We all dream of having a bank account filled with at least a million dollars earned from our hard work or simply winning the lottery. Putting in long hours and having more than one job doesn't equate to making tons of money. If you are waiting to be a lottery winner, keep waiting since the chances are one in 14 million.
Having a million in your bank account is more about smart planning and savings. That means you don't need to have the latest tech device or buy everything designer-made. Here is the advice on how to be rich from the experts.
Pay yourselves first and foremost.
It doesn't have to be a lot of money either. Most 20-year-olds are not making over $100,000 so starting with as little as $2/day is enough to get you there.
The graph below shows how much you should be putting aside when you are 20, 25, 30, 35, 40, 45, and so on.
Bach admits their magic number is 20. "Today, my wife, Michelle, and I each strive to pay ourselves the first 20% of our gross income," he says.
"Smart couples talk about money all the time," Bach reveals. "When you work together on your finances, you can compound the results. When you don't, the same can be said for the mistakes you will invariably make."
Investing your hard earned money to see it multiply and give you returns is key.
Finding an knowledgeable and successful financial planner is essential. Do your research, don't just hand in your money to just anyone. Ask for reference, even testimonials.
You don't need to eat out everyday at lunch, make your own food at home. Also, cut down your cable bill or cancel it all together.
Invest in a good coffee machine so you are not tempted to buy coffee everyday.
His Rich Dad, Poor Dad book sold over 27 million copies. It resonated with people when he said that you get rich by saving money not by making tons of it.
"When I first heard about this concept I was doing what most people do — trying to budget, beating up on myself for failing, and then scrambling at the end of the year to find some money to put in my retirement and savings accounts, only to find another year had come and gone and I had not made any financial progress," he writes in his book.
"I was in my mid-twenties, and I wanted to make sure it didn't hurt," he reveals. "Within three months, I realized that 1% was easy, so I increased the amount to 3%."
It was easier to make the progression by starting small.
"If you are not paying yourself first now, that's probably because you think you can't afford to," he says.
"Make your goals specific, detailed, and with a finish line," he recommends.
"People who write down their financial goals get rich. It's a fact. Study after study has shown that writing down your goals makes it much more likely that you'll achieve them," Bach reveals.
Bach says it's ok to start with baby steps, even it's just 1%.
"And that will put you on a path that ultimately will make you rich," Bach says.
He wants people to go into real estate investing.
It literally takes time, patience, saving, saving, and more saving.
They live in modest homes, are thrifty, don't indulge their kids with ridiculous expenses, and don't drive luxury cars.
They says the average millionaire only spends 10% more than the average American on a new vehicle.
This may mirror studies based on what makes people happy. It's not material possessions but rather doing things with family and friends.
But that's only if you pay it cash instead of raking up your credit card.
"If the two of you don't make your finances a priority, they won't be one," Bach concludes.