Do you remember Baby Steps for Future Millionaires (Part 1)?
Well, here are 10 more baby steps for you on the path to becoming a millionaire…
Remember: a journey of a thousand miles starts with a first step. Re-programming our habits eventually creates incredible results. The magic is in the aggregation of marginal gains.
1. Imagine you are rich
OK, imagine you are rich. You have no debts, no money worries, good health, a beautiful spouse etc etc. You are sitting in a garden on a summer day with a cold beer or glass of wine. The sun is shining, the birds are tweeting and everything is marvelous.
To achieve this actually doesn’t take much money at all. So now I want you to think bigger and imagine what you could do if you were really rich. Be as specific as possible…what would you do and how would it feel?
Congratulations! You have just completed a visualisation exercise. Visualisation is a powerful technique used by top performers from sportsman to chief executives. Top athletes use visualisation to prepare for the feeling of lining up on the start line, hearing the gun, starting to sprint and then powering across the line first.
The Escape Artist is already past the point where I’m probably not going to starve. But I can visualise the benefits of having a lot more money. If I had $quillions, I could use this to buy rainforest to protect it from logging or green belt land to protect it from development or give it to projects that promoted family planning or child literacy in the third world.
Money is power and power can be used for good.
2. Skip a meal
Back in 2014, I wrote Get Rich…Fast about the benefits of occasional fasting. I recently did another full days fast and it was much easier this time. I didn’t even notice I was hungry until about 5pm and by that time the finish line was in sight. I went to bed early and burnt fat the easy way…whilst sleeping.
The stoics of ancient Greece and Rome deliberately created the experience of poverty by occasionally sleeping on the floor or skipping the odd meal. Seneca then used to ask himself: Was this the condition that I so feared?
In other words, is that it?? We may fear poverty, but for most of us in the pampered West it’s healthy to skip the odd meal. Experiencing this helps take the sting out of our fears. And what doesn’t kill you makes you stronger.
Food tastes better when you are genuinely hungry. It’s not about deprivation so enjoy a slap-up meal after your fast.
3. Imagine you got fired
If you are in full time employment, run the following thought experiment. Imagine that your boss calls you into their office. The lady from HR is there looking awkward, but this time it’s nothing to do with that unfortunate incident with the photocopier at the Christmas Party last year. You are being fired.
Now what would you do? Who would you call and go and see? Make a list and then call them now whilst you still have your job.
Dig a well before you are thirsty and build the connections that will help sustain you in the future…maybe years from now. Reaching out and building relationships for the long term is valuable…even where there is no obvious immediate payback.
No one at work will suggest you do this. The Man likes you being dependent on your current job. It suits a drug dealer for the clients to be hooked. This is another reason they try to keep you busy in the Prison Camp.
4. Read a book
Reading the right books is like having a super-power. There is no investment that can you give a return like you get from a great book.
Here’s the deal : someone spends years working hard, experimenting and learning tough lessons to achieve mastery of their subject and demonstrate a track record of success. They then spend another couple of years locked in a room writing, boiling down all that experience into a book.
We can then read their book in a couple of days…benefiting from all their hard work and their entire life experience….all for less than the cost of a novelty iphone cover.
Now you might be thinking that you don’t need to read any self help books because there is nothing wrong with you. But there doesn’t need to be anything “wrong” to want to get better.
And don’t worry, you are among friends. The Escape Artist is not going to report you to the Self Improvement Police and have you sent to a compulsory Feng Shui workshop if you admit there might be room for improvement.
Now if only someone had compiled a helpful list of some life changing books to help you achieve financial freedom…hold on, what’s this?
5. Get a raise
First make sure you know what other people at your work get paid. What’s the purpose of after work drinks other than to swap intel on who gets paid what?
Then make an appointment to see your boss. Ask them what it is going to take for you to get a pay rise / promoted to the next level.
If it sounds even vaguely possible, throw yourself at the task. If it’s impossible, see point 3 above.
Then go back a few months later and ask for the promotion. Even if you missed the targets. If you do this with another job offer in your back pocket (see point 3 above), it will be a slam dunk. Even without an alternative offer, what have you got to lose?
