The Realistic Path To Becoming a Millionaire

Introduction

Welcome to our first finance-themed blog, where we thought we would provide some interesting insights on the practical, realistic path to a millionaire. Note this isn’t here to deter you from taking big risks in your early 20s, trying to build that big business or personal brand, but rather provides an alternative focus, with practical steps and actionable advice, moving away for the ‘get rich quick’ instant dopamine content you see on social media.

We talk about building financial stability and useful skills, strategic investing, and side hustles, along with a central theme of sensible financial management. Enjoy the blog, and let us know your thoughts in the comments section below.

1: Build Skills for Financial Success

Whilst chasing financial success, people often focus on investing in assets, striving to buy property, equities, and crypto. Although this will to some extent provide tangible returns, the problem is the majority of us do not have the capital required to make any substantial short term gain, or the knowledge required to sustainably do so. Men in their early 20s should focus on making wise career choices, not from a ‘joining the rat race’ perspective, but a personal skills development perspective. Opt for roles that provide financial stability, but also allow you to acquire sales, negotiation and effective communication skills. In any long term business, or career path, these skills are crucial in selling yourself and your product. Learn to navigate business settings and close deals. Consider your career not just as a source of income, but a training ground for your future self.

Cultivate a growth mindset. Seek mentorship, invest in education, and stay abreast of industry trends and commerical awareness.

2: Strategic Investing - The Power of Index Funds

Now you have accumulated to some extent some wealth from your career, we must enter the world of investment, with a focus on sustainability and long term growth, minimising risk. Again, to reiterate, this does not mean you should not be taking arguably larger risks with investments and attempts at business, but this should be something that you have at least some focus on in the background at the very minimum.

The power of compounding makes beginning early critical to acquiring mass wealth. By investing wisely, you allow your money to work for you, multiplying its impact over a few decades.

The S&P500 is widely recognised as an index fund that can provide reliable returns, and is our chosen vehicle for accumulating wealth in the background. Sure, there is a probability that picking individual stocks or trying to ‘outsmart the market’ may provide larger returns, however it is often proven that even top asset managers do not beat the market. The S&P500 comprises of the 500 largest US companies, providing strong fundamentals and foundations for growth. See below an excellent overview by Mark Tilbury on how to utilise these types of funds.

3: Supplementing Income - Side Hustle

Having established a strong foundation of skills, a regular source of income, and began to invest for strategic, sustainable gains, it is likely a sensible choice to begin a small side hustle. Not only does this diversify your revenue sources, but it also provides the flexibility to further fuel your investments and maximise the potential that the compounding effect creates.

It is important to choose the right kind of side hustle. One that resonates with your interests and skills, and something you will be willing to work weekends and evenings on. The goal is to generate small to medium amounts of income, rather than millions within weeks (however, of course this isn’t a bad thing to aim for). The idea that this supplementary cash becomes a catalyst for funding investments, ensuring you have sufficienty liquidity to invest.

A nice target that I like to have is to try and get as close as possible to maxing out my tax-free stocks and shares ISA a year (£20,000). This forward-looking approach drives motivation, but also ensures that you save your money and strive towards this target. Take a look at the video below for some motivation and ideas of what side hustle you may want to take on.

4: Tax Optimisation

Although briefly touched on in Section 3, it is important to emphasise the necessity to maximise these tax-free investment accounts. Shield your gains from the tax-man, and allow your wealth to grow more efficiently over time. Contribute to your ISA, allocating your side hustle earnings here (preferably into an S&P fund), and safeguard these capital gains from tax. Once you have exceeded the maximum ISA value, you may want to look at setting up business in other territories that benefit from tax-free systems, or more simply look at investing in things such as premium bonds (sure, the return isn’t incredible, but they are still tax free gains).

If you’re interesting in learning more about tax optimisation then feel free to check out our blog Navigating Taxes: Maximise Returns Minimise Stress — The Masculinity Project. We go into great detail about how to file your taxes and get the best return from them.

5: Practice Key Financial Management Principles

It is all well and good succeeding in the above four principles, but you also must learn to navigate the intricate path of budgeting, saving, and managing debt.

Yes, the word budgeting is boring, however you must allocate your resources wisely. Finding the realistic way of life for you, where you can still enjoy day to day luxuries, whilst encompassing living expenses, and savings/investment goals is tough, and will take time for you to find your personal balance.

What I found helped in my early years was a focus on consistent saving and automation. Establish a routine of investing and saving before you pay yourself. Allocate a set proportion of income that automatically transfers to your savings or investment account to ensure consistent disciplined money management.

Avoid unnecessary debt. Contemplate whether you need the mortgager or student debt right now. Yes, people often say this is ‘good debt’, but can you achieve the same path without a university degree? If the answer is yes, then maybe consider the other options. Minimise debt for material goods until you have such a sufficient income, that it makes sense to raise debt to buy luxuries, and use the capital you would’ve overwise used to purchase said luxuries to provide an even greater return. Make your money work for you.

Conclusion

As we conclude today’s blog post, I think it is evident that financial success is not about large short-term wins, but medium to long term frequent wins, combining skills, investing, supplementary income, tax considerations, and financial management to truly maximise the probability that you become a millionaire.

Yes, becoming a millionaire is ambitious, but it is truly attainable to the people that want it enough. Embrace the journey and celebrate small wins, but keep your eye on the long term goal.

Let us know your thoughts below.