How to Become a Millionaire With Real Estate & Business | BiggerPockets (2024)

So you want to learn how to become a millionaire.

Great. Good for you! I want six-pack abs. And an Oreo cookie. Right now. But it’s not enough to want something—as Michael Jordan says, “Some want it to happen, some wish it would happen, others make it happen.”

Wanting is never enough. Especially when you want to know how to build wealth and become a millionaire. After all, that’s the epitome of the American Dream. “One million” is a solid, tangible number that most people believe will classify them as “rich.”

Yet so few ever reach millionaire status. In fact, of the seven billion people on earth, less than 20 million are millionaires. That’s far less than 1%. This is absurd given one simple truth: Becoming a millionaire is simple.

Becoming a millionaire is simple

Simple? Really? Yes! But not easy. Pay attention to the crucial difference between “simple” and “easy.”

• Running 50 miles is simple—but not easy.
• Staying up for 60 hours is simple—but not easy.
• Avoiding delicious chocolate cake is simple—but not easy.

Simple only means there are not a lot of steps. That’s why becoming a millionaire is simple, not easy.

• You don’t need an MBA.
• You don’t need to go to Harvard.
• You don’t need to come from a rich family.
• You don’t have to be exceptionally smart.
• You don’t have to know the right people.

So are you ready to build wealth?

Why am I qualified to teach you how to become a millionaire?

You might be wondering, “Why is this kid telling me how to become a millionaire? He looks like a bearded Justin Bieber.” Besides that awesome beard, why am I qualified to talk about this?

Because I did it.

I don’t talk about my net worth very often, but I crossed the $1,000,000 net worth level about the same time I turned 30 years old. And I didn’t start out with a rich family. I never went to an Ivy League school. I didn’t win the lottery.

I simply (and correctly) used a strategy I call “the wealth tripod.”

What is the wealth tripod?

Before we dive into the details of the wealth tripod, let’s discuss what’s stopping you from becoming a millionaire.

(“Duh, Brandon,” you’re probably saying. “My lack of money is stopping me!”)

False. Your lack of money has nothing to do with you becoming a millionaire. Yes, over the long run, if you never begin collecting money, you’ll never become a millionaire. But that’s not stopping you today.

Want to know what’s really stopping you?

It’s you.

In order to become a millionaire, you must change who you are. As Les Brown said, “To achieve something you have never achieved before, you must become someone you have never been.”

The wealth tripod outlines the three things about you that must change if you want to become a millionaire. Without all three, you’ll never become wealthy. All three steps are required to build and maintain wealth. Like a camera tripod: If one of the legs breaks, the entire tripod falls down.

So, what are the three legs?

• You must believe wealth is actually possible for you.
• You must learn how wealth is built.
• You must live out the steps needed to make it happen.

Believing that wealth is possible

I don’t believe every person should become a millionaire—after all, money often causes more problems than it fixes. But every person has the ability to become a millionaire. However, many people believe a current lack of wealth means an inability to create wealth.

This simple quote explains the fault in this thinking: Who you are today is the sum of all the choices you have made up until this moment.

Think about that for a second. Reread it a couple times. Everything you have, everything you believe, and everything you are is a result of your previous decisions and actions. For example: If you’re broke, it’s probably because you spent more money than you earned.

That might sound depressing but it’s actually some of the best news in the world. Although this principle reveals the source of all negative aspects of our life, it also reveals the possible positive changes in your life.

How do I start to believe in my ability to build wealth?

A total life transformation doesn’t happen overnight, but it will start to slowly take shape with each choice.

Think of a rocket blasting off into space. A course correction of a single degree can mean the difference between landing at the International Space Station and colliding with the sun. In the same way, a course correction in your life—starting today—can result in a massively different future.

Just because you aren’t a millionaire yet doesn’t not mean you can never become one. “Becoming a millionaire” is a learnable skill, just like getting a six-pack, beating Super Mario Bros, brewing a great cup of coffee, or driving from New York to Argentina.

Anyone can learn the skills necessary to become a millionaire. The problem is we aren’t taught how to become wealthy—because we live in a society run by people who do not know that building wealth is a skill.

In school we are taught:

• How to add and subtract
• How to color a picture
• How America was “discovered”
• How to figure out the square root of a number
• And a lot of other sometimes “useful” things

But what you were never taught was how to become a millionaire.

Most of us were never even taught how to balance a checkbook, how to avoid credit card debt, or how to live on less than we make! And frankly, it’s not the teachers’ fault. The responsibility lies solely on the student: If a person truly wants to become a millionaire, they can.

But they first need to believe.

Do you believe yet that wealth is possible for you?

