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How To Become a Millionaire by 40

written by: CinWrites•edited by: Jean Scheid•updated: 10/2/2009

If you are not a millionaire today, you have probably dreamed of becoming one. Wealth eludes people not because it is impossible to achieve but because it takes planning, discipline, and a change in the way you think about money. Gaining Financial independence is not easy, but it is within reach.

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    It is Just Money

    Chances are you are reading this article with curiosity, yet are already convinced that there is no way you could ever possess a million dollars. But the truth is it is not as far fetched as you may think. As people who need things we are obsessed with money and have turned it into something to be worshiped. But it's just paper. You earn it and spend it. IT has no power. YOU do. How you treat your money and everything associated with it determines how much wealth you will or will not build.

    By first getting your mind right about money, then setting some ground rules and establishing good habits, a young person just starting out could easily become a millionaire by age 40.

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    Getting My Mind Right?

    We are our own worst enemies when it comes to reaching our true potential. We set limits in our own minds of what we can achieve, then we act accordingly. But think about this... LIMITS ARE NOT REAL. They are false estimations based on society and peer comparison. Even the most well meaning family member can talk you right out of reaching your greatest goals. You don't have to let that happen.

    Have you ever stopped to realize that whatever your current station in life, there is somebody out there who would love to be you? They strive for YOUR success. While you are moping around complaining that your house is too small and you don't have a Rolex watch, there are countless people who don't have homes who have never heard of Rolex. While you are disappointed about the trip you cannot afford, someone else thinks you must be rich because you have a pantry full of food and HBO. Isn't it shocking to think that someone looks at you the way you look at those whose finances are more abundant than your own? And honestly, what did you do to get where you are? Sure you worked hard, but do you feel that you have reached some level of success that those others cannot touch? Of course not. That is also how the millionaires look at you while they strive to reach billionaire status!

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    Good Habits and Ground Rules

    Just like any other goal, becoming a millionaire by 40, or any age for that matter, requires planning and then doing.

    *Think about how much money you need to save each week or month to reach your goal, based on your current age and target age. Write that number down and keep it at the front of your mind at all times. It has to be a realistic number, of course, although it might not be achievable at this moment. For now, focus on that amount rather than the million. It is easier to digest and quicker to reach. Don't forget to write it all down. For most of us there is something powerful about writing things down. Otherwise you either forget a plan ever existed or lose track and take detours that hinder the process.

    *Focus on saving the money you get instead of daydreaming how to spend it. Live below your means. Nobody got rich by blowing their money on expensive cars and material stuff. Bargain shop, use coupons, and dare I say... do without! Spend some time differentiating between your wants and needs. When you get extra money, make a plan to save half of it. If you get a raise at work, save half out of every check. Same for bonuses or any other money that comes your way.

    In addition to saving that money, earn more of it! Hustle a bit. There are plenty of opportunities for supplemental income. Even if it is only a small amount, it adds up. If you can find a home based business or something that you love, all the better. It might become your primary source of income!

    *Be wary of credit cards. I heard a good saying once, "If you eat it or wear it, don't charge it." Ideally if you cannot have it paid off within 3 months you should try to avoid it, as well. Over time the interest you pay will peck away at what you have worked so hard to save, and your future income will be tied up paying off cards.

    *Put your money to work for you. Invest! It can be scary but perhaps the biggest hurdle is realizing that you do not need a lot of money to get started. Mark Skousen's Thirty Days to Financial Independence Plan is a super place to start because it presents finances in a very simple and non intimidating way. By the end of the book you will have made your first investment. Just about anyone can do it. And if you can afford it, seek the assistance of a financial planner.

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    Nourish Your Entrepeneurial Spirit

    According to The Millionaire Next Door two thirds of American millionaires are self employed. Of those only 25% are professionals such as doctors, attorneys, and accountants. 75% are entrepreneurs! So that means that the surest way to financial abundance and becoming a millionaire by 40 is to decide to own your own business, not try and figure out what company or career pays the most.

    This reinforces the fact that anybody can become a millionaire. When it comes down to it, you cannot control what jobs you get. But you can make a plan and build your own business. Then follow the good habits and rules above. It will take hard work and sacrifice but if it were easy, everyone would do it. The difference between the millionaire and everyone else is the millionaire worked hard and didn't get caught up accumulating things early in life. If you want it bad enough and have the discipline to work hard, save, and stick to the plan, you can become a millionaire by 40.