The Definitive Guide To Making $1 Million Before You’re 30

Nobody wants to wait until they are old to be rich. It’s like saving up all your sex for when you get old — it doesn’t make a lot of sense.

Having money not only buys you the things you want and need, but it also buys you time. Time to do what you want, whenever you want.

We could all use a little bit more time.

So I’m sure you’re thinking, how is it done?

If you are looking for a get-rich-quick scheme, please move on and stop reading right now.

And let’s face it, if you can't spend the 10 minutes it takes to read this article until the end, there isn't much hope for you anyway.

This will take you the best part of 10 years. It will suck at times. But if you follow what this article entails, it will work.

That I can promise.

If you were to survey the world’s population under 30, you would quickly find that not many qualify as millionaires or even close. Young millionaires are hard to find.

Even less likely, though, would be to find any who made the money themselves and weren’t the beneficiaries of large inheritances.

But I can assure you, it is possible.

Building wealth mostly takes two strategies: Outwork & Outsmart.

Before you are 30, I can say it is more about outwork, with a little outsmart creeping in later.

This will be a two-part story, with a How To Build Your Next Million coming soon. We will cover most of outsmart there.

In this half, we will look at the 5 key areas that I believe were essential in my journey:

- Start Working As Early As Possible

- Find The Right Skills

- Find A (Great) Life Partner

- Save Enough Money To Put A Down Payment On Real Estate

- Invest In Index Funds

- Repeat steps 4 & 5 (over and over again)

Let’s get to work!

Outwork

“The first $100,000 is a bitch, but you gotta do it. I don’t care what you have to do — if it means walking everywhere and not eating anything that wasn’t purchased with a coupon, find a way to get your hands on $100,000. After that, you can ease off the gas a little bit.” — Charlie Munger

If I could sum up the process for getting started in a few sentences, the above quote from Munger would be it.

Granted, inflation has probably made this more like $500k, but the lesson remains the same.

You just have to haul ass to get ahead at first.

You want to think of the decade between your 20th and 30th birthday as a phase of your life.

In this phase, it is all about hard work. It is not going to be easy. You are going to have to do the things that others won’t if you’re ever to reach the heights that others don’t.

The number one reason people don’t succeed in almost anything they set out to do is that no matter what field it is in, the secret sauce is hard work.

Lionel Messi, one of the greatest footballers of all time, once said this:

“I start early and I stay late, day after day, year after year, it took me 17 years and 114 days to become an overnight success.”

This is powerful. The most talented player of the most played sport in the entire world worked harder than anyone to get where he is today.

There is a lesson to be learned there.

They say success leaves clues, and this is true in my own experience as well. If I were to put the key factors to making a million dollars before 30 in chronological order, it would be something like this.

Start Working As Early As Possible

Anywhere. Just work.

Unless you have a bankroll from wealthy parents or the like, you are going to need to make money the hard way. Money makes money; there’s no doubt about it.

I remember calling my dad the day I finished school to ask him if there was any work with his boss. He called me back immediately and said, “you start tomorrow at 6 am”. I had never even been awake at that time before, let alone put in a hard day’s work in my life.

But this was one of the most important calls I had ever made.

I went to a place that not only paid me relatively well for my age but also had plenty of overtime available. My dad never said no to overtime, and I was stuck with him as he was my ride.

Two things came from this. I made more money than most people my age, and I also got a lesson in putting in the work. The results were clear for me to see. Put in the work, get results.

Heed this lesson.

If you constantly put in the work and improve yourself in any field, you will be successful.

At times in my life, I have worked over 100 hours in a week and done many weeks in a row of 7 day weeks. Remember, you want to be different from everyone else, so you have to do the things that everyone doesn’t want to do.

What did you expect, the sky to rain money? It’s hard, but it will be worth it.

When I told people how much I was working, they looked at me like I was crazy.

In truth, I thought they were the crazy ones for not doing it.

A great way to get into the right mindset is to think of wealth building as a game. Each week, month, or year, try to beat your previous earnings.

