How Quickly to Become a Millionaire

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An aim to become a millionaire is ambitious and thrilling at the same time. The goal requires specific work, planning, and commitment if a person does not have a significant initial capital or other tangible resources. This essay will discuss actions a person should take to get a million dollars most quickly from the perspective of financial accounting that can be helpful along the way of becoming a millionaire.

First, it is essential to look at the big picture to plan a budget and actions to get a million in net worth. It is possible to list all questions that should be answered before the beginning of planning. Some of them can be the following to understand what to do to become a millionaire: how much money will I earn monthly, how much cash can I save from the salary, and so on. As one of the initial steps, it is crucial to estimate all tangible and non-tangible assets and liabilities that should be put on a balance sheet.

For instance, a person can have zero obligations but has expenses coming every month that can be set in the liabilities section. Second, assets should be counted to estimate how much money can be put in savings or spent on investments. For instance, if my current assets are expressed in 10,000 dollars, I can put some of them in savings. I have a home that is a long-term saving that can be sold in the future at a higher price.

Further, it is necessary to develop an action plan for available savings. A strict budget means that a person needs to plan everything to be able to save and invest money. When you are aware of all your expenses, it will be much easier to control cash flows and make a significant contribution to savings.

It is stated that the majority of millionaires and billionaires make up a strict target budget, which specifies all future spending (Hoffower). Budget and expense accounting can be easily made by using specialized programs or an Excel spreadsheet that allows a person to track money flows and see by how much reality differs from the plan.

After creating a budget, it is crucial to assess the possibility of saving money from the salary and other sources. All free cash and current savings should be put on a bank with the highest interest possible to find in the market. It can also be agreed that the deposit will be without withdrawal option to save money from the short temptation to spend it on unnecessary things. Immediately after receiving a salary, it is necessary to set aside 10% on the bank deposit; it is possible to transfer this amount from a bank card automatically every month.

For instance, if my salary estimates 2,000 dollars, then 200 dollars will be put on the bank deposit that will accumulate a specific amount of money annually with an interest rate. It is stated that a competent specialist who regularly improves skills and tries out new ways to earn income can add about 5 to 10% a year to their salary (Heathfield). Thus, 220 dollars per month can be saved, and so on.

It is essential to monitor and increase savings and revenues continuously. When managing a budget correctly, it can be noted that some items of expenditure can be reduced, while monthly expenses always remain within the same limits. Therefore, not only 10% of your income can be saved but also some bonuses, parental assistance, and anything that goes beyond planned expenses and revenues. Planning for major purchases should also be included in the balance sheet as it requires a substantial amount of money.

The failure of household appliances or cars often comes unexpectedly for people. Thus, such situations should be planned by opening another deposit and transferring 5% of the income. Overall, savings can go up to 30% of the budget if planned and appropriately controlled.

Furthermore, to become a millionaire, one should find a source of passive income. Additional sources of income may give another 5-10% annually, according to sources (Rose). It is necessary to study the market and find a suitable niche. There are several tools on the way to become wealthy, such as revenue increase, cost reduction, and reasonable savings, accumulation of money, investing in assets that bring you passive income. Investing is a risk; therefore, a person should carefully check the reputation of the company before investing.

It is necessary to allocate 10% of the salary and savings to investment goals, but one should never risk an amount that cannot afford to lose. The principle of diversification, the distribution of money between different types of assets, helps reduce risks. Thus, a person can invest money in mutual funds, cryptocurrencies, buy shares of rapidly growing startups and government bonds, according to Rose. It is possible to monitor the financial and industrial markets closely, to withdraw or reinvest money when needed.

Planning and budgeting control are impossible without assumptions based on market situation and shifts. Noreen et al. suggests using budgeting assumptions that collect all data about future savings, revenues, and expenses in the balance sheet (392). This information can be evaluated based on three possible scenarios: positive, negative, and neutral, one to plan the budget and re-assess the data based on changes in the economy, personal status, and other circumstances.

Creating several views on the situation may help to reduce risks and ensure that cash reserves are stable, and the expenses would not increase significantly to affect the budget. Finally, the future earnings, costs, and investments can be calculated in Excel file with assumptions of inflation, interest, and discount rates, increases in salary, contributions coming from personal ideas that also can be sold.

To sum up, only relying on an initial 10,000$ and monthly savings of 400$ that I start with, it would be impossible to get a million dollars in net worth. If each year, my earnings will rise by 20%, and I will reinvest them in a portfolio of assets that would grow by around 20%, I will get 100,000$ in 5 years. It is suggested to search for investment options that would grow steadily through years, for instance, startups or property outside the US or Europe that grow by 100-300% a year (Tarver).

It is also possible to start a company by myself or to get a loan or assistance from relatives to speed up the process. The time of getting a million can decrease, and it should be included in the budgeting assumptions. Finally, keeping moving forward with a strategy and strict control of assets and liabilities will allow me to get a million dollars in 15-25 years. This amount will be counted without side expenses, which means that it will be net worth.

To conclude, one might say that if someone wants to make a million, they will first have to develop a plan and calculate everything accurately. If a person has a capital, earning a million with competent actions will be much faster. Proper planning, monitoring, and useful assumptions and conclusions can help to achieve the goal of becoming a millionaire quickly with stable growth of financial assets.

Works Cited

Heathfield, Susan. “The Scoop on Salary Increases.” The Balance. 2020. Web.

Hoffower, Hillary. “17 things millionaires do differently from everyone else.” Business Insider. 2020. Web.

Noreen, Eric, et al. Managerial Accounting for Managers. McGraw-Hill Education, 2016.

Rose, Jeff. “5 Ways to Generate Different Sources of Income.” Forbes. 2017. Web.

Tarver, Evan. “6 Investing Mistakes the Ultra Wealthy Don’t Make.” Investopedia. 2020. Web.

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How Quickly to Become a Millionaire

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