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How to make a million dollars (with advice from actual millionaires)

Real millionaires tell you exactly how to make a million dollars through systems, advice, and tough truths.

Ramit Sethi

Do you want to learn how to make a million dollars?

Of course you do. It’s practically part and parcel of the American Dream, right behind buying a house with a white picket fence and eating hot wings with Guy Fieri.

 Luckily for you, making a million dollars is incredibly easy as long as you do one simple trick…

…just kidding. It actually takes a lot of time, energy, and sweat equity in order to make a million dollars.

You could always try things many other people have tried before, like:

  • Buying lottery tickets. Though your chances of winning are 175 million to 1.
  • Joining a multi-level marketing company. Even though the people who take part in these schemes rarely make money (if at all).
  • Start investing in the stock market. Typically, this comes after a single viewing of Wall Street followed by aimlessly purchasing and selling stocks and never really making money at all.

But why would you do that when you can turn to people who have actually made a million dollars and find out what they did to get there?

In fact, when you take a look at how the most wealthy Americans got their wealth, almost all of it is because of their business and investing.

millionaires

Luckily for you, we did that.

We spoke with two millionaires who were able to earn their money through a powerful combination of two things:

  1. Investing and saving
  2. Earning more money through side hustles

And we’ll show you exactly how to do both. But first,

The millionaires we talked to

Our millionaires are…

Luisa Zhou

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From the outside, Luisa seemed to have it all. A Princeton graduate with a job that gave her a healthy six-figure income, she decided one day that she wanted more.

“I wasn’t feeling fulfilled or challenged in my job,” she says. “Even though I was making a great salary, I was just doing powerpoints all day! But I really pushed it into the back of my mind.”

That is until a series of sporadic illnesses and accidents in her immediate family caused her to reassess her situation.

“I couldn’t take work off to spend time with them for a significant amount,” she recalls. “That’s when I realized that I need more control in my life. Even if things are good, if I don’t have the freedom to spend with the people I love then I can’t do this.”

That’s how she got started with her side hustle consulting people in digital advertising, before moving on to teaching aspiring entrepreneurs how to launch their own business.

“A lot of people want to be millionaires overnight,” Luisa says. “My response to that is there’s no such thing.”

She’s since scaled her business and was able to earn $1.1 million in sales within 11 months. You can read about that journey on our sister site GrowthLab.

Shannon Badger 

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With three kids to take care of, Shannon knew she had to really learn the art of the grind in order to quit her job and take her freelancing seriously.

“Back when I had two kids and a third on the way, I just wanted more flexibility and be my own job and be able to work more remotely from home,” she says.

And so she did. That’s how she was able to grow her freelance CPA consulting hustle into a full-fledged business (Badger and Badger CPA) that she runs with her husband. It’s helped earn her her first million dollar year in 2017.

“It was a huge mentality shift to how much can I ramp it up while still working full time in my other job,” she says. “There’s a quote by Dave Ramsey that goes: ‘Live like no one else, so you later can live like no one else.’ My husband and I were really disciplined when we got started, and it made the process less difficult.”

And now, these two millionaires are going to divulge their strategies on how they got to where they are — and how you can do it too.

How to make a million dollars

Remember, our two millionaires were able to earn their money through a powerful combination of two things:

  1. Investing and saving
  2. Earning more money through side hustles

Though you can actually make a million dollars on investing and saving alone, you can watch your net worth explode if you combine them both — which I suggest you do.

Then you’ll be able to dive into a huge pool of money — a la Scrooge McDuck — sooner rather than later.

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(Well, you might have to turn all of your assets into pennies…)

Part I: Investing and saving

Step 0: Get out of debt  

The number one barrier preventing people from living a Rich Life is debt.

That’s why this is Step 0. Before you even think about investing, saving, or earning more money, you need to take steps to get out of credit card debt.

“A [freelancing business] is not the solution to your money problems,” Luisa says. “If you’re struggling to pay your bills or are in debt, the first thing you want to do is get a job that can help you. That’s the easiest way to really help you first.”

That’s why getting out of debt was also a priority for Shannon when she and her husband/business partner first got married.

“When my husband and I were first married, we were really disciplined about getting out of debt and saving,” Shannon says. “We paid off all of our debt out of college. We paid off all of our car debt. And now we’re paying off our house.”

Paying off your credit card debt is one of the most important investments you can make into your Rich Life. I’ve written about how to get out of debt before, but I’ll give you a breakdown of the exact same system in my book that has helped thousands of readers finally escape their debt.

If you want a more detailed look at the system, I highly suggest you read my article on how to crush debt. 

For now, here’s a brief overview:

  1. Find the exact amount you owe.

    You’re probably thinking, “Well, duh. Of course you should know how much debt you have,” but it’s actually wayyy harder than you think.