By doing this, it not only becomes less like work and more like fun, but it also helps to keep you focussed on progression.

Whichever way you decide to approach it, just get to work as soon as possible. The earlier, the better.

Find The Right Skills

Now that you have found your ‘anything’ job, it’s time to start thinking about a job for the future where you can make serious money.

Ideally, you want to find a field with all 3 of these attributes: something that you are good at, something that you enjoy, and something that pays well.

Number 1 and 2 are essential; number 3 is less so.

I believe you can make a lot of money in anything providing you are good at it, work hard and work for yourself (eventually).

At this stage of your life, it’s as much about learning as it is about making money. So focus on working hard, honing your craft, and learning so one day you can work for yourself.

If I was to suggest a field to move into, I would suggest two broad areas which I would go into if I had my time again.

Providing you have the requisite skills, you either want to be in industries that handle large amounts of money, or you want to be in an area where you aren’t capped by a salary in your pay structure.

Industries that handle the largest amount of money will, on average, pay the largest amounts in remuneration. You are going to get a small piece of that big pie. The bigger the pie, the bigger the small piece you will receive.

If you can’t do that, I would suggest moving into an area that has either sales commissions or has a bonus structure. Sales are great as it isn’t capped in its earnings.

A lot of people are worried about low retainers, but if you get good at selling, you literally have no ceiling.

If you can’t make a commission, try to get a bonus structure tied to company earnings. that way, you are guaranteed a raise as company profits grow over time, which they will.

Find A (Great) Life Partner

This point may not be first in chronology, but it certainly is in importance.

My most important asset has always been my wife. I don’t think it is possible to achieve anything in life without a good support network.

I was lucky enough to not only find a soulmate but someone as driven and hard-working as I was.

At first glance, this may seem relatively obvious. Two people working hard and driving towards the same goal have to be better than one.

But I think the most important aspect is likemindedness.

Many successful people have become champions in their field but losers in their family life. The pursuit of success is not easy emotionally either, with many sacrifices needing to be made along the way.

As much as you want to, you’re not always going to have time for dates. You will forget to buy gifts. You won’t always be around when they need you.

Having someone who not only understands your perspective but is also living it alongside you really helps you juggle your professional and personal life.

Marriage and successful professional endeavors have a lot in common.

Teamwork, passion, sacrifice, and love all come to mind.

If you can marry your private life with your professional life, you will have a far better chance of succeeding in both.

The best way to do this is to find the right partner, hands down.

The best investment you can make is in a great partner.

Save Enough Money To Put A Down Payment On Real Estate

A wise old man once told me that “You should buy land because that’s the only valuable thing they can’t make more of.”

Real estate has printed more millionaires than any other asset on the planet, so this is an area you want to focus on and get into early in your life.

All that hustling, sweating, and grafting is going to come in handy here as you will need a decent-sized bank account to afford a down payment.

My focus from the first day of work was always to buy real estate with the money. I’m not sure where this concept became ingrained in me, but I’m sure glad it did.

While my friends were on boys’ nights and holidays worldwide, I was building my base to start my wealth journey.

Now, I want to caveat that with the fact that I have done a lot of travel too. But I did it after I had my feet on the ground and assets working for me.

I am a big proponent of living it up; I just think you will make your life infinitely better and easier by doing a few years of hard work before you enjoy the spoils.

One of the best ways to have the best of both worlds is to have a side hustle of some sort.

My wife and I both always had a side hustle, which allowed us to save and invest our salaries while living on the income from the side hustle.

We only ever bought luxuries from the second income stream. When you are building your foundation, your salaries belong to your down payment.

After that, your salary belongs to your investments. No exceptions here.

Buying real estate must be on your radar if you are serious about becoming wealthy.

It also is a great introduction to one of the most important things to wealth generation: Cash flow.

You can’t build wealth without it, and this is one of the best ways to do it.

Real estate is not only a great wealth builder due to it being a basic human necessity, but it is also very tax effective in most jurisdictions around the world.

Remember, your biggest expense is always taxes, so anything you can do to intelligently and legally reduce your taxes should be taken seriously. Jeff Bezos didn’t get rich paying excess taxes, and neither will you.

