Episode #66: My Millionaire Blueprint
Today’s episode walks you through the strategy I’m using to work towards becoming a millionaire one day, and I wanted to share this with you because this is a strategy that literally anyone can use. This is absolutely not a get rich quick scheme, this is a long term wealth building strategy for people earning a normal salary. Unless I come into a massive business success, an inheritance from an unknown wealthy relative, or figure out how to go back in time to 2020 to enjoy the rise of some obscure cryptocurrency, this is the long term plan I’ll be using to eventually become ‘work optional’ with millions of dollars of assets.
Follow along with this 3 step plan, and simply adjust it for your numbers. Be diligent about sticking with this plan unwaveringly for years, and of course, always keep an eye out for the next great business idea or an elderly childless duke somewhere in your family tree to help speed you along.
Step 1
The very first step to being successful with this plan is to live well within your means. Literally none of this will work if you don’t stay diligent about living within your means and consistently spending less than you’re making. That’s why this is now, has always been, and will always be step one of the wealth building blueprint.
I spend significantly less money than I earn, and right now I’m not paying myself a very high salary from my work. Every dollar that I don’t spend goes towards my retirement investing accounts. From day one of running my own business, saving has been a priority, and maintaining a 20% savings rate has always been a non-negotiable.
The way I’ve accomplished this is by being diligent about tracking my expenses once a month, making sure I don’t let lifestyle creep eat away at my income as it’s increased over the years, and by reflecting on my expenses to get really clear about what my financial values are.
This spending according to my financial values is key, here’s why:
Values based spending means there are things in my life that I love spending money on. They make me feel like I’m living my happiest and most fulfilled life. On the other hand, there are things that I wouldn’t dream of spending money on because my millionaire goal and ability to be work optional one day trumps it every time. Spending on travel a few times a year, absolutely. Spending on a giant wardrobe, makeup, and a hair and skincare routine, absolutely not. Spending money on beautiful fun ingredients at markets to cook with and feed my friends and family, absolutely. Spending on ordering in because I’m tired after work and can’t come up with a meal idea? Definitely not. And so on and so forth.
To learn more about expense tracking and values based spending make sure you check out the whole course I teach on the subject.
Step 2
Step #2 is to continue to diversify my income. I think by now we’ve probably all heard the phrase that ‘the average millionaire has at least 7 streams of income’ and I cannot tell you how important this is to building wealth!
If you spend your entire life only earning money through your traditional paycheck, you will literally never be able to stop working. Unless you have a huge salary and a tiny living expense the numbers simply don’t work! You need to diversify your income streams, which is something I’ve been working on for years and will continue to work on.
My main income streams that I’m actively focused on managing right now come from my three businesses. I’m self employed, I have three business that are in various stages of growth, development, and maintenance, and I’m going to continue pouring my heart into these businesses.
From there, some of my other income streams come from earned interest, dividends from investments, and investment growth. What this means is: I’ve taken the money that I’ve saved so far, and I have it working for me and earning money more or less passively while I’m out working on my other businesses which are my more active streams of income. So you can see, right off the bat, I have 6 streams of income already, and that’s not even breaking down the different income streams within each business.
Step 3
Step 3 of the millionaire blueprint is investing your money for stable, long term growth. Like I said before, this is not a get rich quick scheme! I’m not going all in on crypto, or anything offered by monsieur Elon Musk. I’m taking the route of a static and boring investment portfolio that should return me somewhere between 10-11% annually.
I’m currently focused on putting as much of my savings as possible into my RRSP and my TFSA accounts each year. I invest the money, and I intend to never have to touch that money again until I want to stop working. Over time as that money is invested in the stock market, the value of it will grow and compound. Through compounding, I will end up with way more money in those accounts than I myself actually put into them, and this is the very basic overview of the wealth building strategy that everyone can and should use.
One of the most important things is that I know that I’ll never have to touch these accounts or take that money out before I’m supposed to, because I have an emergency fund that acts as my safety net. This part of the plan doesn’t work if you have to constantly draw down on your investment portfolio (and risk selling investments at a loss) to pay for unexpected life expenses. Make sure you build some level of financial security first (a 3-6 month minimum emergency fund), then start investing and using this to diversify your income.
Overall, If I continue following this plan for a few more decades, I know that at the very least I’ll surpass millionaire status and be able to retire at a reasonably young age. BUT the hope is that by doing more than the bare minimum, by diversifying my income streams, by continuing to act on my business ideas, and think outside the box for ways to increase my income, I’ll be able to reach that millionaire status far earlier than my current projections are telling me.
This plan is so simple, and easy to implement, it truly is accessible to everyone once you’re consistently spending less than you’re making.
Linked Resources
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