8 Skills That Will Make You A Millionaire
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For some people, this will be hard to believe but each and every person has the potential to be rich. However, what separates those who achieve significant levels of wealth and those who don’t, are the skills they choose to cultivate throughout their lives.
Therefore, in today's post, I will share with you 8 Skills That Will Make You A Millionaire that you can start using now and begin to grow your wealth!
Skill #1: Goal Setting
Having well-defined goals is like having a map and the more detailed the map is, the easier it will be to get where you want to go. Unlike those who lead financially mediocre lives, the rich leverage the most effective goal setting and steps to achieve their goals.
Firstly, the rich set goals using the SMARTgoal framework. This method requires your goal to be specific, measurable, achievable, realistic, and timely. For instance, using the SMART goal framework, your financial goal could be, “Increase my income by $30,000 in 12 months by completing10 extra freelance projects”.
Having a robust goal that satisfies all the elements of the SMART goal framework will make you significantly more likely to reach these goals especially when you compound this technique with the other millionaire goalsetting secret. What most millionaires will tell you about goals is that they must be written down.
A Harvard Business Study found that the 3%of graduates from their MBA who had their goals written down, ended up earning ten times as much as the other 97% put together, just ten years after graduation. But once you have your goals written down, you must also review them. It’s stated that people who very vividly describe or picture their goals are anywhere from 1.2 to 1.4 times more likely to successfully accomplish their goals than people who don’t.
Therefore, it’s not enough just to set smart goals but reviewing them daily will further reinforce their importance allowing you to achieve them quicker!
Skill #2: Making Finances Fun
Whether it’s checking off another day of no spending on your calendar or striking off one of your long-term income goals, the act of hitting any financial milestone is a great way to build financial momentum.
In fact, hitting these goals can be so important to your overall success that many financial advisers will often suggest strategies that allow individuals to gain these bursts of momentum rather than taking the most economical path possible.
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For instance, paying off smaller debts first, even if the interest rate is higher on larger ones, isn’t as financially beneficial but taking debt or two off your plate provides you with the motivation you’ll need to continue your debt elimination journey. Therefore, if you aren’t already setting financial goals then it should be a top priority in your new and improved financial life!
Skill #3: Ability To Identify Opportunities
Whether you realize it or not, there are opportunities all around us and the people who can seek out and capitalize on these opportunities are the ones that are much more likely to become rich. Unfortunately, many people believe that being able to identify opportunities is a skill that you are born with but this simply isn’t true.
Like being able to type or read, identifying opportunities is a skill you can learn and master. Let’s take the example of an abandoned house. For most people, this dingey property would be an eyesore that would be instantly overlooked. However, what if you had invested the time and energy to learn about housing foreclosures, housing markets, and property renovations?
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Perhaps this house is located in one of the most up and coming neighborhoods in town and the foreclosure of this property means that you can acquire this home for a fraction of what it would typically cost. Then, with a little work, you can turn that seemingly useless property into a wonderful home for yourself or the tenants that will pay you each and every month to inhabit it.
As you have probably realized through this example, by raising your level of awareness through continuous education (whether formal or informal) you allow yourself to see new opportunities and use these situations to make you rich!
Skill #4: Time Management
Time is without a doubt our most precious resource but sadly millions of people waste this time watching Netflix or mindlessly surfing the web and then wonder why they aren’t reaching all of their financial goals.
The truth is that the rich are ruthless in the management of their time. But maximizing the use of your time doesn’t just happen, it requires the implementation of time techniques to make every second count. For instance, many time-conscious individuals like to prioritize their daily tasks and ensure they tackle their most important tasks first thing in the morning.
This time management technique is powerful as it allows you to ensure you complete your most value-added tasks every day and gain momentum as you strike off your hardest tasks from your to-do list. Another strategy the rich use is having themed days. By grouping your days of the week by activity, you can maximize your level of focus and allow for more deep work to be done.
One strong supporter of themed days is Twitter founder Jack Dorsey. He says that having these themed days allows him to stay on task and avoid interruptions and distractions. If a task or request is not in theme with the day, he does not address it. Jack splits up his week as follows: Mondays are for management, Tuesdays are for product development, Wednesday’s are marketing and growth, Thursdays are for developers and partnerships, Friday’s are for culture and recruiting, Saturday is his day off and finally Sunday’s are for reflection, strategy, feedback, and getting ready for Monday.
Now, while not all rich people use these themed days, most understand the importance of staying focused when trying to conduct quality work. Whereas most people think that they are accomplishing more when multi-tasking, they are just fooling themselves. Numerous studies have been published that highlight the ineffectiveness of multitasking.
