is both possible and within your control.
That is the first step towards making your first million.
2. TRYING TO BE A PERFECTIONIST
On the face of it, aiming for perfection seems like a great thing. If you start your business at the perfect time, you will achieve success.
If you come up with the perfect product, you will have customers flocking to you. If you invest at the perfect time, you will double or triple your income in no time. The only problem is that perfect does not exist.
The only way to know if this is the perfect time to start your business is to jump right in and see how the market reacts.
The only way to know if you have a perfect product is to launch it and see how customers react to it. The only way to know if it is the right time to invest is to invest and watch how the market goes.
Of course, I am not telling you that you should invest, start a business or launch a product without carrying out any research.
However, there is only so much research you can do.
Some factors will always remain uncertain, and the only way to be certain is by getting your feet wet. If you wait for the perfect moment, you will never get started.
Therefore, instead of waiting for perfection, jump right in and make adjustments as you go.
This is what most of the world’s millionaires did. When starting SpaceX, Elon Musk did not wait for perfection.
He simply set out to build rockets that could be reused, and he almost went broke trying to build the company. Had he waited till he had the perfect rocket, we would have no SpaceX today.
Similarly, Dropbox didn’t wait until they had the perfect product to launch.
Instead, Dropbox cofounder Drew Houston started by posting a video explaining how Dropbox would work, he got a ton of comments and feedback from interested users, and then used this feedback to create the product. If he had waited till he had a perfect product, we would have no Dropbox today.
Just like Elon and Houston, stop waiting for perfection. Instead, just get started and make adjustments along the way.
3. SPENDING EVERYTHING YOU EARN
What would you do if you just started earning a 6 figure paycheck?
For most people, this would be the perfect moment to go out and buy something they have always dreamt about – a luxury car, taking a mortgage on an expensive home, and so on.
If you are anything like that, you will probably find it very hard to become a millionaire. If you start spending all your money on expensive things, you will be on the fast lane to financial rock bottom if your job happens to end abruptly.
Think of all the sports stars who went broke after they retired, such as Allen Iverson, Mike Tyson, Diego Maradona, and Antoine Walker. Despite making hundreds of millions during their playing days, these people went broke after they retired.
Actually, a Sports Illustrated article from 2009 reported that within two years of retirement, 78% of former NFL players find themselves in financial difficulty, while 60% of former NBA players are broke within five years of retirement.
While there are several factors behind this, one of the most common is that most of these people spend most of their earnings on unnecessary things.
People who make it to millionaire status know the importance of living within their means. They don’t spend everything they make. Instead, they save that money.
For instance, you might be surprised to learn that billionaire Warren Buffet lives in the same house he bought for $31,500 five decades ago, does not drive a luxury car, and spends no more than $3.17 on breakfast.
Similarly, Facebook Founder and billionaire Mark Zuckerberg drives an Acura TSX and a VW GTI, both of which are valued at around $30,000.
Despite having so much money, they don’t feel the need to buy ostentatious cars or houses, because they understand that being wealthy is about showing up, not showing off.
While you need to save much of what you make if you want to become a millionaire, it is also good to note that you cannot save your way to millionaire status.
Therefore, don’t just save money for the sake of it. Instead, you should save to invest. You should always be looking for ways through which you can incrementally increase your money.
4. SETTING UNREALISTIC EXPECTATIONS
If you do a quick Google search, you will find lots of stories about businesses that became highly successful in record time.
Such stories receive a lot of press attention, because they are seen to be highly motivating.
However, for every such story, there are thousands of businesses that grew slowly, or companies that failed.
Unfortunately, this tendency to only focus on quick successes can result in many first-time entrepreneurs creating unrealistic expectations about their businesses.
These unrealistic expectations cause many would-be-millionaires to quit when success doesn’t come as fast as they expected.
While having big dreams is a prerequisite to becoming a millionaire, those who actually make it to millionaire status know the importance of setting realistic expectations. They don’t start a business and expect it to hit a billion dollar valuation within one year.
They know that success takes time, and that they are not going to make their first million overnight. They don’t quit when they make only a little progress, because they know that such progress, when made consistently, will get them where they want.
A good way to keep your expectations realistic is to join online communities, social media groups, and in-person communities of other business owners.
Stories from other business owners about their experiences, challenges, and triumphs will give you a more realistic picture of what it is like being in business.
From there, you can set realistic goals for your business that are not based on the last fancy article you came across.
5. FOLLOWING OTHERS BLINDLY
If you want to quicken your journey to millionaire status, it is a good idea to look for mentors and regularly read or listen to words of wisdom from those who have already made their millions.
Doing this can help you gain useful insights and avoid mistakes that you would probably have spent years undoing.
Still, it is also important to realize that just because something worked for them, this is not a guarantee that it will work for you.
Remember, the conditions under which they started their business or made their millions might be quite different from the conditions you are facing right now.
For instance, just because Airbnb was able to grow its user base by poaching customers from Craiglist, there is no guarantee that the same approach will work for you.
Therefore, don’t just follow someone because something worked for them. Instead, take the time to understand your business and industry, and only pick strategies from others if there is a chance that they will work for your business or industry.
6. RELYING TOO MUCH ON CREDIT
Sometimes, it is impossible to run your business without credit. Sometimes, taking credit might even be the key to growing your business. However, don’t become too reliant on credit.
You should be very smart with how you use credit, otherwise you might easily find yourself struggling with huge credit card debt.
Most credit comes with high interest rates, and instead of growing your business, you might be spending all your earnings paying off these high interest rates. Of course, this will make it harder for you to get to millionaire status.
