How to get rich: 8 steps to make your first million dollars

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How to Make a Million Dollars

Many people hope to get rich. (Not that there's anything wrong with that.)

And while inflation may have changed the standard, for many becoming a millionaire is still a common goal.

That goal is clear... but the path to that kind of wealth is often anything but.

Then again, maybe it is.

The following is a guest post from Dharmesh Shah, the co-founder of HubSpot, the inbound marketing company named to the 2016 Inc. Founders 40 list and the author of the HubSpot Culture Code slide deck that has been viewed by 2.5 million people on SlideShare alone.

Here's Dharmesh:

Of course, money isn't everything. Not by a long shot. Where your definition of success is concerned, money may rank far down the list. Everyone's definition of "success" is different.

Here's my definition: Success is making the people that believed in you look brilliant.

For me, money doesn't matter all that much, but I'll confess it did at one time (probably because I didn't have very much).

So let's say money is on your list. And let's say, like millions of other people, that you'd like to be a millionaire. What kinds of things should you do to increase your chances of joining the millionaire's club?

Here are the steps I'd suggest. They're neither fast nor easy. But they're more likely to work than the quick and easy path.

1. Stop obsessing about money.

While it sounds counterintuitive, maintaining a laser-like focus on how much you make distracts you from doing the things that truly contribute to building and growing wealth.

So shift your perspective, and see money not as the primary goal but as a byproduct of doing the right things.

2. Start tracking how many people you help, even if in a very small way.

The most successful people I know -- both financially and in other ways -- are shockingly helpful. They're incredibly good at understanding other people and helping them achieve their goals. They know their success is ultimately based on the success of the people around them.

So they work hard to make other people successful: their employees, their customers, their vendors and suppliers... because they know, if they can do that, then their own success will surely follow.

And they will have built a business -- or a career -- they can be truly proud of.

3. Stop thinking about making a million dollars and start thinking about serving a million people.

When you only have a few customers and your goal is to make a lot of money, you're incented to find ways to wring every last dollar out of those customers.

But when you find a way to serve a million people, many other benefits follow. The effect of word of mouth is greatly magnified. The feedback you receive is exponentially greater and so are your opportunities to improve your products and services. You get to hire more employees and benefit from their experience, their skills, and their overall awesomeness.

And in time, your business becomes something you never dreamed of-because your customers and your employees have taken you to places you couldn't even imagine.

Serve a million people -- and serve them incredibly well -- and the money will follow.

4. See making money as a way to make more things.

Generally speaking, there are two types of people.

One makes things because they want to make money; the more things they make, the more money they make. What they make doesn't really matter that much to them -- they'll make anything as long as it pays.

The other wants to make money because it allows them to make more things. They want to improve their products. They want to extend their lines. They want to create another book, another song, another movie. They love what they make and they see making money as a way to do even more of what they love. They dream of building a company that makes the best things possible... and making money is the way to fuel that dream and build that company they love.

While it is certainly possible to find that one product that everyone wants and grow rich by selling that product, most successful businesses evolve and grow and, as they make money, reinvest that money in a relentless pursuit of excellence.

5. Make it your goal to do one thing better than anyone.

Pick one thing you're already better at than most people. Just. One. Thing. Become maniacally focused at doing that one thing. Work. Train. Learn. Practice. Evaluate. Refine.

Be ruthlessly self-critical, not in a masochistic way but to ensure you continue to work to improve every aspect of that one thing.

Financially successful people do at least one thing better than just about everyone around them. (Of course, it helps if you pick something to be great at that the world also values -- and will pay for.)

Excellence is its own reward, but excellence also commands higher pay, greater respect, greater feelings of self-worth, greater fulfillment, a greater sense of achievement... all of which make you rich in non-monetary terms.


6. Make a list of the world's ten best people at that one thing.

How did you pick those ten? How did you determine who was the best? How did you measure their success?

Use those criteria to track your own progress towards becoming the best.

If you're an author, it could be Amazon rankings. If you're a musician, it could be iTunes downloads. If you're a programmer, it could be the number of people that use your software. If you're a leader, it could be the number of people you train and develop who move on to bigger and better things. If you're an online retailer, it could be purchases per visitor, or on-time shipping, or conversion rate....

Don't just admire successful people. Take a close look at what makes them successful. Then use those criteria to help create your own measures of success. And then...

7. Consistently track your progress.

We tend to become what we measure, so track your progress at least once a week against your key measures.

Maybe you'll measure how many people you've helped. Maybe you'll measure how many customers you've served. Maybe you'll evaluate the key steps on your journey to becoming the world's best at one thing.

Maybe it's a combination of those things and more.

If you need inspiration to work towards your million-dollar goal, check out one of these books below.

Best selling motivational/success books on Amazon
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How to get rich: 8 steps to make your first million dollars

8. Build routines that ensure you will make progress.

Never forget that achieving a goal is based on creating routines.

Say you want to write a 200-page book. That's your goal. Your system to achieve that goal could be to write four pages a day; that's your routine. Wishing and hoping won't get you to a finished manuscript, but sticking faithfully to your routine ensures you reach your goal.

Or say you want to land 100 new customers through inbound marketing. That's your goal; your routine is to create new content, new videos, new podcasts, new white papers, etc., on whatever schedule you set. Stick to that routine and meet your deadlines, and if your content is great, you will land those new customers.

Wishing and hoping won't get you there. Sticking faithfully to your routine will.

