Hello Hiveans!
“In today’s post, I’m going to talk about how you can become a millionaire with a low salary. A remarkable case is the story of Ronald Red, who, after his death in June 2014, had his face featured in all the media due to a secret he hid from everyone, including his own family. Ronald managed to amass 8 million dollars, a significant fortune, and he definitely wasn’t one of the classic millionaires you see around. Ronald was different; he grew up on a poor farm, completed high school, and worked as a janitor with a minimum wage for most of his life. In the 2000s, custodians earned around $22,000 per year, which Ronald managed to turn into 8 million dollars. And I know how he did it and I’ll tell you guys.
Let’s get started…..
Lesson No 1:
The first lesson is the wealth formula. The most important thing Ronald knew was the secret wealth formula that schools don’t teach you. The formula is the amount of money you receive compared to the amount of money you have going out. So income minus expenses equals cash flow. If you have a positive cash flow, you have money left to invest. If you have a negative cash flow, you’re in debt. Suppose your monthly income is 50 thousand rupees; if your cash flow is zero rupees or negative, it means your expenses are 50 thousand rupees or more. In this case, you’ll never be financially free. If you spend between zero and 50 thousand rupees, then a positive cash flow can be achieved. After saving enough, you can make your money work for you to generate future revenue.
Lesson No 2:
Lesson number two is how much money you’ve saved at your current age is the key to measuring if you’re on track to becoming a millionaire by 65. You need to know this so you can adjust your finances before it’s too late. Don’t matter how much you save the money, the thing which matters is, how long you save or invest your money. The earlier you begin, like with most things in life, the easier it will be to accomplish the desired outcomes.
But since I don’t know your personal financial situation, these calculations are based on some assumptions. The first is that you start with nothing; the second is that you need to increase your investment by seven percent each year, and the third is that you increase your monthly contributions each year by two percent to keep up with inflation. So if you put 1 lakh in the first year, you’ll put 1 lakh an two thousand rupees in the second year, and so on. Of course, these mathematical calculations change based on many factors, but the sooner you start saving, the batter you’ll achieve your goal.
Lesson No 3:
The third lesson Is how to increase your investments. So back to income, and it won’t be what you expect. According to one survey, more than 75 percent of millionaires come from low-income families. The one thing that all millionaires have in common is that they have many income sources, usually three to seven. Having many revenue streams has two major advantages: one is reducing your dependence on a single income, including your full-time job. You may believe that your primary job is risk-free, but it Is actually riskier than you believe because the moment your boss quits, you’re bankrupt.
The second benefit Is that you may boost your cash flow formula. If your monthly costs are forty thousand rupees, you may attempt living more frugally and cut your spending down to 35 thousand rupees. But there will always be a limit to how much you can save because surviving on nothing but rice and water also requires money. However, if you can earn just a little bit more, your cash flow will improve dramatically. You may go the typical path of working extra, asking for a raise, or even seeking a better job to make more money. Another option is to do what I used to do when I worked full-time: start a side job. It’s a great way to earn extra money. Depending on the type of work you start, it might require a few extra hours, but trust me, it’ll be worth it in the end.
Lesson No 4:
You need to go beyond the wealth formula. Ronald didn’t become a multi-millionaire just by perfecting this cash flow formula; he was hiding another secret. And when he died, the truth was revealed. Ronald’s secrets were actually unknown even to his family. Throughout his life, he had invested in around 95 different stocks. After reviewing all his investment options, I decided to give you some advice: it is critical to invest wisely. I’ll show you the simplest method to get started, but first, here’s a critical error to avoid.
Day trading is definitely something you’ve heard a lot about. Many advertisements on TikTok, Instagram, and YouTube show people examining charts and buying and selling 20 times per day in the hopes of generating a rapid profit. You might think it’s really exciting and the key to getting rich. What they don’t tell you is this: 90 percent of day traders are losers. Ronald never traded because of his knowledge; he was an investor who focused on the fundamentals of a company, which means he analyzed the company’s intrinsic value and made sure the investment made sense quantitatively and qualitatively. So he wasn’t going to invest his life savings in risky stocks like GameStop and AMC.
Lesson No 5:
Lesson five: Ronald Reed’s plan was to invest long term. His money had accumulated over decades, and he continued to put a percentage of his janitor’s wage to his investments every month. Assume you save one thousand dollars and earn 10 interest. In the first year, you would earn one hundred dollars; you’d earn $110 in the second year. Why? Because your investment is now worth one thousand one hundred dollars thanks to the interest earned in the first year. Your investment is worth one thousand two hundred ten dollars after the second year, so your third-year interest would be $120. If we graphically represent this process, we can see an exponential growth curve. This is why Albert Einstein referred to compound interest as the world’s eighth marvel, this is how Warren Buffett made 99 of his fortune.
Final words:
A piece of advice I want to give you is to stop budgeting or tracking every expense. Do you believe that wealthy individuals have Excel spreadsheets that track all of their expenses? No, I don’t think so. They don’t have a budget, but they control their expenses in a truly unique way that makes it easier and saves them a lot of time. But don’t get me wrong; a detailed budget could still be a good idea if you have a spending problem or if you’re not financially stable. That is what I and the rich do. My paycheck is automatically deposited into my checking account, and I transfer the amount I want to save to a savings account and the amount I want to spend to a spending account every month. My spending account includes my fixed monthly bills, living expenses, etc. Here’s the trick: since I know my fixed monthly expenses, I can set spending goals for food, entertainment, travel, shopping, etc. Whatever I don’t use at the end of the month remains in my account.