7. NOT THINKING LONG-TERM WHEN PLANNING
If you talk to people who have already accumulated huge amounts of wealth, one of the things you might notice is that most of them plan for the long term.
They have 5 year, 10 year, 20 year, and even 30 year plans for their businesses and their lives.
Having such long term plans makes it easier for them to anticipate and deal with obstacles long before they become problems.
Sometimes, they might even make decisions that seem detrimental in the short term, but which actually help them accomplish their long term goals.
If you want to quicken your journey to millionaire status, you also need to adopt this mentality and start thinking long term when making your plans.
Whether you are investing or starting a business or looking to increase your income, don’t just think about the next couple of months.
Think about 5, 10, or 20 years from now.
Remember, you won’t become a millionaire overnight, and the earlier you plan for the future, the easier it becomes for you to get there.
8. SURROUNDING YOURSELF WITH THE WRONG PEOPLE
Whether you realize it or not, the people you choose to surround yourself with have a huge impact on your life.
Actually, if you look at five of your closest friends, you will realize that your net worth is around the same level as theirs.
According to self-made millionaire Steve Siebold, being exposed to people who are more successful than you can potentially expand your thinking patterns and lead to an increase in your income levels.
Remember, we saw earlier that millionaires have a different mindset towards money compared to the average person, and hanging around millionaires can help instill this mindset in you.
People who have managed to get to millionaire status are very careful about the people they associate with.
They don’t surround themselves with the naysayers or pessimistic people who believe that it is impossible to go after and achieve your dreams.
They know that associating with such people will dim their drive.
Instead, they deliberately surround themselves with other positive people, people who are passionate about their dreams and have the drive to go after these dreams.
9. TRYING TO DO EVERYTHING BY YOURSELF
For most entrepreneurs, there is that temptation to wear multiple hats and try and do everything by yourself. This is especially common when you just launched a startup and do not have the money to hire people to handle various tasks.
Sometimes, this need to do everything yourself is brought about by the desire to make sure everything is done well, since mistakes at this stage can be potentially crippling to your business.
Still, it is good to note that this is unsustainable in the long run. You cannot be a jack of all trades and hope to do everything effectively.
If you want to grow your business and use it to reach your million dollar dreams, you need to learn how to delegate and outsource various tasks.
Obviously, you cannot be good at every single thing, therefore you should find talented individuals and hand over the tasks you are not strong at to them.
This not only ensures that the tasks you are not good at are done well, it also frees up your time so that you can wholeheartedly focus on what you are good at, as well as tasks that will help improve your business’ bottom line.
Aside from hiring individuals who are talented at tasks you are not good at, you can also partner with a cofounder who has skills that are complementary to yours.
The point here is to leverage those around you to push your business beyond your own skills and abilities.
10. NOT BEING AT THE RIGHT PLACE AT THE RIGHT TIME
Putting yourself in the right place at the right time is one of the most important factors that influence success.
For instance, when he started Facebook, Mark Zuckerberg moved to Silicon Valley because he knew being here would give him access to what he needed to grow his company – brilliant engineers, venture capitalists, and so on.
Similarly, when starting Amazon, Jeff Bezos moved to Seattle because he knew the city would give him access to the kind of talent he needed to build his company.
However, becoming successful and attaining millionaire status is more than a matter of physical proximity. Placing yourself in the right place at the right time only gives you access to opportunities.
If you want to make it big, you must be prepared to take advantage of these opportunities, and then once the opportunities present themselves, you have to seize them and make the most of them.
For instance, let’s assume your CEO invited you for lunch one day.
In such a situation, an ordinary employee will simply go have lunch, talk about the weather and the food, and then go back to their desk.
However, a prepared employee will take this as an opportunity to tell the CEO about his or her ideas on how to improve the company. For such an employee, this moment could turn out to be a breakthrough for his or her career.
The above example shows the importance of being prepared. Same scenario, two different employees, two different outcomes.
If you are not prepared, being in the right place at the right time will be of no help to you.
Aside from being prepared, you should also learn how to recognize opportunities and take action when they arise.
11. NOT BELIEVING IN YOURSELF
Sometimes, what might be holding you from making your first million could be your lack of belief in yourself.
If you want to become a millionaire, you need to be confident in yourself and your decisions.
Don’t second-guess yourself so much. Instead, once you have analyzed the information you have, just trust your intuition and go ahead with your decision.
The problem with having doubts about your every decisions is that it breeds fear and inaction.
Instead of moving ahead with your plans, you continue waiting, trying to gather more information or gain more insights from your friends.
However, you will never know if your decision is the right one if you don’t implement it.
If you want to become a millionaire, you have to adopt Sir Richard Branson’s attitude of “Screw it, let’s do it!”
You need to stop caring about what people think of what you are doing. You need to stop being afraid of failure or thinking that you don’t have what it takes to do it.
You have to learn to trust your guts and go out there and start taking action. That is the only way to make that first million, and the many more that will come thereafter.
The bad news is that making that first million might prove to be quite a challenge.
The good news is that, with enough patience and dedication, anyone can do it, and once you have made the first million, it will be a lot easier to move from there and make many more millions.
While I cannot tell you the easiest way to make your first million dollars (there are numerous paths to a million dollars, each of which works best for different people), I have shared with you 11 mistakes that could be standing between you and your first million.
While avoiding these mistakes does not guarantee that you will become a millionaire, avoiding them while consistently putting in the work will definitely make your journey to becoming a millionaire a lot easier.
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