Invest In Index Funds

For me, the stock market, coupled with real estate, is the holy grail of investing.

You just have to be in this space if wealth building is your aim (it should be).

But it’s not a walk in the park. Not only do you need to be of higher intelligence, but you also need the emotional fortitude to outlast the ups and downs.

Picking individual stocks is hard work, and most of this work should be left to the pros (even most of them don’t do very well).

This is why index funds are such a great idea. They are easy to understand and very cheap in terms of holding costs.

It goes without saying that understanding what you are doing is of utmost importance, otherwise, you may have better chances at a casino.

Well, you don’t need a Harvard degree to understand what an index fund is or why you should be invested in them.

An index fund like the NASDAQ or the S&P 500 tracks a basket of stocks. In the case of the latter, you are basically buying a diversified snapshot of the American economy.

We know that inflation will happen over time, not least because the federal reserve and other central banks tell us that they are actively targeting it. Inflation, coupled with productivity, will cause company profits to rise, causing the price of said stocks to do the same.

So it makes sense to be involved here with your money, as you are buying a portion of a top economy that will rise over time. If you don’t and keep your money in cash, inflation will erode away your buying power.

So the choice is yours, but I know what makes sense to me.

If you look at the below chart of Australian asset classes and their returns over the last 100 years, it is clear to see why equities should be a part of your wealth-building strategy. Pick an established economy, and their chart will be very similar.

Chart showing the return of asset classes over 100 years

For me, the best thing about indices or stocks is the ability to easily reinvest your returns and compound them.

This is the backbone of how Warren Buffet became one of the richest men in the world.

This is, without doubt, one of the most powerful tools you can use to build wealth. By starting when you are young, you supercharge this tool by adding another 10 odd years for compounding to do its work.

Historically the market has returned 8% per year.

If you start with $20,000 and compound it from aged 30 to 70 at 8%, you should have $414,490.

Start that same journey at 20, and your $20,000 would be worth $938,032 at 70.

Index funds are undoubtedly great, greater yet when you are young.

Time is a big component of compounding. Use it wisely.

This could also be an area where you look to exotic but more risky assets such as cryptocurrencies. When you are young is a great time to take risks as you have time to recover from mistakes.

I have told you of my experiences, but if I would change one thing, it may have been to put a small portion of my portfolio to riskier assets with less chance of working but a huge reward if they do.

If you’re going to do it, now is probably the time.

Repeat Steps 4 & 5 Over And Over Again

This is the secret sauce.

Put compounding to work.

Each time you do, it will get easier and easier because the amount of money your assets produce will grow with time. Soon enough it will feel like there are three people working in your relationship.

You rinse and repeat, but each time the asset income will grow due to the wonders of compounding. This is the start of outsmart which we will elaborate on in the next article.

If you do this, and also continue to add money from your job, you will 100% be worth $1 million by the time you are 30, I guarantee it.

Law Of Diminishing Returns

If you follow this strategy, you will become a millionaire. If you start it from a young age as I suggest, you’ll do it before you’re 30.

Done well, you may have multiple millions before that age.

What I have outlined so far, is the way to get to millionaire status initially. But like all other areas of life, more isn’t always better.

Outworking only takes you so far.

Hard work has diminishing value over time.

It will take you to your first million. But a change in strategy is required to earn every subsequent million after that.

You don’t want to come that far, to just come that far.

There is no question hard work remains an ingredient, but it transitions from being the main meal to more of a garnish.

After you taste success, hard work won’t get you much further in relative terms. You need to now work smarter.

For those of you that have made it this far, it’s time to start looking at the next decade of your lives in terms of wealth: The decade from 30 to 40. Stay tuned for “The Definitive Guide To Making Your Next $1 Million” over the next couple of weeks.

I hope you make many millions and become financially free. The hard work is worth it in the end.

Originally posted on Medium

This article is for informational purposes only. It should not be considered Financial or Legal Advice. Not all information will be accurate. Consult a financial professional before making any major financial decisions.