Set goals, create routines that support those goals, and then ruthlessly track your progress. Fix what doesn't work. Improve and repeat what does work. Refine and revise and adapt and work hard every day to be better than you were yesterday.

Soon you'll be good. Then you'll be great. And one day you'll be world-class.

And then, probably without even noticing, you'll also be a millionaire.

You know, if you like that sort of thing.

RELATED: 10 ways to invest and become a millionaire

10 ways to invest to become a millionaire
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How to get rich: 8 steps to make your first million dollars

Include taxes in your tally. 

Withdrawing money from retirement accounts is, of course, not a free ride, so $1 million gross is not $1 million net. “If the $1 million were in a traditional 401(k) or IRA, all withdrawals would be taxable,” says Christine Pavel, vice president of wealth management at GCG Financial in Deerfield, Illinois. “You also have to consider how much the investor will withdrawal from the portfolio, and for how long.” Assuming 3 percent inflation, looking forward 30 years and accounting for retirement account taxes, “An investor would be lucky to be able to withdraw $20,000 or less from the account for 30 years,” she says. 

(Photo: Getty)

Compounding counts. 

If you're in your 20s and start investing now, you’re in luck, says Joe Jennings, wealth director for PNC Wealth Management in Baltimore. “Due to the power of compounding, the first dollar saved is the most important, as it has the most growth potential over time,” he says. As an example, Jennings compares $10,000 saved at age 25 versus age 60. “The 25-year-old has 40 years of growth potential at the average retirement age of 65, whereas $10,000 saved at age 60 only has five years of growth potential,” he says.

(Photo: Getty)

Consider annuities as a building block. 

Annuities, which people purchase to get an expected payout once they reach maturity – usually at or after retirement age – also have a rough reputation, particularly indexed annuities. But last year’s Qualified Longevity Annuity Contract regulation by the IRS set guidelines for investors to create their own pensions. “You can invest and put money in a retirement account, and with annuity guarantees that you will never outlive your money,” says Stan “The Annuity Man” Haithcock, an annuities expert and author of the book, "The Annuity Stanifesto," based in Ponte Vedra Beach, Florida.

(Photo: Getty)

Safety first. 

It may seem sexier to get in on the latest initial public offering or that new stock your Uncle Mortimer promises will take off. But that’s no way to build a nest egg through the years, says Jim Merklinghaus, founder and president of JBM Financial in Rutherford, New Jersey. “My philosophy has been a conservative approach to retirement, investing consistently over a 30-year period of time. If your principal is 100 percent safe, you have already accounted for 12 years of a normal 30-year retirement. The plan that avoids the loss of principal far exceeds the joy of temporary returns,” he says.

(Photo: Getty)

Diversify between companies large and small. 

Risk tolerance and portfolio mix are major factors in getting to $1 million, and they’ll differ depending on the investor. But if there’s one universal that applies, ”The portfolio should be diversified among large- and small-company stocks, domestically as well as in established foreign countries and emerging markets,” says Kenneth Moraif, senior advisor at Money Matters in Plano, Texas. “The appropriate allocation in each of these asset classes will be determined by the investor’s time horizon, their current assets, age and tax bracket.” 

(Photo: Getty)

Use that 401(k) all the way. 

Since retirement is the major savings goal with most nest eggs, make sure you maximize your retirement savings, says Andy Saeger, vice president and senior financial consultant at Charles Schwab in Naperville, Illinois. “Max out your 401(k) or other employer retirement plan, especially if you receive matching contributions. If you're age 50 or older, make catch-up contributions. If you can afford to save more, you may be eligible to open and contribute to an IRA, where your money can grow tax-deferred or tax-free until retirement,” Saeger says.

(Photo: Getty)

Thou shalt pay thyself first

What used to be simple, sound advice is more of a commandment when $1 million or more is the goal. “If you make the financial plan first and then build your life around it, the outcomes are typically very positive,” says Mike Chadwick, CEO of Chadwick Financial Advisors in Unionville, Connecticut. “Most people do the opposite: They set up their life and then try to save after the fact, when it’s painful to do so. When something is paid off, save the extra money and you won’t feel the pain. And when you get raises, save the money until you’re on target.”

(Photo: Getty)

Avoid the temptation to spend first. 

Most investors, especially in their younger years, think they can easily make up for copious spending and shopping. “This is certainly possible, but will require a potentially difficult, if not impossible, return on the investment or a significant increase in savings,” says Bellaria Jimenez, managing partner with MetLife Premier Client Group, based in Cranford, New Jersey. ”Investors must ignore temptations to spend and instead save.”

(Photo: Getty)

Patience, patience, patience. 

Just as it takes years to get to retirement age, you’ll want to stick it out, as some investments hit expected bumps. “Over a typical working career, an investor can expect to experience at least eight to 12 poor market years,” says Jakob Loescher, a financial advisor with Savant Capital Management and based in Rockford, Illinois. “During these years, it’s important that the individual remain patient and not make any large market-timing mistakes.”

(Photo: Getty)

And finally, answer the $2.3 million question. 

That’s how much money you’d need in 2045 to have the same purchasing power as $1 million today, assuming a 3 percent annual inflation figure. So how do you get to $2.3 million? “Assuming a starting account value of $50,000 and an 8 percent return on assets, an investor would need to deposit $13,500 at the beginning of each year over the next 30 years to achieve that result,” says Andrew Gluck, managing director of wealth management at GCG Financial.

(Photo: Getty)


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