    In fact, a study found that many don’t actually know how much debt they owe. It makes complete sense too. Humans are sensitive creatures who would rather run from their problems than tackle them head-on.

    However, this just leads to you blindly paying the minimum payment instead of actually owning your debt. Only then can you start a good strategy to get rid of it.

  2. Pay off the highest interest rate first.

    Not all debt is made the same. That’s why you want to start paying off the debt with the highest interest rate first.

    For example, imagine you have $10,000 in student loans that have a 6.8% interest rate and a 10-year repayment period. You could pay the minimum of $115/month — but if you spent another $100 more each month, you could save thousands of dollars.

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    The minimum will leave you saddled with more debt. Even $20/month more helps save you a lot of money.
  3. Don’t be tempted.

    If you want to get rid of your debt for good, you can’t keep adding to it. That’s why you need to stop yourself from taking on more, at least until you’ve gotten rid of your existing debt.

    So do yourself a favor and get rid of your credit cards (at least until you’re out of debt). Give them to a friend or a family member to hold on to. If you have a safety deposit box, put them in there for a while. Anything works as long as your cards are out of sight and out of mind.  

  4. Negotiate a lower interest rate.

    Did you know that you can actually save over $1,000 in a single phone call with your credit card company? Using simple negotiation systems, you can lower your credit card’s APR and put that money back in your pocket. For the exact scripts that you can use during your negotiations, be sure to check out my full article on eliminating debt.

  5. Decide how you’re going to pay your debt.

    There are a number of ways you can approach this. You can use the money you got from step four and put it towards chipping away at what you owe. You can also tap into hidden income to free up some money. If you’re really enterprising, though, you can start EARNING more money — I’ll explain that in a little bit.

A while back, I created a video all about negotiating your debt. Don’t be thrown off by how old it is or how I filmed it using a potato. The advice can still help you expertly negotiate with credit card companies.

Step 1: Save money for when you need it most

“My husband and I were really good about saving money,” Shannon says. “We created a six-month emergency fund that allowed us to take a small step back financially when I quit my job. But because we saved early, it gave us a lot of freedom to invest and earn.”

By saving money, she gave herself the freedom to earn more money.

That’s why it’s important to set savings goals.

Shannon continues, “If we didn’t have our savings fund as a safety net, it would have been much more difficult to start our business.”

To find out how much you need in your emergency savings fund, you simply have to take into account three to six months worth of:

  • Utility bills (internet, water, electricity, etc)
  • Rent
  • Car/home payments
  • Food/groceries

Basically, any living expense that you have should be accounted for.

You should also start an account exclusively for your emergency savings fund. Most banks allow you to create a sub-savings account along with your normal savings account. (You can even name them too!) So create one for your emergency fund.

And you can start putting money into the account through my favorite system: Automating your personal finances.

The process only takes one to two hours at the most, but once you set it up, you don’t have to worry about it again.

AND it’ll save you thousands of dollars over your lifetime.

Here is a 12-minute video of me explaining the exact process I use below.

Step 2: Invest in your future

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Investing your money is the best way to guarantee you become a millionaire. In fact, I promise you, if you follow the systems below you will eventually become rich.

Shannon knows that too.

“My husband and I have been putting 10 – 15 percent of our earnings into our retirement accounts for a while now,” she says. “We also have a 529 plan for each of our kids.”

When it comes to accounts for retirement, you have two options:

  1. 401k
  2. Roth IRA

These are retirement accounts. That means you’ll be able to accrue gains with big tax advantages with one caveat: you promise to save and invest long term. That means you can buy and sell shares of almost anything as often as you want as long as you leave the money in your account until you get near retirement age.

Let’s take a look at each one.

401k: Free money from your employer

A 401k is a powerful retirement account offered to you by your employer. With each pay period, you put a portion of your pre-tax paycheck into the account. That means you’re able to invest more money into a 401k than you would a regular investment account.

But here’s the best part: Your company will match you 1:1 up to a certain percentage of your paycheck.

Say your company offers 3% matching. If your yearly salary is $150,000 and you invest 3% of your yearly salary (~$5,000) into your 401k, your company would match you that amount — doubling your investment.

Check out the graph below that illustrates this.

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This is free money!!! If your company offers a match, you should ABSOLUTELY take part in their 401k plan.  

For more on 401k’s, be sure to check out my article on how the account is the best way to grow your money.

But 401k’s are only one part of the equation when you want to start saving for retirement. The other account you should get is a Roth IRA. And ideally, you have both.

Roth IRA: The best long-term investment

A Roth IRA is simply the best deal I’ve found for long-term investing.

Remember how your 401k uses pre-tax dollars and you pay income tax when you take the money out at retirement? Well, a Roth IRA uses after-tax dollars to give you an even better deal.

