Everyone wants to be financially independent and successful. And, in a continent such as Africa where unemployment is a pretty stubborn child, the stakes that surround minting yourself as a millionaire are believed to be higher.
If you have heard the stories of Sandile Shezi and Mohammed Dewji, then you would know that becoming a millionaire before you clock 30 is not just a hype – I know someone who tore his books and is employing braniacs.
According to Investopedia, the world’s youngest millionaire, Alexandra Andresen, is 22 years old. Although the Norweigian heiress was born with a silver spoon, becoming a millionaire at her age is not entirely impossible. But what is more doable is becoming a king of cash while in your late 20s. Because somebody’s gotta do it, here are some of the best tips that actually work.
Double Your Income Sources
Saving your way to millions is not the real deal; you need to make them constantly. Rather than opening a bank account for this purpose and putting all your extra money until it reaches seven figures, double your source of income.
If you are earning USD 3 K a month, you can work to make it USD 20 K in the next two years. You, legally, need a stable job, and should market yourself to not just hold on to your current job, but to climb your way up to get a better position in perhaps a better company.
Are you in the tech space? Then consider staying atop news about innovation. And even if you are outside this industry, you can learn a few technical skills in a bid to spread your tentacles.
You can learn a soft skill not related to your academic field of study or start a business that will be run alongside your job. Any proper way you can, double – and maybe triple – your source of income. That way, working your way to millions becomes easier to achieve in a short time.
Thrifty Isn’t Stingy
You are probably of that school of thought which believes that millionaires often ride expensive cars and own the flashiest of gadgets. In most cases, that is not true. If you look forward and plan to attain the millionaire status early in life, you should not chase this trend, neither should you think of it. To make sure you maintain your income’s growth, you need to make sure you spend as wisely as possible. Living large is not always the answer.
Well, here is a little motivation for you – Amazon boss Jeff Bezos recently lost USD 38 Bn in a divorce development with his wife, and remains the richest man in the world.
If he had spent his first few millions buying the latest cars and spree-shopping for things he does not need, he probably would not be the wealthiest man alive. Now is the time for you to seek out to clear the racks or sales – never settle down for the retail price; there is always a better offer.
Piggy Bank Is Not Enough; Invest
Storing bucks upon bucks in an elephant jar is not even one of the best ways to become a millionaire – we’ve said that before. Even if you save this up from the age of 23 until 30, chances are still slim that you will hit the one million mark. You need to take this money and diversify- this is the truly smart financial move, even for above-30s.
Money sitting in a bank account does not yield anything more than monthly interest rates that almost add up to nothing. Not to say that having a savings account is a waste of time, but what is better than a good start is a viable investment opportunity that will fetch you more cash than you have right now.
From the moment you earn your first salary or receive your first profit, start thinking of ways you can invest. While there are many digital investment platforms that promise good returns, you can go for the gun by starting a business.
Startups such as Piggyvest, Cowrywise, ThriveAgric, and FarmCrowdy are making it possible for Nigerians, and Ghanaians especially to invest their money in great business models to get up to 30 percent returns. You can check out other platforms such as Etrade and Acorns. Or you could drive on the old lane by looking for business ideas you can get off the ground, depending on which works in your country.
The 50/20/30 Budget Is Actually A Thing
Do not be carried away by the zeros that appear on your paycheck. Those big-bellied numbers can deflate in almost an instant if you are not careful. Once you get your salary, each cent of that money should be set aside else you will find yourself becoming like Beyonce Knowles and Roman Abramovich – two of the world’s biggest spenders.
You may be of the opinion that it is impossible to spend all the money at once, but it is very close to possible. So before you hit the grocery stores, expensive boutiques and fancy five-star restaurants, create the 50/20/30 budget. But before you do, whisper some thanks in the air for Elizabeth Warren who devised this spending hack.
The 50/20/30 budget law says that 50 percent of your monthly income should go to the basic expenses – groceries, rent, utilities, feeding, and electricity. This is because it is unarguable that these are essential, and as such cannot be ignored unless you are living under the roof of someone who is both financially capable and genuinely generous.
Then, 20 percent of the same money should be kept in a savings account, set aside for portfolio additions or Roth IRA contributions. The 30 percent that is left of the cash math is spent on what is referred to as “lifestyle choices,” including eating out, watching movies, and changing your wardrobe, among others.
Avoid Unnecessary And Unyielding Debt
Contrary to what you may now believe because of some Twitter post or what you think is possible because you do not actually know what’s real, there is no such thing as good debt. Well, good debt, as storied, is money you do not easy access to, plus the fact that the money does not have the full guarantee that it will turn into profits later in the future.
Be as that may, there is a difference between “productive” and “unproductive debt” as well as examples to follow. A credit card is a type of productive debt – because swiping creates debt that is not paid off until you pay your statement.
The bottom line is that you need to make a rule that you will never use debt that will not make you any kind of money. You can choose to borrow some money to buy an SUV because you know that it will increase your income. Here’s one thing about rich people – they use these debts to leverage investments and grow their cash flows.
And, the ironic, seemingly saddening reality is that the poor use debt to buy things that making the rich people richer. If you want to become rich before or at 30 and stay that way, you need to avoid debts that are unnecessary and unyielding.
Featured Image: Lusaka Times