The Realistic Path to Becoming a Millionaire, According to Self-Made Millionaire Steve Davis By Steve Davis, CEO – Total Wealth Academy
Who doesn’t dream of becoming a millionaire? The problem is most people don’t go beyond dreaming about it. They imagine what they would have if they were suddenly financially independent, but they never take concrete steps toward getting there.
The reality is becoming a millionaire is harder than it looks. According to a recent study, 29 percent of people believe they have what it takes to become a millionaire. When it comes to actually reaching that financial milestone, however, only 3 percent ever get there.
What I learned on my path to becoming a self-made millionaire is that your ultimate success has everything to do with choosing the right path. The realistic path is the one that has been well-worn by millions of millionaires who have gone before you.
Learning from America’s millionaires
Before I tell you the right path to becoming a millionaire, let me tell you the wrong one. If you are relying on the income from a job — no matter how great a job it is — you are on the wrong path. I know this from experience.
I was a top performer at my job, dreaming of becoming a millionaire someday, when I was rewarded with a $20,000 per year reduction in salary. Looking back, I can honestly say the pay cut was the best thing that ever happened to me. It showed me how risky it was to rely on a job as a sole source of income.
In the aftermath of my pay cut, my journey toward becoming a millionaire really got started. I did a lot of research and discovered that 90 percent of the millionaires in America amassed their wealth through real estate investing. So I decided to get on the same path that worked for them.
Within three months of starting, I was making more money in real estate investing than at my job. I left my job and engaged in real estate full-time. To date, I’ve invested in more than 4,000 apartment units. And I became a millionaire.
Why real estate investing works
Volatility refers to something’s tendency toward change. Volatile things change rapidly and unpredictably — usually for the worse. If your goal is to become a millionaire, you want to avoid volatility as much as possible.
With that in mind, it’s astounding how many people rely on the stock market to fuel their financial dreams. The stock market is extremely volatile. When it changes — and even the most experienced investors are often caught off guard by stock market changes — the gains that have taken you years to accumulate can disappear in a matter of minutes.
There have been 18 stock market crashes in the last 100 years, which means the stock market shows just how volatile it is once every six to seven years. Invest in the stock market, and you won’t need to wonder if you’ll be affected by a crash — you’ll need to wonder when it will happen.
Real estate investing works because of the way it addresses volatility. The real estate market fluctuates like other markets, affecting the value of real estate investments. When you invest in rental property, however, you establish a second stream of income. That means you get a regular return, even when the market goes down.
In 2007, the real estate market showed how volatile it could be. My rental properties lost 35 percent of their value. At the same time, my rental income stayed steady.
And when the real estate market goes up, it goes up faster than the stock market, which means you experience a better rate of return on your investment. The average rate of return on stock market investments is 7 to 10 percent. With real estate, it’s 20 percent.
Being realistic about risk
If you are serious about becoming a millionaire, start by acknowledging risk. Then develop a deep understanding of it. Become a student of real estate investing. Read dozens of books on it. Watch videos. Find a mentor.
What most people get wrong when it comes to risk is the thinking they can avoid it. The realistic path to becoming a millionaire involves mitigating risk, not avoiding it.
Becoming an expert in real estate investing doesn’t mean you can avoid risks. It means you’ll know which risks you should avoid and which risks are worth taking.
Perhaps you have been avoiding risk — in your finances and other areas of your life — because you believe a risk-free lifestyle leads to safety and security. You couldn’t be more wrong. Avoiding risk leads to regret, not safety.
You’ll never become a millionaire if you don’t get comfortable with risk. In fact, you’ll never experience anything worthwhile if you aren’t willing to take some risks. Whether you are striving to build a family, a career, or wealth, you’ll need to take a good deal of risks to get to where you want to go.
All the things that make life worth living — love, adventure, happiness, and freedom — are only found on the other side of risk. If you choose a path that avoids risk, then you are not choosing the realistic path to becoming a millionaire.
— Steve Davis, CEO of Total Wealth Academy, has spent three decades helping Americans, as well as those outside of the US, become financially independent. Through his Total Wealth Academy, which teaches people how to build a second stream of income with active and passive real estate investment, Steve has trained hundreds of thousands of people seeking a practical path to financial empowerment.
Thank you,
Glenda, Charlie and David Cates
