Becoming a millionaire – that is the dream of many people. But what is the secret in becoming a millionaire? People have been asking this question forever it seems. Some ask this question in public while others seemed to be ashamed of their “greediness” a little bit. But is it really greediness asking this question? I do not think so. I personally like to set high goals. If you aim low you will hit low. To get somewhere in life you have to be ambitious. If the task for a challenge is set too low it is not a challenge. For many people life looks like a mirror of what their parents did. Get a college degree and start working for a company. Eventually switch jobs 2-3 times – then retire. Fluctuations only come when a better education is achieved and if the career path reaches the beyond being a normal employee. In the end you will end up with a house, 2 kids and a couple of hundred thousands in your 401K when you retire. Pretty exciting, eh?!

Overall following that path will most likely not turn you into a millionaire. Eventually your house will help you reach the magic $1,000,000 but then again – a house is not an asset you spend just like this.

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You got to live somewhere. Maybe your 401K takes of and you reach $800K or $900K. That is close to a million, isn’t it?! Sometimes we find ourselves asking if we’re really on the right path to make the first million dollars.

With that in mind people turn to making adjustments to their career at some time in life. They aim for a higher position at the company they work for or switch jobs to score a higher salary. This usually helps a little bit in achieving the goal but it also means a lot more work and less time for the family. The additional stress takes a toll on your health and in the end you spend more money from the available salary and you do not put more money into the bank. So, sometimes, earning a higher salary doesn’t always result in making you a millionaire. What does it really take to make you earn your first million and to have $1,000,000 in the bank? Remember – the moment you spend one dollar from that $1,000,000 you are no longer a millionaire.

If you go and observe some of the famous millionaires, you will notice that their wealth is not always based on weekly paychecks, high flying careers, or the name of the college/university they went to. It is more often how they conduct business and how they save money and what their spending habits are. The second piece to that is also how they invest their money.

One of the biggest mistakes one can make is how they spend money. Many people think that the more they earn, the higher their standard of living should be. A change in lifestyle coming from a higher salary is often hard to reverse. Going back to a lifestyle of living below your means seems to be impossible for some. Those people will most likely fail on their road to become the next millionaire. The assumption that a higher salary requires a bigger house and a bigger car comes from pressure build up in the society we live in. Successful people are able to fight off that pressure.

So, where is the secret of becoming a millionaire hidden you might ask. One part of the secret is to have financial discipline and to act responsible when it comes to spending money. Even with an average salary it is possible to become a millionaire that way. Live below your means and do not spend money that you do not have. A 3 bedroom house will do just fine for you and your spouse. You do not need that big mansion style house. Instead of driving a Lexus LS400 you can drive a Toyota Camry or Honda Accord and still drive in style. You save even more money on lifestyle if you choose brands of lesser reputation. “Save” is our next keyword to concentrate on. The first part of the secret was about spending money. The second step is about saving money. It is partially overlapping with spending, but we like to point out that not spending money at all is a different way of saving. Yes, you save money by buying cheaper stuff, but you save even more by not spending it all. Example: Let go of your morning habit buying coffee at Starbucks. Your employer probably offers free coffee at work anyway so that you can get your daily dose of caffeine. Take the same money every day now and put it into your savings account. Calculating with 300 days per year you would have bought a coffee for $3.50 a piece turns to $1,050.00 total. Not bad. Now after the first year and let the money earn interest. Do this for a few years and you could easily end up with a 5 figure amount in savings.

Start using items longer before you replace them. A watch can easily go a few more years with a new battery instead of buying a new one. Driving that car another year can save you quite a bit by delaying the expense and to have your money earn interest in the same time. Delay your spending and it can put a big return into your savings account.

Smart investing is the 3rd piece to our secret. Step away from normal savings accounts and CDs as your main source of investing and saving money. Stocks and funds are your friends early on. In your 20s and 30s invest into growth and very slowly convert into more conservative options the closer you get to retirement. Eventually invest into a business yourself. You do not have to work there but offering venture capital to small businesses can often make a significant impact.

If you act financially responsible and find the right path between spending money and saving money you are on your way – believe it or not. You might not end up with 10 million or so, but entering early retirement with 1.5 to 2.5 million is plenty if you continue to live a normal lifestyle and not to go overboard.

About the Author

Christoph Puetz is a successful entrepreneur and international book author. Christoph operates a successful Pregnancy and Parenting Website. One of the other websites he maintains can be found at Pregnancy Announcements ecards.