I used to think to be a millionaire all you had to do was make a lot of money. Then I realized most people earning six figures don’t have two nickels to rub together.
What’s the secret then? Living below your means so you can save, and then investing those savings.
And it took me a long time to realize there’s only so many expenses you can cut, so why not focus on earning more. What you can make is nearly limitless.
You see, it’s not only about investing in things like stocks or real estate, it’s about investing in yourself.
I’ve never believed you have to “spend money to make money”, because looking back I made five investments that helped me become a millionaire by 35 that cost little to nothing.
Investment #1: Get a career mentor
The biggest career mistake I made was not having a mentor. I naively thought the harder you work the faster you climb, but the key to getting ahead is being able to show your value.
A mentor helps you do that.
You want to look for someone who’s five years ahead of you in your career. Someone who’s an overachiever and has the position or talent you want.
Then simply ask them if they want to get coffee, or you can meet them at their office. Surprisingly, most people say yes.
And when you meet them make sure you bring a list of questions, problems, or topics you want to cover.
Here’s a good framework to follow: what you recently achieved, what setbacks or challenges you’re facing, and what approaches you might take to solve them.
I wouldn’t be where I am today without reaching out to people I admired, and asking them for help.
Investment #2: Surround yourself with the right people
We all know you’re the average of the five people you spend the most time with. If you’re not surrounding yourself with smart, ambitious people, it’s time to change that.
I first heard the term “mastermind” in Think and Grow Rich. Napoleon Hill defined it as:
“Coordination of knowledge and effort, in a spirit of harmony, between two or more people, for the attainment of a definite purpose.”
To say that another way, it’s a group of growth-minded people who meet regularly to support each. To brainstorm, to share expertise.
After finding only paid ones charging thousands of dollars I tried starting my own mastermind. The first one failed, as did the second.
Then, while attending a conference in Portland, I was talking to a guy who mentioned his mastermind was looking for a new member.
Since 2015 the four of us have been meeting every week for an hour, and I’m constantly amazed at how much I’ve grown with the group’s advice and knowledge.
Investment #3: Stack talents on talents
Billionaire Warren Buffett was asked what he thought was the best investment anyone could make:
“Investing in yourself is the best thing you can do. Anything that improves your own talents; nobody can tax it or take it away from you. They can run up huge deficits and the dollar can become worth far less. You can have all kinds of things happen. But if you’ve got talent yourself, and you’ve maximized your talent, you’ve got a tremendous asset that can return ten-fold.”
That could very well be the best investment advice Buffett has ever given.
What he’s saying is keep adding to your talents. Things like public speaking, writing, design, persuasion, technology, a second language.
This makes you the architect who’s a great public speaker and writer. Or the personal trainer with a mastery of psychology and persuasion.
Better yet, this is how you become more valuable, and when you’re more valuable people pay you more for what you do.
Investment #4: Remove decision-making
I used to eat out for lunch, and it’d go something like this:
“Do I feel like Mexican food? Indian? Mediterranean? Okay, how about Mexican. There’s the taco truck, that hole-in-the-wall place, maybe try something new.”
Okay, how many hours of my life did I waste just thinking about lunch? A lot. So I decided to try eating the same simple lunch every day: a sandwich and yogurt.
It sounds insane, but this changed my life because I didn’t need to think about lunch anymore. The decision had already been made for me.
Like Scott Adams says, “Losers have goals, winners have systems.” And these types of systems can be applied across your life.
For example, you can have a certain dollar amount, say $100, automatically diverted to some simple investments before your paycheck ever hits your bank account.
This way you’re spending what you have left after investing, instead of investing what you have left after spending.
Investment #5: Commit to being a lifelong learner
Someone on Quora once asked how to be as great as people like Steve Jobs, Elon Musk, Richard Branson. Justine Musk, Elon’s ex-wife, wrote an incredible answer:
“They are more likely to go straight to a book: perhaps a biography of Alexander the Great or Catherine the Great or someone else they consider Great. Surfing the ‘Net is a deadly timesuck, and given what they know their time is worth — even back in the day when technically it was not worth that — they can’t afford it.”
I imagine my time is worth $350 an hour, and ask myself what’s worth $350. Media consumption? No. Watching TV? No. Reading, learning, studying? Yes.
So why not try picking up a book and upgrading your knowledge. The game here is to make growing and stretching a lifelong pursuit.
This was originally posted on CNBC in July 2018. Re-posting it here for a permanent archive.