5 things you should practice to become a multi-millionaire
Have you ever wondered what it takes to become a self-made multi-millionaire? Or does it feel too distant that it’s just a dream? Is the American Dream dead for millennials and Gen Zers? Unquestionably, the world is rapidly changing, and our generation is left to navigate it with very little guidance. The jobs that our parents’ generations did to become rich most likely won’t make our generation rich. With that said, I strongly believe that the American Dream is still alive and that the recipe for success is a set of behaviors, not a set of instructions. My family came to America in the late 1980s as refugees, and in one generation have been able to go from the bottom 5% to the top 1%. In this article, I will distill it down to the 5 behaviors, with examples, that I believe is the foundation for financial and career success.
#1 Understanding opportunity cost
Opportunity cost is the loss of potential gain from other alternatives when one alternative is chosen. In other words, by doing one thing you give up the ability to do something else. Successful people are intentional about their decisions and aware of what they are giving up in order to make them. This is especially important for people with multiple really good opportunities.
Example 1: Recently, a good friend of mine presented his career situation to me. He was deciding between joining a startup vs joining a bigger company whose guaranteed compensation was 3-5x greater. He is truly torn because he really believes in the startup’s team, mission, and growth potential. For many high-earning professionals, this is the type of big decision you will make every several years and it has a significant impact on your wealth, career trajectory, and even personal fulfillment. To my friend, I told him everyone’s north star is different, so my decision shouldn’t be his. He’s still hungry with his career, I’m not. I want that guaranteed road to FIRE, now. He doesn’t care about it as much. The moral of the story is, as long as you’re intentional about these big decisions and have measured the opportunity cost from all angles, you will be able to consistently put yourself in good positions to move closer to your north star goal.
Example 2: I graduated college when I was 20 years old and had my first job at IBM. I thought to myself “is this it? I’ll be getting a pedestrian 3% raise each year, and will be working in an environment where seniority matters more than merit?” Sure enough, I started to look for a new opportunity 6 months into that job. I thought to myself, I don’t know if the next job will be better, but the current environment at IBM was not something I could see myself ever being satisfied in.
#2 Embrace uncomfortable feelings
All of us have had phases in our lives when we are enjoying and reacting to “life,” as opposed to challenging ourselves to go outside of our comfort zone. Since most of us are humans :) our natural tendency is to take the comfortable, known route. This usually leads to average results and very little growth. Those who push, even just a little bit, but consistently, will see their skill levels increase much faster. More importantly, they will start to see opportunities open up because they are subconsciously welcoming them. Growth breeds more growth.
Example 3: Up until I was 26 years old, all I cared about was working on cool and fun things. I was getting paid a decent amount and I really enjoyed my work. So much that I would be up until 4 am every day to code. I loved that feeling of incremental progress with every line of code. I’ve had that mindset since I began coding at the age of 15. However, while my coding skills progressed to a high level, I didn’t progress in my career at the same rate. Sounds like you? I bet. Many people I manage are in this trap.
It wasn’t until I intentionally made the choice to perform the uncomfortable activities that I saw my career taken to the next levels. For me, those activities include speaking up in meetings, talking to strangers, bringing energy to meetings, and most importantly, solving non-engineering problems (e.g. business, team culture, process improvement, hiring, etc.) in service of a larger business impact.
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#3 Maniacally Prioritize
This is probably the most obvious behavior because everyone talks about it--to ruthlessly prioritize. However, what does that look like in practice? What if someone told you that they will give you an opportunity for promotion, but that meant you needed to work longer hours and wait for another 9-18 months before having that chance?
That recently happened to me. I currently manage 2 teams and was asked to manage a 3rd team. Any sane person would most likely immediately say yes. My knee-jerk reaction in that meeting with my manager was an exciting “yes!” However, before I was able to blurt that out of my mouth, I remembered that FIRE is a higher priority than the money, power, and prestige it came with making it to the next level. Why would I spend another 9 months when FIRE is less than a year away? Why would I spend all of that time to get a promotion that I won’t be staying in long-term?
Ultimately, I know what my priorities are. Family time > Money > Career Progression. Having this sense of extreme clarity is like having a mission statement for an organization or having a set of core values for a company. When I’m lost in so many variables, so many options, so much noise, I take a deep breath and go back to these fundamentals. Family. Money. Then career progression. Many people aren’t able to maniacally prioritize because they lack this type of clarity.
#4 Become an expert
Think about what you do best. Now think about where you rank in the world performing that activity. Would you consider yourself to be in the top 20% in the world at that? You can’t be a multi-millionaire without being excellent at a few things. The self-made multi-millionaires that I know of are extremely skilled in several areas. Usually, they are in the top 10% at their job. Many of them are great decision-makers especially when it comes to their career, money, and their social circles. Some of them are great at negotiating. For me, I consider myself an expert in building software, building software teams, personal finance, table tennis, and action pistol.
I’m not recommending that you become great at all of those--although they will greatly help. But the path to get into the top 10% in whatever you choose will require a set of intangible traits such as hard work, defeating failure, heightened awareness over small details, and consistency. It is the development of those intangibles that will increase your chances of improving your earning potential.
#5 Delaying gratification
The last and, in my opinion, the hardest of the 5 behaviors is the ability to delay gratification. How many of us have gotten a pay raise or a new job and immediately went out to buy a new TV or moved into a swankier apartment? How many of us have seen our friends buy a new house and we then immediately hit up our local realtor for open houses? Or bought the Tesla Model X because our cousin got the Model Y? I’ve done a couple of those myself.
The reason why this is the hardest is because people who are able to do the first 4 behaviors well are all about growth and progression. And in order to do them well, they go through periods of extreme focus, hard work, and sacrifice. But then in a split moment of mental weakness, they make a decision that will undo their achievements or at least greatly stunt their next growth move.
I’ve been on my road to FIRE for over 7 years now. And the temptation to splurge on something big comes all the time. This is especially true when I see friends and coworkers living well, going on $50k vacations (apparently a multi-month cruise around the world costs $25k per person), buying $150k cars, and living in multi-million dollar homes. But my desire to control my time and be in an environment that is suitable for my family far outweighs homeownership, vacations, cars, and even job promotions.
Conclusion
There is no guarantee that you will become a multi-millionaire if you consistently practice these 5 things. However, I can assure you that they will greatly increase your chances of getting there. The magnitude of your success will depend on what you apply these behaviors to and how long you do them for. And if you find yourself not making enough progress financially, revisit behaviors #1, #2, and #4 to find ways to increase your earning potential. Good luck!
In my next blog, I will be giving an update on my FIRE situation. I have some really exciting news! Standby.
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