5 Wealth Lessons From 20 Percent of a Millionaire

In early 2006 I got serious about the goal of becoming a millionaire, and in this article I’ll share with you five key lessons I learned that may help you increase your financial abundance.

While I’ve long dreamed of becoming a millionaire (who hasn’t?), it was only last year that I began taking it seriously. What motivated me wasn’t the thought of buying lots of stuff or quitting my job (what job?!?) and retiring. Instead I got inspired by the idea that if I could figure out how to earn a million dollars, I could share what I learned and hopefully help a great number of people.

After a solid year of working at it, it’s a bit unclear whether or not I’m a millionaire yet. If I add up my cash, cash equivalents, and tangible assets, my net worth is roughly $200K, so I’m at least 20% of the way there. However, Erin and I own several online assets that are likely worth much more than that. It’s entirely possible that StevePavlina.com could receive a paper valuation of over $1 million due to its income (about $40K/month), its continued growth potential, and its extremely low operating costs. One blog valuation tool estimates this site as being worth over $1.6 million. I have no intention of selling this business though, so I don’t see that figure as particularly meaningful. Consequently, I’ll stick with the 20% of a millionaire tag for now.

I suggest we leave the labeling issues to those who enjoy obsessing over such matters, and I’ll proceed to share the wealth-building lessons I’ve found most valuable. Then you can make up your own mind about how helpful they are to you:

1. It’s damned hard to earn a million dollars from scratch.

This is just common sense, but I have to say it to counter the scammers who preach that you can earn a million dollars via their fast, easy, foolproof methods for only 3 easy payments of $19.95.

Perhaps you can earn a million dollars by using emotional manipulation to sell people useless, overpriced information products, but assuming you’re not a scam artist, you’re going to have to earn the money by providing a million dollars worth of real value. For most people, including me, that’s a huge challenge.

Respecting the magnitude of this challenge actually helps though. If you take this goal seriously, you’ll realize you must make a massive commitment to have a real chance of getting there.

People who say they want to become a millionaire but are unwilling to back it up with hard work are only fooling themselves. It’s not going to happen by itself. If hard work is a dirty word to you, don’t bother.

However, the great thing about this goal is that it’s achievable. People in far worse positions than you have already done it. It’s hard but definitely not impossible. If you accept this, it becomes something of a game. You don’t have to fear failure because you’re expected to fail, and that makes success all the more exciting.

2. Self-interest is insufficient motivation.

Given the magnitude of this challenge, tremendous motivation is required to lay in the course and persevere through the inevitable obstacles.

I found that wanting to become a millionaire for the benefit of myself or my family just didn’t cut it. I just don’t need more money or stuff badly enough to justify the effort. On a scale of 1-10, my level of materialism is about a 3. Even my friends could agree on that during a recent game of Therapy. Give me a fast PC and a high-speed Internet connection, and I’m good to go. I’m sure some people can get excited about earning a million dollars for all the cool stuff they can buy… or maybe for the status and recognition, but those aspects don’t do it for me. I’d rather play disc golf.

Unfortunately, this goal requires a lot more than mediocre motivation. You need to be seriously driven. Anyone who tells you otherwise is probably about to pitch you on 3 easy payments of $19.95. But where is that drive going to come from?

After some serious soul searching, I gave up on the idea of becoming a millionaire for myself. I just didn’t want it badly enough. If I did I’d have done it years ago with my computer games business, which I believe was entirely capable of getting there. I felt like a dolt for dropping this goal, but I also felt a sense of relief about the whole thing. It freed me up to focus on more important priorities like service and contribution.

Ironically it was the decision to put contribution ahead of wealth that led me full circle. Eventually I realized that becoming a millionaire could dramatically enhance my ability to help others.

By sharing what I’m learning along the way (as I’m doing right now), I can potentially inspire others to generate income by providing value instead of thinking they need to scam or trick people to get ahead. If even a small fraction of this website’s 1.5 million monthly visitors increase the value they provide to others as a result of the info I share, something truly wonderful will have occurred.

I also started thinking about what I could do with a million dollars. One idea I find very inspiring is to found a non-profit personal development organization, which would ultimately have thousands of individual groups all around the world. In structure I imagine it being similar to Toastmasters International, which has 200,000 members and 10,000 clubs worldwide. You could find a local group near you filled with people dedicated to helping and supporting each other grow, very similar to a mastermind group.

Considering the contribution aspects helped shift the millionaire goal from my head to my heart. I finally got enough leverage on myself to seriously commit to it. I realized this goal was potentially something much bigger than just me and my family, and taken in that light, I felt like I’d have to be a real schlub not to give it my all.

