I want to be a millionaire. How can I make a million dollars?

Q: I want to be a millionaire. How can I make a million dollars?

Why do you want to be a millionaire? If you want to be a millionaire so that you can spend money freely, I can’t help you. People who like to spend money have a hard time becoming millionaires. Many people believe that becoming a doctor or a lawyer is a one-way ticket to riches. I’m sorry to disappoint, but that is not the case. Becoming a millionaire is not just about making a bunch of money. Once made, you have to save and invest that money so that it makes more of itself for your benefit. This means learning and understanding the difference between an asset and a liability. The easy definition is that an asset becomes more valuable over time and a liability loses value over time. Many people think cars are assets, but in reality they are our biggest liabilities. Not only do they lose value over time, they cost money to use and maintain. In general, real estate is considered to be a great asset. Although we may be going through a national real estate slump in 2007, real estate usually appreciates in value over time. The key to becoming a millionaire is investing your money into assets and avoiding liabilities. If you research the spending habits of people around you, you will see that most people routinely waste their money on liabilities. To increase your wealth, you need to limit expenditures in things like Starbucks, cars, clothing, movies, and other commodities that get consumed or lose value. I’m not saying that we should not clothe ourselves, but if we want to be millionaires, paying $6.00 for Starbucks versus $1.00 at the gas station can be classified as flushing money down the toilet. Did you know that the average millionaire buys his suits at J.C. Penny’s? The company sells great suits that last for years and are extremely affordable ($200 on sale). Millionaires rarely buy new cars. They buy 3-year old cars and either drive them into the ground or sell them 3-years later for almost the same amount. This saves them thousands of dollars that they dump into real estate, stocks, bonds, retirement accounts, and businesses. If you want to be a millionaire, learn more about how the average millionaire lives by reading The Millionaire Next Door by Dr. Thomas J. Stanley and Dr. William D. Danko.