Making a million quickly is easy
Key Takeaways There are now more than 11 million millionaires in the United States.
Wealthy people often quip that earning their first million was the hardest. Why is this the case?
Having money makes it easier to make more money, through investment, ability to take risks, and opportunities that reveal themselves. The Difference Between Wealth and Income For starters, it is very important to distinguish between making a million dollars and having a million dollars. Moreover, "earning" making a million quickly is easy million-dollar paycheck may not leave someone as rich as commonly thought—recent history abounds with examples of athletes, entertainers, businessmen, and lottery winners squandering their money by throwing away unthinkable amounts of money on frivolities.
More often, new graduates are scraping by to pay the rent, repay student loans, and still put together enough to have some semblance of a life. But as people advance in age and experience, the picture changes.
- Want to become a millionaire?
- I deliberately left this out of my answer because I wanted to focus on assets that were a little more liquid.
Not only do people typically see their salaries rise, but they often find that they no longer have to pay so much for those "starting expenses"—student debts are paid down, they have the furniture they need, and perhaps they have a romantic partner with whom they can share living expenses.
In fact, many wealthy people can and do "live off the interest.
Extra Wealth Means Extra Options In at least one key respect, the rich are different; they have access to investment options that regular people do not. Start-ups and venture capitalists want to attract millionaires and billionaires, not regular people who can invest a few thousand or even tens of thousands dollars. Similarly, it can be very difficult to invest in lucrative asset classes like farmland or timberland without a sizable amount of wealth to start.
When many people are first starting to save and invest, they zealously guard that grubstake against risk for fear of losing it all. Although it is understandable, the fact remains that the ties between risk and reward are hard to break.
Our smart strategies will help you reach (or surpass) the seven-figure milestone.
Though investors may rightly fear the relatively small risk of "losing it all," playing it safe means that they are earning lower returns and making it all the more difficult to build towards that first million. Conversely, once people have enough wealth that they feel comfortable and not particularly vulnerable to an economic downturn or bear market, they often take bigger risks.
Not all wealthy people invest this way Warren Buffett being a famous example of a wealthy and very conservative investorbut many do. The Bottom Line There is no point in minimizing the fact that it is hard to build that first million dollars of wealth.
But just because something is difficult is no reason not to try. Try to save as much money as possible, invest that money with a prudent balance between risk and opportunity, and be on a never-ending hunt for ways to work better, smarter, and harder.
After all, the rewards are there to be won and figuring out how to make the second million dollars is a problem that is certainly worth having. Article Sources Investopedia requires writers to use primary sources to support their work. These include white papers, government data, original reporting, and interviews with industry experts.
We also reference original research from other reputable publishers where appropriate. You can learn more about the standards put options trading follow in producing accurate, unbiased content in our editorial policy.
Fastest Way People Turned $1 Into $1 Million?
Securities and Exchange Commission, Investor. Compare Accounts.