A Simple Formula to Become a Millionaire
In his latest book “The National Study of Millionaires,” Chris Hogan shares a simple, 4-step formula wannabe millionaires can follow.
The book is based on interviews of a huge sample by Dave Ramsey’s team: over 10,000 millionaires! It’s the largest research study of millionaires ever, so the conclusions should be trustworthy.
Please don’t assume that you have to be Oprah or Michael Jordan to be a millionaire (although they both started from nothing). Countless studies and books, such as “The Millionaire Next Door” (Thomas Stanley & William Danko) and “The Next Millionaire Next Door” (Thomas Stanley & Sarah Stanley Fallaw), have shown that “everyday”, “ordinary” people with regular jobs can absolutely become millionaires. But there are simple rules to follow. What are the rules?
Here is the punchline:
Work hard + save ruthlessly + invest well + spend wisely = welcome to the millionaire club.
Let’s go over these 4 steps in more detail.
1. Work hard
The assumption here is that working hard and putting your amazing skills to use will translate into higher earnings. It also should be your goal to educate yourself about how money works. Reading this blog and attending the Summit are good ways to start, in addition to reading financial books.
2. Save ruthlessly
This step is critical. As discussed during the Vet Financial Summit, your goal should be to save at least 10-15% of your gross income. Pay yourself first, as all financial books recommend. Then pay everybody else – not the opposite.
3. Invest well
You don’t need to take risks and learn how to day trade or trade penny stocks. If you need excitement in your life, go to Vegas or become an explosives specialist. You do however need to find a way to steadily invest in safe, reliable, possibly boring investments that will predictably get you to your financial goals.
4. Spend wisely
Splurging without a budget rarely leads to a stable financial situation.
That said, as discussed in our ebook 10 Super Practical Financial Tips*, life is not all about working and saving. We would encourage you to stash money away in a dedicated “fun account” so you can buy a fancy bike, enjoy bungee jumping or buy another rare item for your traffic cone collection.
If you implement the 4 “secrets” in Chris Hogan’s book, there is a high chance you will become a millionaire. It’s mathematical.
Phil Zeltzman, DVM, DACVS
Meredith Jones, DVM
Co-Founders of Veterinary Financial Summit