I hope so. Because it completely and totally is. The only thing stopping you is you.

Except that’s only step one. It’s not enough to want wealth, or to believe wealth is attainable. If you believe in your heart that wealth is possible but don’t take the steps necessary to learn how to get there, you’ll remain broke forever.

Learn how wealth is built

Highly successful people often say, “The first million is the hardest.” But, like riding a bike, once you learn it, you can repeat the process over and over.

Wealth building is a process that can be studied, learned, and mastered.

Now, while I would love to share an easy, five-step process for building wealth, it’s not that easy. Why? Because there are a lot of ways to build wealth. Every millionaire has a different story. However, we can boil down all those avenues to make it easier to find your ideal path.

There are three primary ways to become a millionaire. Yes, there are millions of strategies, but only three buckets.

Those categories are:

• Personal finance
• Business
• Real estate

In order to build wealth, you’ll need to do one, two, or all three.

Live out the wealth-building steps

Let’s pretend for a moment you are baking a pie. You might have the confidence and belief that you can bake that pie. You might have the recipe. But let’s be honest: The pie is not going to bake itself.

You need to get in the kitchen and start cooking.

The same is true for becoming a millionaire. Believing you can build wealth and learning the steps to do so isn’t enough—you’ll still fail if you don’t take action.

Action is always be the final key to success. Without it, you have nothing. No one is going to give you one million dollars, no matter how smart, talented, or lucky you are. You have to get out there and work for it.

Specifically, this means taking daily action.

A lot of people believe that the secret to success is found in “big events,” but in reality, it’s found in daily tasks. Whether you choose the personal finance method, the business method, the real estate method, or all three, set aside time each and every day to work your system.

The personal finance method

When I say the phrase “personal finance,” what comes to mind? Paying your bills? Credit cards? Your credit score? Boring, right? But hang with me!

Personal finance is the first step to becoming a millionaire. It must be mastered if you plan on pursuing business or real estate. Without a firm grasp on your personal finance, you’ll shoot the cow before it begins producing milk.

Even if you manage to make one million dollars, you’ll never hang onto the money unless you understand personal finance.

Personal finance includes all of the following—and more:

• Living on less than you earn
• Having a budget—and sticking to that budget
• Saving money
• Investing money in passive investments like stocks, bonds, and mutual funds
• Using 401ks, IRAs, and other financial products intelligently
• Using credit wisely, if at all
• Maintaining a solid credit score
• Strategizing and planning your taxable income and deductions

Overwhelmed? Don’t worry: You don’t need to master every aspect right now. Personal finance is an ongoing pursuit where you can never fully know everything. I’m sure even Dave Ramsey learns new things every day.

Knowing vs. doing

“But Brandon,” you say, “I already know all about saving money.”

Good. I know all about getting that six-pack, but you don’t see me getting any more in shape. That’s because personal finance is not about knowing, it’s about doing.

We all know we should save money. We all know we should have a budget. We all know we should be improving our credit score. But how many people are really doing those things? Are you?

“I’ll save more when I make more” is the common excuse used by millions of people who suffer in debt. But the sad truth is, bad debt is just as prominent with the wealthy as with the poor. Today’s economy doesn’t have a debt problem—it has a greed problem.

Our culture says your smartphone is no longer good enough six months after you purchased it. That you must drive the best cars you can afford, live in the best house you can afford, stay in the best hotels you can afford, and live the best life you can afford.

Now, I’m not saying you cannot have nice things. This year my income went up, so I bought a bigger house. And I don’t regret that decision—because there is more to life than money. Mastering personal finance doesn’t mean saying “no” to everything; it means taking control of your money to put you—not your greed—at the wheel.

Saving your way to one million dollars

Yes, a person could save and passively invest themselves to one million dollars.

I know many people who lived frugally for years, saved their income, invested their money in passive investments, and found themselves with one million dollars in net worth. They never started a business, they never bought an apartment building, and they didn’t win or inherit their savings. They simply used a firm grasp on their personal finance to become a millionaire.

Dave Ramsey, the popular radio personality, is perhaps the most influential proponent of this wealth-building strategy. His “seven baby steps” have helped millions of people get rid of debt, live below their means, invest carefully, and reap the rewards later. But this approach isn’t for everyone.

I’m not going to make my own soap to save a buck. I’m not going to ride my bicycle everywhere I go so I don’t have to pay for car insurance. I’m not going to sew my own clothes, eat ramen noodles, or sacrifice my love of travel.

I live financially smart but not financially frugal. For some people, this approach works great. But if you’re not one of the lucky few, don’t feel bad.

The problem with using personal finance to become a millionaire

Relying on personal finance creates a solid foundation—but for me, it’s not the only strategy. Why? Because it takes a long time.

