Myth #1: The only way to get rich is being born to a wealthy family.
This is so far from the truth. A Fidelity survey revealed that 86% of millionaires earned their way to millionaire status. They were not necessarily wealthy growing up. Rid yourself of the idea that you need to be born to a wealthy family in order to become a Future Millionaire.
If you read about me, you know that I stress the importance of having the right mindset. Making excuses for yourself will not get you anywhere. The fact is that most millionaires went through some of their own financial hardship at some point in their life.
You may see people in fancy cars or fancy homes and you may feel the temptation to start judging them. What we don’t see is what their path to prosperity entailed. Many develop this narrow-minded perception of those showing off their wealth, but fail to see the bigger picture.
My theory is that, deep down, we aren’t interested in seeing what their journey looked like. Everyone wants to be rich. When our brain wants something, we think of the easiest and most efficient way to attain it. That’s just how everyone’s mind works. Oftentimes, we don’t want to know the how because there’s a part of us that knows we’re in for a rude awakening.
I’m not saying any of this to insult anyone. I think this is just a natural phase of the developing mind. Our minds always think of the quickest and easiest way to attain something. The first step to becoming wealthy is getting past this phase and understanding that there is no shortcut. Stay in this phase too long, and a sense of self entitlement may begin to develop, slowly eroding the incentive build wealth.
Myth #2: My frugal habits will be the ultimate driver to my eventual success.
Technically yes… and no. Simply saving money is not going to be the main wealth driver to your Future Millionaire status. Okay fine, if you’ve got a super high paying job, then maybe you can. But if you’ve already got a high paying job, I assume you’re not here to figure how to get rich (Congrats to you).
For most of you that are here though, just saving money won’t cut it.This is only the first part of it. The second part is putting your money to work. In other words: Invest. Your. Money. If you just save your money into a bank account that earns just a fraction of a percent of interest, you could actually be losing money. This is due to inflation. A dollar today is more valuable than a dollar tomorrow. Invest your money so that your money can grow.
I cannot stress enough how incredibly powerful the concept of compound interest is. If there was only one thing I could choose for you to get out of this read, it would be compound interest. If you’re not completely in awe of the concept yet, I encourage you to read my recent article about compound interest. Back to the main topic: you need to do more than just save your money. You need to invest your money (eventually I’ll talk about my personal investing strategies). But the only way you’re going be able to invest money is to, well, have money.
Myth #3: I need to have a six-figure paying occupation to be rich.
Yes, it certainly helps to have a six-figure paying job. It’s not an absolute necessity. Far from it. I understand that say, $50,000 in one state may have more buying power than another state. I’m not completely familiar with the cost of living in every state, but I stand by my statement.
If you just invest $438 every month starting at age 25 and assuming you’re earning 6% interest rate, (which is very conservative) you will have $1 million at age 67. Maybe you’re already past that age. Starting at age 30, that monthly contribution would have to increase to $610. The older you are, the more you would have to increase that monthly contribution. This was also based on a very conservative 6% rate. This is why understanding compound interest at a young age is so vital.
Sure, it’ll take longer if you don’t have a super high paying job. Did anyone say it was a race though? Just keep grinding, live below your means, put your money to work until you eventually reach your goal. Then you can decide how you want to proceed, but why settle?