Doesn’t it sound and feel right to be called a millionaire and have at least N1 million in your account? Though it sounds far fetched to the average salary earner, artisans and petty traders, but it is possible and achievable. No matter where you are in your saving and investing journey, following these tips will boost your millionaire potential.
Invest early and often
Investing is key to reaching your million-naira savings goal — and the sooner you start, the better. “On average, millionaires invest 20% of their household income each year,” writes personal finance adviser Ramit Sethi in his book, I Will Teach You to Be Rich. If you can’t invest that much, then start smaller. Choose a percentage of your income and invest it regularly — every month or every paycheck — using automatic withdrawals from your bank account. Consider investing through an automated investing service, which will do the heavy work for you. Auto-investing puts your money into a diversified portfolio with just the right amount of risk and uses computer algorithms to protect you from market hiccups. You just sit back and watch your savings grow.
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Get an extra source of income
In present-day Nigeria, a single stream of income is not just enough, look for other sources of income. The more you have to invest, the faster you’ll reach your million naira target. Seek out opportunities to make extra cash, whether it means working freelance in your field or picking up a side gig in a different industry altogether. Many people use a second job as a creative outlet. If you drive your own car, instead of going home alone with empty spaces in your car, pick passengers from designated bus stops, which will cover your fueling cost and earn you some extra cash. You can also drive people on your own schedule with Uber, just get another stream of income.
Live below your means
Interviews with millionaires show that frugality is one of the most common traits shared by people who stay wealthy for life. On their way to the top, millionaires are often likely to drive second-hand cars, buy small houses and purchase only as much clothing and other goods as they need. As they begin to earn more, they don’t spend more — instead, they invest more in stocks, businesses or themselves (maybe by taking classes). They live below their means, and you should, too. To grow your money like a millionaire, review your spending habits and decide what you truly need and what you can do without. As you cut costs, put more money into investments or a high-interest savings account.
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Be wise with debt
Debt is a part of life — but some debts are better than others. “Good debt” will ultimately benefit you financially; an example of good debts is mortgage loan. Since real estate appreciates exponentially, investing or borrowing for real estate purposes is not a bad idea. Good debt often comes with lower interest rates, so you can pay off what you owe without incurring costs.
You take on “bad debt” for things that won’t increase your wealth and have no lasting value. Credit cards can be a form of bad debt, which tends to come with higher interest rates and can mess with your credit score. Avoid bad debt: Use credit and short-term loans sparingly, and pay off those bills as quickly as you can.
Invest in real estate
Investments in commercial real estate have tended to perform at least slightly better than stocks (as measured by the S&P 500) over the last 15 to 20 years. To get into that game, you don’t need to take out a second mortgage to buy commercial space — and then find a business that will rent it. Instead, you might invest in real estate through a crowdfunding arrangement. To reduce risk, choose a reputable crowdfunding investment firm to ensure you put your money into legitimate projects that will actually get built.