With a Roth, you put in already taxed income into stocks, bonds, or index funds and pay no taxes when you withdraw it.

For example, if Roth IRAs had been around in 1970 and you’d invested $10,000 in Southwest Airlines, you’d only have had to pay taxes on the initial $10,000 income. When you withdrew the money 30 years later, you wouldn’t have had to pay any taxes on it.

Oh, and by the way, your $10,000 would have turned into $10 million.

That’s an exceptional example, but when saving for retirement your greatest advantage is time. You have time to weather the bumps in the market. And over years, those tax-free gains are an amazing deal.

How to open a Roth IRA account

To open up a Roth IRA, find a brokerage account. There are many out there, so I highly suggest shopping around and taking a look at the options out there.

Certain factors you want to consider when looking at brokers can be:

  • Minimum investment fees
  • Customer service
  • Investment options
  • Transaction fees

A few brokers I suggest, though, are Charles Schwab, Vanguard, and E*TRADE.

These brokers offer fantastic customer service and are well-known in the investment community for their great stock options.

Special note: Most brokers typically have minimum amounts for opening a Roth IRA, usually $3,000. Sometimes they’ll waive the minimums if you set up an automatic payment plan depositing, say, $100/month.

Also, it’s worth noting that there’s currently a yearly maximum investment of $5,500 to a Roth. (This amount changes often so be sure to check out the IRS contribution limits page to keep updated.)

Once your account is set up, your money will just be sitting there. You need to do things then:

  1. First, set up an automatic payment plan so you’re automatically depositing money into your Roth.
  2. Second, decide where to invest your Roth money; technically you can be in stocks, index funds, mutual funds, whatever. But I suggest investing your money in a low-cost, diversified portfolio that includes index funds such as the S&P 500. The S&P 500 averages a return of 10% and is managed with barely any fees.

For more, read my introductory articles on stocks and bonds to gain a better understanding of your options. I also created a video that’ll show you exactly how to choose a Roth IRA.

NOTE: After you invest in your retirement accounts, you can actually stop right there. After many years, your money will compound and earn you well into the millions if you continue investing.

Say you’re 25 years old and you decide to invest $500/month in a low-cost, diversified index fund. If you do that until you’re 60, how much money do you think you’d have?

Take a look:

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$1,116,612.89.

However, if you want to be able to hit a million dollars sooner than that, there’s only one really good option: Earning more money through a hustle.

Part II: Earning more money

The reason earning money is one of my favorite ways to get to a Rich Life is simple:

There’s a limit to how much you can save, but no limit to how much you can earn.

If you’re willing to put in the work and develop a hustle that’ll scale and grow, you can earn as much money as you want. And while there are a lot of ways you can make more money, my favorite way is by starting a freelance hustle.

That’s what Shannon and Luisa did, and they’re going to show you how.

Step 3: Find a million dollar business idea (it’s easier than you think)

One very common misconception about starting your own freelance hustle is that you need to come up with the “perfect” idea to do it — when that couldn’t be further from the case.

“People think that they need a cool crazy idea like the next Facebook to make a significant amount of money,” Luisa says. “But what most people don’t realize is that they already have the skills to make a million dollars.”

I know it’s difficult to imagine that you might have profitable skills already — but you do. In fact, Shannon has a perfect solution to find out those skills: Look at what your friends ask you to help them out with. That’s how she got her start as a freelance CPA consultant.

From Shannon:

“I had a colleague who needed help sorting through her finances. She asked me to help her out, and she became my first client. Then I had another friend who started a law office and needed help, so I helped them out with all of their accounting. I’d meet with them to make sure that they were still compliant and help with their tax returns.

It just started with helping people as a hobby, but then my husband pointed out that I was getting clients without even trying. Eventually, I was able to start a freelancing business from it.”

That’s not the only way you can find a profitable freelancing idea either. There are actually 4 questions you can ask yourself right now to find an idea you can leverage for your hustle.

  1. What do you already pay for? We already pay people to do a lot of different things. Can you turn one of those things into your own online business? Examples: Clean your home, walk your pet, cook you meals, etc.
  2. What skills do you have? Now, what do you know — and know well? These are the skills you have that you’re great at — and people want to pay you to teach them. Examples: Fluency in a foreign language, programming knowledge, cooking skills, etc.
  3. What do your friends say you’re great at? I love this question. Not only can it be a nice little ego boost — but it can also be incredibly revealing. Examples: Workout routines, relationship advice, great fashion sense, etc.
  4. What do you do on a Saturday morning? What do you do on a Saturday morning before everyone else is awake? This can be incredibly revealing to what you’re passionate about and what you like to spend your time on. Examples: Browsing fashion websites, working on your car, reading fitness subreddits, etc.