I know…Duh! But what % of people do this?
6. Pay yourself first
Try throwing a juicy steak to a dog and asking it to save 10% for a rainy day. Let me know how you get on with that.
The same thing applies to people. If you wait until the end of the month and try to save whatever is left over, guess how much that will be?
A better approach is to pay yourself first. Set up a direct debit so your savings leave your bank account immediately after you get paid. Just like work tasks often expand to fill the time available, so spending often increases to use the cash available. So make less available for ridiculous spending. You can set up your monthly saving to be invested into shares / index trackers automatically so your money gets to work immediately.
Then print a list of all subscriptions, direct debits and standing orders that come out of your bank account. If you don’t recognise or need any, cancel them. And fire any financial adviser where you don’t know how much you are paying them.
The aim is to automate things so that money flows into your life easily yet takes more effort to leave.
7. Trade in your SUV
I think of cars as Money Incineration Units. The bigger the car, the more money it can burn.
OK, I know some people like the elevated driving position of SUVs, the space in the boot for champagne and the ability to withstand a Rocket Propelled Grenade attack.
But let’s be honest, most of us don’t really need a 4×4 for the school run. Can someone please tell The People of Surrey this?
It’s not necessary to buy an SUV. Similar handling can be achieved in a normal car by draining the brake fluid, letting half the air out of the tyres and filling the boot with bricks. Oh and then sitting on a baby booster cushion.
The Escape Artist does not believe in banning things. But perhaps every SUV could have a large sticker on it saying something like:
Money is for burning!
Does not contain a Hard Pressed Working Family.
….just a thought.
8. Invest in yourself
The problem with a lot of conventional education is that you end up rote learning boring stuff to parrot it back, pass a test and get a certificate.
The best education involves learning how to solve real world problems. I wish someone had taught me, aged 13 or 14, the power of compounding using the example of Kate.
Education shouldn’t finish when you get out of college. The best education is self-directed and provides a huge return on investment. As we discussed last week, Warren Buffett invested in Dale Carnegie’s class on How to Win Friends and Influence People. Which doesn’t seem to have done him any harm moneywise.
But where can we go now to learn the important things that schools and universities can’t teach us? Things like how to find a job you love, how to think like an entrepreneur and how to get better with money?
One suggestion is to check out The School of Life. TSOL started in London but now has schools all over the world. It was founded by Alain de Botton, author of Status Anxiety. I’ve been to a couple of the classes and I think they’re fantastic.
9. Eat a real breakfast
The Official Breakfast of The Prison Camp is branded cereal served with milk and sugar.
Breakfast cereal represents the triumph of consumerism over real food. If you are a running a large multinational food company, selling cereal is a fantastic money spinner. It’s cheap to produce, there are huge economies of scale and its habit forming for the customers.
Breakfast cereal is processed carbohydrate, which your body quickly breaks down into simple sugars. A bowl of breakfast cereal is a bowl of sugar in 2 hours time. Sugar makes you fat.
Note the huge marketing input behind the product…from TV advertising to free plastic toys to packaging saying things like NOW WITH ADDED URANIUM!
In The 4 Hour Body, Tim Ferriss recommends scrambled eggs and spinach as his goto breakfast for fat loss and muscle gain. As this fits with my own thoughts on diet, The Escape Artist has shamelessly stolen this idea. Tim who?
Why not see if it works for you. What’s the worst that could happen?
10. Rent a room
The number one cost for most people is living accommodation. An alien from another planet would wonder why we borrow vast amounts of money to pay bankers and estate agent’s bonuses whilst enslaving ourselves for life with mortgages.
At the same time, people living alone make up ~33% of UK households. Many people are rattling around in houses or large flats with spare rooms. And often these those same people don’t have enough money in their pensions.
What if more of those people wanting extra income in retirement let a spare room to some of those people looking for affordable housing?
It’s not just retirees though. Younger people with a house who want to pay off the mortgage and get to financial freedom quicker can also let out the spare room.
From April, you can earn £7,500 a year tax free in the UK by renting a room out and its never been easier, thanks to sites like spareroom.co.uk.
Cereal image credit: Evan Amos
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