How to be a millionaire in 10 steps

These are the tricks that millionaires and big businessmen use to succeed

It’s one thing to be a celebrity, and another to have a large fortune. Not all celebrities are able to take advantage of their success to invest wisely in businesses that bring them enough profits to never work again. The key is to have a strategy. Big businessmen have aces up their sleeve, such as investing in profitable assets, but with little risk, while many actors and singers use their income to boost their careers. Others bet big on their dreams, while some prefer to use their money for activism. You can copy some of their tricks.

BY: ELENA SANTAMARÍA.

Don’t squander your savings and strive to apply austerity in your life.

When we dream of being rich, we all hope to be able to spend money lavishly on what we like, but the truth is that many millionaires prefer to lead an austere life while they watch their wealth grow. Warren Buffett, one of the world’s great magnates, has lived in the same house for more than 60 years, despite the fact that during this time his fortune has multiplied considerably. Remember this wise phrase that is always attributed to him: “Don’t save what is left after spending, spend what is left after saving.” The best thing you can do is have a financial plan and dedicate a fixed part of your salary to savings each month. You will notice it.

Copy Amancio Ortega and invest in real estate assets

If there is one asset that is repeated in the investment portfolios of the powerful, it is real estate. Not only celebrities seek to increase their wealth with real estate, but also large fortunes, such as that of Amancio Ortega, choose this route. The creator of the Inditex empire has an investment vehicle thanks to the fact that he owns buildings on the most important streets and in the world. The most classic way to invest in real estate is to buy a house, although you will need to have a lot of savings. If this is not your case, try proptechs, the platforms that allow you to invest in real estate from 995 pesos. This way, you can allocate your money to developer projects, collaborate in a participatory investment or own a house in co-ownership.

Diversify your investments and don’t risk all your money on one card.

The simplest trick that all millionaires apply is to invest in various assets (shares, houses, gold, art, cryptocurrencies, jewelry…). The classic “don’t put all your eggs in one basket.” The benefits of diversifying are many, as Juan Haro explains in his book Los trucos de los ricos (Deusto ed.). Mainly, “protecting yourself against possible price drops, getting ahead of an economic crisis, achieving better returns and making your money grow.” And always with this mantra: “If something costs a high price and has a low reward, it’s not worth investing in.” The economy goes through cycles and what is a good investment today can become a bad idea tomorrow.

Take advantage of the tax benefits that are legal.

Millionaires tend to use all possible tax advantages to save money… but always within the law, because doing otherwise is considered tax evasion. One way is to create investment companies with other participants that pay low tax rates, such as SICAVs.

Take the minimum risk to obtain the highest return

Contrary to what it may seem, millionaires do not take big risks, but quite the opposite. As explained in the Bankinter blog, the key is to take the minimum risk to obtain the highest return. The advice that all experts give to avoid losing is not to invest all your money, but only a part of it. That way, even if you make a mistake, you will not suffer great losses.

Think big and trust in the great success that your ideas will have.

Take a look at Elon Musk, one of the richest men in the world. This engineer has always dreamed of sending vehicles to Mars, for which he founded SpaceX, a company with which he has signed multimillion-dollar contracts with NASA. Dare to create and take advantage of niches that no one is exploring. You never know where your ideas can take you.

Go to auctions to discover treasures and buy cheap.

“Auctions are a good place to get hold of good products at advantageous prices,” explains Haro in his book. And the rich are very clear about this. In Spain you can participate in judicial auctions of houses and other types of property, but also of vehicles or even furniture.

Lose your fear of cryptocurrencies… but be careful

Elon Musk is another of the millionaires who have applied diversification to their personal and corporate businesses. The CEO of Tesla invested large sums of money in bitcoin through this company and SpaceX, which generated profits for him. The value of these assets has skyrocketed in recent years and continues to do so (bitcoin is now worth more than $60,000), so they are an alternative, but you should keep in mind that they are very volatile (they suffer significant increases and decreases in value) and that they are not yet regulated.

Learn to differentiate between good debt and bad debt

Another trick is to learn to differentiate between good and bad debt. Good debt is debt that is borrowed at low interest rates to buy goods or services that are expected to increase in value over time or that generate income, such as a mortgage or a business loan. Bad debt, on the other hand, is debt that does not provide long-term value or increase your wealth and also has high interest rates, such as credit card debt. Learning to manage them is crucial.

Invest in your own career… just like artists do

Many celebrities invest in their careers to boost them and keep the profits of their work at home. Artists of the calibre of Beyoncé or Taylor Swift produce their tours, their clubs or their merchandising with great profits. The case of Reese Witherspoon, one of the richest actresses in the world, is different. She founded the production company Hello Sunshine to promote stories that give voice to women, such as Big Little Lies or The Morning Show.