Find an answer to those questions and I promise you you’ll find a great freelancing idea.

ACTION STEP: Find a profitable idea.

Spend about 10 – 20 minutes now writing down five answers for each of the four questions above. Once you’re done, congratulations — you now have 20 potential business ideas that you can grow into a flourishing side hustle.

For now, just choose one business idea. It’s okay, you can always change it later. For now, we’re going to just try one out and try to find a client with it.

Step 4: Find your first client

In order to start earning money, you need to find the people who will give you money for your ideas.

But the question is…how? Where do you find these people?

For Luisa, that meant going online and finding out where her clients lived.

“I spent a lot of time on Facebook groups talking with potential clients answering their questions about advertising,” Luisa says. “That’s when I found my first client.”

You can do the same thing.

Ask yourself:

  • Who is my client?
  • Where do they go when they want to look for a solution to their problems?
  • Where are they ALREADY looking for solutions to their problems?
  • How can you connect them to your service?

At this point, you’re also going to want to niche down your market in order to really tailor your services and draw in customers.

“Stay in your niche,” Shannon suggests. “We had a few instances where we veered from the niche and we paid for it dearly. It might feel cheesy to sit down and figure out what your target market is or what your goals are for the company, but you have to do that. All that legwork needs to be done upfront. It’s just practical.”

So think about who’s an example of a client who might want to buy your product.

A few questions to jumpstart your research:

  • How old are they?
  • Where do they live?
  • What are their interests?
  • How much do they make?
  • What books do they read?

Using this information, find out what your clients need by going to the places they go.

For example:

  • Want to pitch to moms that blog about children? Go to The Mom Blogs and start with the ones under “Popular Blogs.”
  • Looking for physical or massage therapists within 50 miles of your house? Yelp should get you started easily.
  • If you want to do large dog grooming and sitting, well there’s probably a local pet store or dog park near you where owners are all congregating just waiting for you to offer them a solution.

Here are a few suggestions of some other great sites freelancers can use to find business online:

Once you find a potential client, you’re going to want to reach out to them and pitch your services.

ACTION STEP: Find a client and email them (with scripts).

Find your client using the information, I’ve outlined above. Once you’ve done that, you can reach out to them using this handy script:

CLIENT’S NAME,

I saw your post on X and visited your website. I noticed that you’ve recently started using videos too.  

I’ve been doing video editing for three years and I’d like to offer to help you edit your videos and get them optimized for the web.

That would make them look more professional and load faster, which is important for your readers. And you’d free up time that you could use to create new content.

We can discuss the details, of course, but first I wanted to see if this is something you might be interested in.

If so, would it be okay if I sent you a few ideas on how to help?

Best,

Ramit Sethi

A few takeaways:

  • There is zero fat in the pitch. Every word counts and is needed to help really sell the benefits of working with you.
  • Don’t mention payment. There’s nothing that will kill a potential client’s interest in you more than pushing prices on them before they’re ready.
  • Stress the benefits. This email shows the client why it would be in their best interest to buy from you in the third paragraph.

Once you get a client using this email, congrats! You just secured your first client — but it doesn’t end there. You need to actually do the work for them, and that means continually adding value.

“If your focus is to add as much value as possible, the revenue takes care of itself,” Shannon says. “We deal in a very organic, transparent way. People who want to work with us know that they’re going to be dealt with fairly, and also that we’re going to be adding value. Because of that, we get a lot of referrals, which really helped grow the business to earn what we do now.”

Step 5: Invest again — but this time, in yourself

Investing takes many shapes. It’s not all stocks, bonds, and retirement accounts. Investing can also be in yourself — and it’s something you need to do if you want to earn a million dollars.

From Luisa:

“I’ve always been big on investing [in myself]. Even in my previous businesses it’s been a lot of me putting in the cash into my business. I invested in my site. I invested in a copywriter to teach me how to make copy. I invested in someone to teach me how to make sales calls.

Thankfully, I knew what I didn’t know, so I invested heavily in those things. I’m not a big risk taker. But I do believe in calculated risk. After all, I am my best asset. My top priority is myself or my business.”

I love this. It hits on an idea that all IWT readers should embrace: Be continually curious.

Ask questions when you don’t understand something and don’t be afraid to seek out more information through books, courses, or schooling. It’s only then that you can hope to truly live your Rich Life.

That’s why my team and I have worked hard to create a guide to help you invest in yourself today: The Ultimate Guide to Making Money.

In it, I’ve included my best strategies to:

  • Create multiple income streams so you always have a consistent source of revenue.
  • Start your own business and escape the 9-to-5 for good.
  • Increase your income by thousands of dollars a year through side hustles like freelancing.

Download a FREE copy of the Ultimate Guide today by entering your name and email below — and start blowing up your net worth today.

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