In fact, the American Psychological Association found that task switching can lead to a 40% decrease in productivity. In short, if you want to become a millionaire then you must employ proven time management strategies to maximize your daily output!
Skill #5: Money Management
It’s for this reason that the rich cultivate their money management skills continuously. They know how to use the money they make to make more money. They multiply their wealth by getting their money to work for them. Most people don’t know how to make money work for them, so they never stop working for money.
Most people spend the majority of their income on personal expenses and whatever is left will typically sit in a low-interest savings account. What allows wealthy individuals to grow their riches is by keeping their personal expenses low and putting their remaining income to work. They don’t let their money sit in any one place for very long. They put it works by using it to grow their business or purchase investments that would yield a return.
By minimizing personal expenses consistently for several years while continuing to re-invest as much money as possible into income-generating activities, these individuals can compound their wealth in a relatively short period.
Skill #6: Delaying gratification
We live in a world of instant feedback and while it is nice to receive a text message in a moment’s notice or get the package you ordered the very next day, this quickness that we enjoy regularly has made it that much harder to delay gratification.
Sadly, most people are very impulsive and entertainment-driven. They often spend money on unnecessary things that give them immediate pleasure but have no real long term benefits. However, the rich know that deferring pleasure and playing the long-game is the key to building true wealth.
Wealthy individuals have the discipline to not waste money on unnecessary items. They forgo the desire to spend money today and, instead, sock it away into savings and investments that grow in value and provide financial resources that can be used in the future.
This habit of delaying gratification is known as delay discounting, and it takes place when someone decides to 'discount' the value of future rewards to immediately gratify themselves, even though accepting a lesser reward inexactly rational. But don’t just take my word for how important this skill truly is.
This habit of delaying gratification is known as delay discounting, and it takes place when someone decides to 'discount' the value of future rewards to immediately gratify themselves, even though accepting a lesser reward inexactly rational. But don’t just take my word for how important this skill truly is.
In a study of over 2,500 people, participants were asked whether they would hypothetically accept a smaller sum of money (US$500) or a larger sum ($1,000) after a delay, which could be one day, one week, one month, 6 months, or one year. When the researchers used machine learning algorithms to model the relationship between individuals' tendency for delay discounting and the other self-reported variables, they found that delay discounting was more predictive of income than age, ethnicity, race, and height.
Therefore, the rich develop this skill by making the sacrifices that the average person doesn’t and as a result, they are now able to enjoy life at a level that the average person can only dream of.
Skill #7: Staying Organized
The rich know a secret about the organization that the poor don’t.
Ask a poor person how they feel about organizing their finances and they will tell you it’s a waste of time but the rich know that when done properly, the good organization doesn't really take time, it makes time.
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This is especially true when it comes to financial management. If you have to hunt here and there to find your checkbook or bank statements, if you can’t find statements for bills that the mayor may not be due, or if you have to sort through a big stack of papers to find a name or address, you can lose a lot of time.
If poor organization results in a late payment you may end up with exorbitant late fees and in some cases poor credit and higher interest insurance payments. Yes, even things like car insurance rates are determined by your credit ratings!
Therefore, if you want to live like the rich then organize your finances and use that freed up time and money to further grow your wealth!
Skill #8: Ability To Focus On High-Value Activities
Like I said earlier, rich people are masters of time management, and one of the ways they maximize their output is by remaining conscious of the value of their time. They continuously ask themselves if the tasks they are working on is of significance so that they can spend the majority of their time on high-value activities.
But what are high-value activities? In the business sense, these activities are the ones that will yield the greatest returns. For example, an entrepreneur whose goal is to earn $1,000,000 in a single year and is prepared to spend 2,000 hours on work-related activities, calculates that the value of one hour of his time is $500.
To achieve that goal, that entrepreneur must spend his time on activities that are worth $500 per hour to their business. You can’t expect to earn $1,000,000 in a single year if you spend the majority of your time on activities that can be delegated to someone else for less than your hourly rate
. So how do millionaires identify which activities are worth their time and which aren’t? The rich identity of their daily activities by their potential to grow their wealth. For instance, if you run a business, what activity seems like it will yield a greater return, updating your client contact list or holding a sales meeting to close a new client? Of course the latter.
They focus as much time as possible on those activities and they delegate the other activities, like administrative duties to other people. This is really the 80/20 principle in action. The rich analyze what 20% of their activities are yielding 80% of their returns and then ensure that their time is focused on these tasks.
In fact, successful business owners do this same analysis with their clients. It is not uncommon for a small percentage of clients to make up the bulk of your revenues. If this is the case, why would you focus your time and energy on clients if their potential for revenue generation was minimal?
In short, if you want to become rich you need to analyze how you spend the precious hours of each day and ensure that they are packed solely with high-value activities!
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