There are ambitious individuals all over the world working hard to achieve millionaire status. It is a status that most would agree epitomizes financial success. We’ve all heard countless success stories of people who have become millionaires, some even at a young age. We also know that many of these people started with nothing, which is likely where the term “self-made” comes from.
There are many paths a person can take to become a millionaire. Some have become millionaires by investing in real estate. Some have done it by building and selling a business. Some have done it by investing in other businesses. Some have done it by creating and selling digital products such as software, mobile apps or information products.
So we know that it’s possible, and we know that there are many ways that people have done it. But what we don’t often hear about are the specific skills that these self-made millionaires possess that are paramount to their ability to create substantial financial wealth, regardless of which path they take to create it.
After interviewing dozens of self-made millionaires, here are 6 specific skills that I’ve found to be common in all of them:
1. They know how to manage money
Self-made millionaires know how to manage money. They know how to use the money they make to make more money. They multiply their wealth by getting their money to work for them. Most people don’t know how to make money work for them, so they never stop working for money. Most people spend the majority of their income on personal expenses and whatever is left will typically sit in a low-interest savings account.
While most self-made millionaires began by working for money, they kept personal expenses low and put their remaining income to work. They didn’t let their money sit in any one place for very long. They put it work by using it to grow their business or purchase investments that would yield a return. By minimizing personal expenses consistently for several years while continuing to re-invest as much money as possible into income-generating activities, these individuals were able to compound their wealth in relatively short periods of time.
2. They know how to create win-win relationships
Self-made millionaires know how to build and cultivate win-win relationships. Believing that their network is equal to their net worth, they make a commitment to cultivating relationships with people who can help them achieve their goals, and in exchange they help those individuals achieve their goals. By continuously expanding their network, they can create opportunities by connecting the right people together. And as their network expands, the number and quality of the opportunities they are presented with also increases.
3. They can delay gratification
Self-made millionaires have the discipline to delay gratification. Most people are very impulsive and entertainment driven. They often spend money on unnecessary things that give them immediate pleasure but have no real long term benefits. Most self-made millionaires had little interest in short term pleasures as they built their wealth. They had the discipline to not waste money on unnecessary items or waste time on unnecessary activities. They made plenty of sacrifices that the average person doesn’t make, and as a result they are now able to enjoy life at a level that the average person can only dream of.
4. They know how to influence others
Self-made millionaires know how to influence and persuade others to help them do what they need to do. Even though the term “self-made” implies that no one else’s help was used, in reality we all require the help of others to achieve our goals. For example, a real estate investor will likely not build wealth in real estate without the help of real estate agents, appraisers, mortgage lenders, contractors, or tenants. A large goal often requires the involvement of several people. Self-made millionaires know this, and have therefore become skillful communicators. They are able to effectively persuade others to willingly contribute whatever services they can.
5. They are resourceful
Self-made millionaires seldom let a lack of resources stop them from achieving their goals. If they didn’t possess the resources they needed to seize an opportunity, they found someone who did and negotiated a win-win arrangement for both parties. If they needed money, they found where to get it. If they needed certain talents, they found the right people. Self-made millionaires know that a lack of resources is rarely the problem – a lack of resourcefulness is. When resources were scarce, they learned to be very efficient with what was available to them. Being efficient with a little was practice for being efficient with a lot.
6. They know when to delegate
Self-made millionaires are conscious of the value of their time. They deliberately spend the majority of their time on high-value activities (activities that yield the greatest return). For example, an entrepreneur whose goal is to earn $1,000,000 in a single year and is prepared to spend 2,000 hours on work-related activities, calculates that the value of one hour of his time is $500 ($1,000,000 divided by 2,000 hours). In order to achieve that goal, that entrepreneur must spend his time on activities that are worth $500 per hour to their business. All other activities need to be delegated. You can’t expect to earn $1,000,000 in a single year if you spend the majority of your time on activities that can be delegated to someone else for $20 per hour.
Self-made millionaires identify which of their daily activities are most productive in terms of growing their wealth. They focus as much time as possible on those activities and they delegate the other activities (paperwork, administration, running errands, etc.) to other people. They abide by the Pareto Principle – also called the 80/20 Rule – which states that 80% of results come from 20% of activities. Self-made millionaires invest their time in the right activities.