Many dreams of becoming rich so that they can afford all the pleasures of life without worrying about tomorrow. Even if it seems utopian, it is possible to access the ease that comes with wealth, regardless of your starting situation. The proof is that there are dozens of stories of men and women who made their fortunes from scratch. To get there, however, you have to have the right mindset and proceed in stages.
HOW DO BECOME RICH FROM NOTHING
Synonymous with freedom, material “wealth” attracts the independence it provides. Depending on the case, being rich means freeing oneself from a job, disposing of one's time as one wishes, living where one wishes, traveling, offering certain security to oneself and one's family... The definitions of the wealth and goals of each are very different and even subjective.
For one person, being rich can be the ability to spend everything and anything without counting: a nice house, a nice car, nice trips, nice clothes... For another, it can be a question of reaching a certain amount. of assets, 1 million euros for example.
And for someone else, "wealth" may simply mean having enough money aside to live comfortably without going overboard, for example touching the equivalent of 2000 to 3000 euros. net per month without having to work.
Whatever the definition, unless starting from an existing heritage, for example, acquired by inheritance, wanting to achieve financial freedom requires adopting a certain way of thinking. Setting a clear objective to be achieved within a given time frame is a good starting point (aiming for example for one million euros before the age of 30).
Wealthy people have in common audacity, determination, and the ability to grow their earnings. These are essential qualities that promote risk-taking and encourage perseverance. This last quality is very important because aiming to become rich sometimes requires effort and a lot of sacrifices. In the end, it is a privilege that is not within the reach of those who give up easily.
To hope to become a millionaire, it is necessary for particular:
- constantly thinking about the best way to increase your income,
- multiply your sources of income (have at least 3),
- save in order to invest in a lucrative activity,
- invest in oneself (reading, various training courses, etc.),
- surround yourself with people who have a similar vision, and if possible people who have succeeded,
- avoid showing off, so as not to lose the little that has already been acquired by spending money on things that are not worth it.
Either way, the journey to becoming rich enough that money is no longer an end in itself is not a long, smooth road. It requires you to aim as high as possible and to imagine yourself achieving all the goals you have set for yourself. But also to think about a plan B in case of failure or to circumvent the difficulties.
WHAT CONCRETE METHODS TO MAKE A FORTUNE
Increasing your income and becoming a millionaire is an accessible dream, as long as you work at it with determination, often without counting your hours, and if you are accompanied by a little luck. As the following examples show, there is little chance of making a fortune by remaining passive. Apart from any inheritance and if you don't win the lottery, becoming rich requires hard work and taking calculated risks.
HERE ARE SOME AVENUES YOU CAN TAKE TO MAKE MONEY.
- Start a business to try to get rich
Becoming your own boss is a good way to gain financial independence or even a certain level of wealth. Be careful, this does not mean that all business creators make a fortune, far from it.
To succeed, you have to start by finding an idea that can be monetized. Because to be profitable, this idea must meet a need among consumers or users.
Beyond the decision-making, it takes a lot of work upfront. It is necessary in particular to take into account the competition, analyze the market, estimate the selling price of its product or service as well as the costs that will be necessary to put the offer in place (employees, raw materials, manufacturing costs, etc.).
Similarly, we must not neglect the commercial efforts that will have to be made to find customers. Because even with know-how, an innovative or exceptional product or service, success is never possible if you don't know how to sell. The tools of marketing, communication, and commercial canvassing with customers or distributors are key success factors that are difficult, if not impossible, to overcome.
Most of the time, implementing one's plans requires obtaining funding in order to invest. This may involve mobilizing savings to meet the company's first expenses. Often, the family investment, also called "Love money", is solicited in the first circle of the entrepreneur. This is also the choice made by the founder of the Back Market site, a French unicorn valued at more than 5 billion euros after only 7 years of existence.
Subsequently, the investments can be covered by bank loans and by raising funds from business angels or investment funds. Certain networks of entrepreneurs can also help, by providing grants and honorary loans.
In any case, the project needs to be carefully considered upstream and its presentation to third parties must be credible.
- Invest in the stock market in to hope to make a fortune
Investing in the stock market can be an attractive option for anyone who wants to make a profit. For this, it is necessary to have a starting capital to invest, to choose your investments rigorously, and to set a well-defined strategy from the start. The capital can then grow over the years, thanks to the capital gains made on the resale of financial securities (stocks, bonds, investment funds) or thanks to the dividends generated each year.
In 10 years, the values of the CAC40 have more than doubled. In other words, someone who invested 10,000 euros in 2012 could have a portfolio worth 20,000 euros in 2022, not counting the dividends paid since that date.
This example calls for 3 reflections. On the one hand, the initial investment must be substantial to hope to achieve its objectives. Next, the stock market is not limited to the CAC40, and the ability to generate returns will depend on the choice of stocks included in the portfolio. Finally, there is no guarantee that these values will continue to progress at the same rate in the years to come.
It is important to realize that investing in the stock market is risky, as there is no guarantee that values will increase over time. Certainly, in recent years, stock prices have generally increased. But we have entered a period of great uncertainty, which regularly mistreats the markets (low rates, coronavirus, geopolitical context, etc.).
To succeed in this field, it is, therefore, necessary to train in order to better understand the functioning of the financial markets. And constantly and insightfully monitor economic news in order to adapt its strategy.
Behind the readers of this article is perhaps the next Warren Buffett, who became a billionaire thanks to his stock market investments. The career of this man, one of the richest in the world, is instructive. The son of a stockbroker, he started very young in the 1950s with small investments and systematically reinvested his earnings.
