Business columnist Margie Grey fired off a very interesting question at bestselling personal finance author Efren Cruz during a radio interview last Monday at DZAR Sonshine Radio (1026). She asked
“Is it really possible for a minimum wage earner or someone who makes just enough for a living to become a millionaire?”
I’ve been thinking a lot about that lately. Someone who takes home P382 per day (which includes the P20 scheduled minimum wage hike in the National Capital Region announced last week) gets P7,640 on a monthly basis on a 5-day week, gross. I can’t even imagine what that paycheck looks like after social security deductions.
Saying the amount doesn’t look like much is the understatement of all time.
Efren Cruz believes it is possible to be a millionaire from this starting point. But it will take more than lotto tickets and candy-colored dreams. In many cases, it will involve getting a second job or extra work on the side and cutting down on expenses (most definitely vices like cigarette, alcohol and tong-its if you ask me). It will take discipline and commitment.
Our personal finance article today “What will it take to become a millionaire?” lists down seven rules that self-made millionaires live by. On their own, they may turn us into better persons although not necessarily millionaires. Together, they can bring us closer to that first million, and we all know the first million is the toughest.
- Treat money as something to save and invest. The minute you receive your paycheck or a windfall (example, an inheritance or a bonus), think of how much you can put away as savings.
- Assume some risk when investing. When you play safe in investing, you’ll get safe (but low) returns as well. Millionaires have gone out on a limb putting up businesses which they hoped would earn — nothing is guaranteed. But it is in taking calculated risks that they are rewarded.
- Live simply. Some millionaires have lived in the same homes they have had for the past 30-40 years. Or they live in the homes they inherited. You can also take a cue from the way millionaires live: not all party every night, nor do they buy every new car model that’s released. Instead, you’ll find these millionaires working at their desks at 8 a.m. and having just two cars in the garage.
- Have a goal. By being specific, you will be more motivated to reach your goal. For instance, make it your goal to have your own home by the time you are 35 or 40. It may be a studio condo unit or a three-bedroom home in a subdivision—it will depend on your income and how you save over the years. Having a goal will help you focus your efforts well.
- Choose good debt over bad debt. Take out a loan only when the loan proceeds will be used to earn you more money. For instance, apply for a bank loan to expand a business that’s feasible.
- Share your blessings. There seems to be a unique mathematical formula at work: The more you give, the more you are blessed back in return.
- Train children to handle money well.
Read more here.
There is nothing on the list that says it will be easy. But it has been done. There are more millionaires around us than we think, and interestingly enough they are the ones who have simple clothes, eat in simple places and drive cars that are not flashy.
May 21st, 2008 at 4:46 am
i have long given up on acquiring more material riches. Why? because i realized that there will always be someone higher or richer than me. So after aquiring our goals we long for something more to overtake somebody. An endless cycle of wanting something more. What i’m doing now is searching for my passion and taking it wiht me to the grave (until i die). This way my happiness is guaranteed till my death.
May 21st, 2008 at 3:50 am
yeah! so even you just sit and relax 24/7 you will be a millionaire if you are destined to become one.
May 20th, 2008 at 10:45 pm
each one of us is predestined to something. if you are meant to be then you are meant to be. one only have to cooperate to the leading of fate. but if you are not meant to be , no matter what you do , it is not gonna be. i believe rather than to seek material wealth , one should aspire intrinsic happiness instead for each one of us is predestined to real happiness. as each one of us is bound for GOD. what does it profits a man even if he gains the whole world.
May 20th, 2008 at 5:23 pm
Of course it’s possible for a minimum wage earner to become a millionaire. I started at 11 pesos per hr. 19 yrs. ago. Now I can’t believe I’m richer than Sen. Noynoy Aquino. He must be understating his SALN.