For many people, becoming a millionaire is something we dream often on our financial journey. Because it usually means having financial freedom, security, and success.
Picture having a million dollars in your bank account right now. How would you feel? What would you do? How would your life change?
Many people think that becoming a millionaire is the ultimate goal for anyone who wants financial success and freedom. But is it really?? Does the word 'millionaire' still hold ground like it was perceived in previous years? There weren't many millionaires back then, things are a bit different now.
You know, that annoying thing that makes everything more expensive over time? It turns out that inflation has a big impact on how we define and measure millionaire status.
Inflation is basically when prices go up and money buys less stuff over time. A good example is in commodities. Their prices are always up and up.
On a wider scale, most goods and services increase in price over time. So what a millionaire can buy or afford in the year 2000 is very different from what a millionaire can do today. What's worth $1 million is 2000 is now worth $1.65 million. $650K increase.
Inflation also affects how easy or hard it is to become a millionaire. If we take the savings route, $10,000 saved for 5% annual interest rate will take around 25 years to achieve millionaire status.
This doesn't account for any inflation. Let's say inflation of 2% is put into the picture, then it will take around 32 years! In truth, no body became a millionaire from saving these days.
We can learn from the example above that we need to earn and invest more to achieve the same level of a millionaire in the previous decades.
Another thing we can learn is that we will not feel rich achieving millionaire status today because we frankly wouldn't be able to do much with it especially from a wealthy lifestyle perspective.
Perhaps, Being a millionaire today is equivalent to being a "thousandaire" in the past.
Technology increased the scope of what it means to be a millionaire. It has created a boost in economic growth, fuelled entrepreneurship and innovation. Financial information and services are readily available to all. And many are utilising it well to increase their financial status.
On another note, it has changed how people define and measure 7 figures status. Some people consider themselves millionaires based on their net worth (assets minus liabilities). While others may choose to consider themselves millionaires based on their income (earnings before taxes).
And there are groups of people like myself who may use different currencies or exchange rates to convert their wealth into US dollars or other units of measurement.
Speaking of wealth, technology has also created new forms of wealth and value that are not captured by traditional metrics.
For example:
Some people have a large following on social media platforms, such as Instagram or YouTube, that can generate income and influence.
Some people have valuable digital assets, such as cryptocurrencies, NFTs or domain names, that can appreciate in value over time.
Both have created a new generation of wealthy individuals especially the first example. The second one is in its early stages.
Well, between inflation and technology. I'll say that it is easier to become a millionaire now compared to before. I'm presuming that technological development can beat the rate of inflation.
But since the dynamics have also changed in getting wealthy. It means that we no longer have to cling to old ideologies to become a millionaire. Rather, it means that achieving a millionaire status is no longer a straightforward goal.
So it requires adapting to the changing economic and technological environment. And also, being flexible and creative in finding new ways to create and capture value.
Thanks for reading!! Share your thoughts below on the comments.