Determined to succeed in the financial field, he took economics courses at university, which led to a master's degree. After working for a time on Wall Street, he set up his own investment funds. His fortune is today estimated at more than 117 billion dollars.
Bernard Madoff was one of the world's most respected financiers. Billionaire thanks to the investment company he had created, former boss of the Nasdaq, his empire collapsed after the Subprime crisis in 2008, which revealed that his system was only a scam based on a pyramid of Ponzi. His fall brought ruin to many people around the world.
- Investing in cryptocurrencies to try to get rich
Cryptocurrencies and other crypto assets are one of the sectors that hold the most hope for many investors, especially the youngest. The stories of people who have made a fortune thanks to Bitcoins are obviously dreamy.
A person who invested 1200 euros on January 1, 2016, could have bought 3 Bitcoins. In November 2021, he could have sold them for nearly 169,000 euros. In just over 5 years, the cryptocurrency has indeed multiplied its value by approximately 141.
But there again, let's not be mistaken. The risk is great. The number of cryptocurrencies has multiplied. It is not clear whether all will progress in the future and in what proportions. In addition, prices are very volatile, they fluctuate regularly upwards and downwards in large proportions. While a few were able to make a fortune, many also lost money.
So is it possible to get rich with cryptocurrency? Maybe or maybe not. On the one hand, institutional investors like banks and insurers are increasingly betting on the sector, which is a sign that it is becoming credible. On the other hand, States often see their development in a negative light and try to control them.
Throughout the world, El Salvador has adopted Bitcoin as one of the country's legal currencies. Conversely, China has banned cryptocurrencies. It's hard to know what the future holds for cryptocurrencies as a whole and each one in particular.
Investing in this asset class requires taking risks. The uncertainties are such that it could, without certainties, provide access to wealth, but at the risk of losing all or part of its investment. As with a stock market investment, you have to remain cautious by not betting all your savings and by defining a strategy.
Elon Musk, a billionaire of South African origin, and boss of Tesla and Space X are one of the defenders of cryptocurrencies. He believes in the rise of "Defi", decentralized finance, and regularly shares his opinion on this subject on social networks. He nevertheless built his fortune by creating very concrete companies and by always taking more risks.
Son of a real estate developer, he graduated in physics and has read all his life to learn. Passionate about computers, he became aware of the future development of the Internet very early on and launched his first software publishing company in 1995.
He was quickly able to resell it for more than 340 million dollars. The amount that he reinvested to create the company that has now become a giant in Internet payment: Paypal, itself resold a little later to eBay for 1.5 billion dollars. The businessman then reinvested his earnings to found Space X, a very risky venture that nearly ruined him on multiple occasions. He also invested in Tesla shortly after the firm was founded.
- Invest in real estate to become a millionaire
Real estate is a sector that has, until now, proved to be quite stable for investors despite price fluctuations. It remains one of the pillars of the French for accessing additional income through rental investment.
The principle is simple. By buying a property and then renting it out, the individual generates income. In the best case, it must cover the amount of the credit installments. Once the loan has been repaid, the rent constitutes additional net income.
To invest at best, it is necessary to know how to find a property with high rental potential, negotiate its price and estimate the costs (works, management, etc.) to create a profitable investment. For the wealthiest, the investment is often made within the framework of family structures, such as SCIs, family SARLs, or even small property companies.
But rental is not the only way to access wealth through real estate. Many individuals are turning to the status of a property dealer, which consists of buying property to be renovated and then reselling it for a higher price once the work has been carried out. This purchase-resale mechanism, which can also be financed by a loan, logically makes it possible, when the operation is well put together, to generate a margin that can then be reinvested in the purchase of the following property.
The riskiest activity, but also potentially the most lucrative, is that of a real estate developer. By buying land to build a real estate to resell, it is possible to generate a significant margin. Nevertheless, the operations are often long (between 18 and 24 months) and fraught with pitfalls. They again require good training to understand the financial, legal, technical, and commercial knowledge to master and succeed in their operations.
Patrice Pichet is the founder of the Pichet group, a property developer. A graduate in economics, this Bordelais started by working in a company of individual houses before buying his own land to carry out his first real estate development operation in 1988.
Since then, he has always worked to multiply the activities of his group to consolidate it and offer it stable growth. In 30 years, he has managed to raise his company to the top rank of family real estate groups in France. According to Forbes magazine, he and his family are at the head of a fortune estimated at 1.3 billion euros.
- Bet on luck while playing the lottery
Probably the quickest way to make a lot of money all at once is to win the lottery or the Euromillions. Nevertheless, it should not be forgotten that the chances of winning the jackpot remain low: 1 chance in approximately 20 million for the lotto and 1 chance in 140 million for the Euromillions... A low rate should encourage playing with measures.
HOW IS WEALTH MEASURED
In most countries, a person's level of wealth is estimated based on income or wealth. The various rankings of the richest personalities in the world are thus based on their fortune, evaluated in euros or dollars.
In other cases, it is the company's turnover or even the amounts of real estate held which are taken into account as a basis for comparison. Anyway, each society has its own codes to determine who among its members is the richest.
Wealth, however, should not be confused with lifestyle. Indeed, a person's situation can change (from poverty to wealth or vice versa) depending on various factors. A rich person can thus be ruined quickly if he does not control his lifestyle. A person with low or middle incomes can significantly increase their wealth by reducing their expenses and making thoughtful financial investments.
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