When I was 21 years old, I was making minimum wage at a job that I hated. Yes, I could have lived on rice and beans for years, saved $500 a month, and invested it in the stock market. Over time, I’m sure I would get raises and better jobs. But it still would take a long time.

There is nothing wrong with getting rich slowly. I still pay careful attention to my personal finances because they are my “insurance” against the other methods. But I don’t want to save for 40 years only to have a retirement I’m too old and tired to enjoy.

In the book The One Thing, authors Gary Keller and Jay Papasan tell the story of a couple who scraped and saved for years in preparation for a retirement full of travel and leisure. However, just before they retired, the wife received a dreadful cancer diagnosis. Before she could take a single trip, she was gone.

There are no guarantees when it comes to our future. I want to enjoy life now. I want to enjoy life in 20 years. I want to enjoy life when I’m 100. That’s why the other two wealth-building methods are so handy.

The business method

There are a lot of ways you could become a millionaire through business. I won’t waste a lot of time detailing every single method, but here’s a quick summary of a few of the most common methods.

• Buying and reselling wholesale products. Whether you create a brick-and-mortar store, an online e-commerce business, or simply sell a product on Amazon, buying products from a manufacturer or distributor and selling them to customers is one of the most tried-and-true business methods. Websites like Alibaba.com can help you source low-cost products from around the world at prices that would shock you.
• Creating and selling something new. Another way people make big money in business is creating new products. You can license other companies to produce your product or sell it yourself.
• Providing a service. You can build wealth by serving others and getting paid for that service—such as starting a coaching or handyman business. Consultants, restaurant owners, plumbers, and other similar vendors see a need and provide their own services in exchange for pay.

While these three are the most common business types, there are many other kinds. For example:

• Lending money
• Being an agent representing someone else in a transaction
• Offering an insurance product
• Royalties from music, books, or other created works

In addition, most businesses utilize more than one business model under their roof. For example, is a coffee shop a wholesale-retail business, a new-creation business, or a service business? From where I sit, it’s all three.

5 questions to ask yourself before starting a business

Here’s the bad news: There are a lot of broke business owners out there. Yes, for those who get it right, it’s life-changing. Business truly can make you a millionaire and help you work less and have more time to spend with your family. More time to enjoy your hobbies. More money to travel and more money to give to others.

But just having a business is not enough. You must make that business succeed—which can be tricky. So to talk about how that’s done, I want to ask you five questions.

• Is there a market for your business? I don’t care if you’re the best dog-walker in town. If your market—the people and businesses who might pay you money—doesn’t need dog-walkers, you’ll be quickly out of business.
• Is is scalable? Can your business function with or without you? Do you have to be involved in every aspect? Or are you simply building a job with an income cap? Yes, you might be able to make a living with a business that revolves only around you, but you’ll likely never scale to a level that will make you incredibly wealthy. Treat your business like a machine with replaceable parts, and make that machine run as smoothly as it can.
• Are you passionate about it? You won’t become a millionaire overnight. It can take years of hard work—and numerous setbacks and disappointments. If you are trying to build something you have no passion for just because you think it will make money, it will be hard to sustain the grind.
• Are you willing to pivot? It’s hard to predict exactly what customers want to buy—thus the need to pivot. For example, you might think selling yoga mats to high school kids is an incredible idea. But if auto mechanics seeking something soft to lay on are the only ones buying your mats, will you pivot to what the market actually demands? Too many business owners let their company slide into oblivion because they’re too attached to their original idea.
• Are you willing to continue learning? Business owners are often arrogant, insisting that “what got them here will get them there.” In other words, they refuse to learn and grow. This means competitors can pass them up and destroy them. So are you willing to accept the fact that you will never be able to stop learning, growing, testing, tweaking, and improving your business?

Even if you answered “yes” to all those questions, keep this important factoid in mind: Your ideas are worthless. (Sorry.) If it’s a good idea, most likely many other people had the exact same idea. So why do some people make millions of dollars on a business idea and you don’t?

Because implementation is all that matters. You could have the best idea in the world, but if you fail to implement it, you’ll likely fail entirely.

The real estate method

Real estate investing saved my life. Growing up, I had never considered anything other than the path chosen by most: go to college, get a good job, save up your money, retire when you are old.

Something inside me screamed in opposition, but I saw no other choice. Until real estate hit me like a ton of bricks. You see, I had purchased a cheap house while studying for law school, and one day it hit me: I could sell this house and make money.

So I did.

And it changed everything. At 27 years old, I had enough passive income that I could quit my job and live solely on the cash flow. I was “financially free.”

