As you work on your journey to become a millionaire, one thing you should realize is that the first million is the hardest million to make. It will take a lot of time and effort to get to your $1 million mark, but once you’re there, things will get easier! It takes longer to earn your first million is because you’re just starting out and you don’t have that much money working for you yet. The next million is easier because of the power of compound interest, and by that time, you have a million dollar bills working for you.
How to Get Your First Million
Among all the ideas out there, I think these three best ideas will catapult you to your first million:
I personally used all these three methods to get to my first million (obviously, I got rid of my debt first), specifically:
- I started investing early on in my career and maxed out my 401(k) and IRAs whenever I could.
- I bought my first house at the first possible opportunity…and I got lucky with timing since I bought it in 1998.
- I started this blog (my first business), which gave me a real boost financially.
The point here is you have to hustle and do everything you can (and not relying on just one method) to get to your first million.
Once you get to your first million, things will snowball from there…because you will have money working for you.
Let’s take a look at this scenario.
As you can see, the first million took 31 years in this scenario, but the next million took only 8 years, and the third took only 4 years!
This is not limited to investing. When you have money you can reinvest it to make more money. For example, you can reinvest money back into your business to grow it faster or use extra money to buy your first, second, and third rental property.
Why the First Million is the Hardest
The first million is physically, psychologically, and mathematically challenging. It is hard for people to break through this barrier. It is also mathematically challenging. Yet, people do it all the time!
According to research conducted by Thomas J Stanley, the author of The Millionaire Next Door, 80% of the millionaires are first-generation millionaire. This means they started from nothing, worked their way through the process, and broke through the $1 million barrier!
Yes, the first million is definitely the hardest unless you’re the 20% that inherited your first million; but you can be one of the 80 percent that are self-made, first-generation millionaires.
Pinyo Bhulipongsanon is the owner of Moolanomy Personal Finance and a Realtor® licensed in Virginia and Maryland. Over the past 20 years, Pinyo has enjoyed a diverse career as an investor, entrepreneur, business executive, educator, financial literacy author, and Realtor®.