Even though it seems like earning a million dollars is a totally selfish goal, I’ve found that it’s just the opposite. Contribution is a far more powerful motivator than enlightened self-interest.

3. Focus on providing value to others, and the money will follow.

I figured that earning a million dollars should be pretty easy if I could determine how to provide at least a million dollars worth of value to others. Unfortunately I don’t know how to provide a million dollars in value to a single person (and get paid for it), so I figured I’d have to make it up in volume… maybe by providing $1 of value to a million people. I know I can create something that’s worth at least $1 to someone — one good article should do it — so the key is figuring out how to get that value into the hands of as many people as possible.

I think the best way to provide $1 of value (or thereabouts) to as many people as possible is to give it away for free. Who isn’t going to accept a free dollar? While you’d go bankrupt doing this with a tangible product, this can be done sanely with digital content. And thanks to the Internet, it’s possible to reach a large audience at extremely low cost. As for the details of how to create valuable online content, check out How to Build a High Traffic Web Site.

Once you can generate value and get it into people’s hands, the income part is relatively easy by comparison. It’s not automatic, mind you. You still have to set up systems to do it right, but that can be achieved via trial and error if necessary.

Consider this analogy: Suppose you own an empty warehouse, and you have thousands of people passing through it each day. Could you generate some income from those visits? Of course you could. You could sell lemonade, sell sponsored billboard ads on the walls, sell car insurance, solicit donations, etc. Some methods will bomb, but some will prove very effective. Given enough trial and error, testing, and refinement, you’ll eventually establish a reasonable income stream. Generating that foot traffic is the hard part, but in the online world it’s a lot easier because you can offer something valuable for free that doesn’t cost you anything to give away. OK, it does cost you a little because you have to pay for web hosting and bandwidth, but for me that expense is about 1/100 of a cent per monthly visitor. Going back to the empty warehouse analogy, you could do just about anything and earn more than a penny for every 100 visitors.

This site only earns about 3 cents per visitor per month on average, so I can say without conceit that it’s giving a lot more than it receives. I have to believe the 500+ articles here are worth more than 3 cents to virtually anyone who can read. Have you gotten your 3 cents worth from this site yet? What do you estimate it’s actually worth to you?

The upside is that this value imbalance generates massive referrals. It’s the main reason this site has blown past the web traffic levels of every famous pro speaker or author in the field of personal development, even though I’ve never spent a dime on marketing. While others firewall their value behind those 3 easy payments, this site’s content is free. It’s hard to compete with free.

To generate a million dollars in this situation, I can either find a way to provide even more value, or I can get better at monetizing the existing value. My plan is to actually do a little of both by making some changes to the business model this year. Rest assured the articles will remain free. Check back at the end of 2007, and we’ll see how well it worked.

I’m sharing this info with you, so you can understand the underlying strategy of generating income by providing genuine value. Forget about trying to get a million dollars, and focus your energies on providing a million dollars worth of value. If you can do that, the money will come.

For more on generating income by providing value, read Making Money Consciously.

4. Becoming a millionaire requires a significant identity shift.

If you haven’t listened to Podcast #18 – Faster Goal Achievement (18 minutes), you’ll probably find it very helpful. The podcast is about how achieving a big goal requires an identity shift to get there. To become a millionaire, you must become comfortable thinking and acting like a millionaire. If you can’t get there in your mind first, you won’t get there in your reality.

As I explained in the podcast, I realized that if I became a millionaire, I’d have to be comfortable managing larger sums of money. At the time I started on this path, $10,000 was a lot of money to me. But to a millionaire, it’s a relatively puny sum, only 1% or less of their net worth. So I began imagining that $10,000 was just a small amount of money and thinking about what that would feel like. Eventually I began to really believe it.

Secondly, I realized that if I were a millionaire, I’d carry more cash in my wallet. At the time I was comfortable having $50-70 in my wallet. $100 felt like a lot. So I went to the ATM and took out $200 and put it in my wallet. It felt uncomfortable to carry that much cash, but I got used to it after a few weeks. Over time I gradually raised my baseline until it felt normal having $300-500 in my wallet. Now when I have only $200 in my wallet, I sense a desire to go to the ATM.

Thirdly, I realized that to a millionaire, any sum below $100 or so is essentially irrelevant. If you’re already a millionaire, a few dollars here and there just don’t matter. Worrying about those kinds of sums is like fussing over pennies. I started telling myself that there’s no financial difference whatsoever between a $20 dinner and a $50 dinner. Going to a $9 movie is nearly identical to seeing a $90 show on the Las Vegas Strip. Those amounts are just pennies anyway.

As I gradually integrated these internal shifts, my income began to soar. Over a period of 12 months, StevePavlina.com’s monthly revenue went from $2K to $40K. As I made small changes to pretend like I was already a millionaire (in a safe and low-risk manner), I began attracting opportunities to earn more money.

Let’s be clear that I didn’t suddenly adopt foolhardy spending habits, even on low amounts, because a millionaire wouldn’t spend money foolishly. I kept my expenses reasonable, but I learned to stop fussing over amounts that really didn’t matter, like whether or not I should order a drink (non-alcoholic of course) with dinner. I’m never going to miss the $2 whether I become a millionaire or not.

Today any expense below $100 is effectively meaningless to me. $100 isn’t even 10% of a day’s earnings. This makes many purchasing decisions easier, since if the price difference between two items is less than $100 (such as the difference between two iPod models), I don’t even worry about it — I just buy the better model. The price difference is only pennies anyway.

It’s fascinating to me that I adopted this mindset first, and then the income manifested to fit the mindset. I suppose the next step is to start thinking of even larger sums as essentially irrelevant. It might seem counterintuitive that this method works, but it just does. If you want to be wealthier, start thinking like you’re already there.

5. Financial trolls must be shown no mercy.

In the terminology of online forums, a troll is someone who “intentionally tries to cause disruption, often in the form of posting messages that are inflammatory, insulting, or off-topic, with the intent of provoking a reaction from others.” (source: Wikipedia)

After launching the forums on this site over two months ago, the moderators and I gradually developed our troll-squashing shoes. At first we opted to be fairly lenient, giving polite warnings and reminding trolls to follow the posted etiquette guidelines. That never worked. All it did was embolden the trolls to keep on trolling. Every troll ended up getting himself banned eventually, but only after wasting a lot of people’s time. Eventually we learned the best approach was to banish trolls immediately on sight. It seems obvious in retrospect, since the kind of person who’d resort to trolling in the first place isn’t someone who’d genuinely care about personal development, but it was an important lesson nonetheless.

A financial troll is a close cousin to the forum troll, except that financial trolls strive to sabotage your financial pursuits. These trolls can be internal or external. They’re the people who make comments like, “Wealthy people are so greedy. They only care about themselves and will take advantage of anyone to make money.” Financial trolls are also the internal voices that say, “If you make too much money, people will judge you harshly for it. They’ll assume that’s all you care about.”

It’s tempting to listen to financial trolls because their statements are crafted to bait you into pointless arguments. Whenever you take the bait, you lose no matter what because trolls don’t care about arguing logically. If you agree with a troll, you lose. If you disagree with a troll, you lose. You’ll never convince a troll of anything no matter how hard you try. A troll’s agenda is to boost his own ego by making you wrong and by wasting your time. The more time you invest in dealing with the troll, the more you lose.

The only effective way to deal with trolls is to delete them from your life, no questions asked. Just nuke the sucker and move on. With face-to-face trolls, simply leave the room. If you really need a parting shot, consider the way Debra on Everybody Loves Raymond glares at Ray and then delivers the line, “Idiot!” If that isn’t your style, a simple eye roll works pretty well too.

Every once in a while someone sends me an email like, “Oh come now. It’s obvious you’re just in this for the money. Don’t even pretend you care about helping others. That’s just a load of self-serving B.S. You’re such a phony.” My external response is to simply hit the delete key. But my internal response is to recall a line from the movie Ruthless People: “This could very well be the stupidest person on the face of the earth.”

There’s a huge difference between constructive criticism and trolling. The former can be genuinely helpful. The latter never is. By all means listen to constructive criticism, but when you know the other person doesn’t actually have your best interest at heart, hang up on them and get back to work.

Show no mercy to financial trolls, whether they be internal or external. Once you recognize you’ve got a troll on your hands, hit the delete key and be done with it. Invest your time in making a contribution instead of becoming mired in a troll’s trap. When it comes to dealing with trolls, even when you think you’ve won, you’ve lost.

There are more lessons than these, which I’ll probably share in a future article, but the five above should get you off to a good start in generating greater financial abundance. For the most part these items are common sense, but in practice they’re fairly uncommon.

How often do you ignore your common sense and succumb to traps like wishful thinking, with its promise of fast and easy results; trolling, with its lure of intelligent debate; and penny pinching, with its prideful certainty that saving five dollars is better than earning five hundred? If the financial advice you’ve been getting hasn’t proven itself effective, then toss it out and rebuild your financial beliefs from ground zero. If you want to become a millionaire in 10 years or less, you can’t subscribe to the 40-year skimp-and-save approach. Sure you can save your way to a million in 40 years, but you can earn your way there a lot faster.