How can real estate make you a millionaire?

As I discussed in The Book on Rental Property Investing, there are four primary wealth generators at play when you invest in real estate.

• Cash flow. This is the extra monthly income you can keep. Cash flow can be deceptive: It fluctuates due to expensive repairs or an unoccupied unit, so it’s important to factor in non-monthly costs like vacancy rates, repairs, capital expenditures—or expensive projects like replacing appliances and roofs—along with the regular expenses, such as utilities and management.
• Appreciation. When the value of a property increases, it’s called “appreciation.” While appreciation is not always guaranteed (just ask people who bought in 2006 and sold in 2010), over time, historically, real estate has always increased in America. It averages 3% per year. You can also increase the value by physically improving the property.
• Loan paydown. When you buy a property with a mortgage, each month your loan balance decreases. This means your tenant is essentially paying the loan down for you—automatically building you wealth.
• Tax benefits. The U.S. government likes real estate investors and uses the tax system to encourage our purchase and leasing of properties. From extra tax write-offs to the 1031 exchange and more, real estate investors can pay significantly less tax than other business owners, using the extra cash to buy more properties or pay of the loan faster — helping to build greater wealth.

Of course, just buying real estate doesn’t mean you’ll have all of the above benefits. Different strategies give you different benefits. For example, when you fix and flip houses, you don’t have the loan pay down or cash flow benefits—but you do get forced appreciation.

It’s no secret that real estate investing is, by far, my favorite way to build wealth. In my opinion, nothing comes close in its ability to create wealth. Here’s just a quick list of some of the reasons real estate investing is so powerful for those looking to build wealth.

• Thousands of others have traveled down the real estate road and freely share their knowledge.
• Real estate is tangible—you can physically see it, touch it, inspect it, and live in it.
• People will always need housing.
• It’s simple to understand—you don’t need a PhD in Economics.
• There have been thousands of books written on the various real estate strategies.
• It is diverse—there are hundreds of ways to invest in real estate.
• It’s fun to see the transformation of a property from ugly duckling to beautiful swan.
• You directly are able to control the investment.
• Real estate allows you to invest using little to no money down.
• Real estate can give you fantastic returns on your money.
• Real estate is sexy—nearly everyone “wants to do that someday.”
• Real estate tends to climb higher in value over long periods of time.
• Real estate is a hedge against inflation—when inflation causes prices to increase, so will rent (but fixed-rate mortgages will stay the same).
• Real estate is a team sport—you don’t have to do everything yourself.

These are just a few of real estate’s benefits other wealth-building activities. That said, real estate investing is not for those just looking to make a quick buck. It takes time, persistence, knowledge, and sometimes a bit of luck.

But I firmly believe real estate can change your life just like it changed mine.

10 final tips

• Believe you can do it. Don’t let your limiting beliefs tell you that you are not smart or talented enough. If you want it, you can get it.
• Focus on the process. Wanting to become a millionaire is great—but you must focus on the process. What daily actions will you take? What path will you walk down?
• Track your progress. If you are not tracking your net worth and the processes you have in place for becoming a millionaire, how do you plan to get there?
• Live on less than you earn. I’m not suggesting you make your own soap and avoid showers, but focus on living responsibly. If you can’t live financially smart now, you’ll never be financially wealthy later.
• Make your money earn you money. You alone will likely never save up one million dollars. Therefore, the only way you will get there is by turning your money into little factory workers who show up each day and go out to make you more money. You can do this through business or investing—but make sure your money isn’t sitting around.
• Learn to manage processes and people. Systems and processes help you scale. If you don’t want to work in your 90s, learn to create and manage systems, as well as the people you put in charge of those systems.
• Live proactively, not reactively. You have two choices in life: React to life as it is thrown at you, or create your own life—one that you define and you work for.
• Do only vital tasks. Focus on the few tasks that you do best, and either avoid the rest or leave them to other people. Bill Gates, Oprah Winfrey, and you have the same number of hours in a day, yet you make drastically different impacts and incomes. It’s how you use the hours given that makes the difference.
• Success leaves clues. Don’t reinvent the wheel. Examine how others found success. Once you understand their strategy, you’ll much more easily find your own.
• Level up your network. You are who you associate with. If there are four broke people in the room, chances are you’ll be the fifth. If there are four millionaires in the room, chances are you’ll be the fifth. So pay close attention to who you associate with because that’s who you’ll become.

Becoming a millionaire won’t make you happy. It will not make you a better spouse or a better parent. It won’t fix your low self esteem. It won’t cure your illness, your weight problem, or your depression. Money is not the answer to all of life’s questions—and can even cause more problems than it fixes.

Money can, however, help you feed your family—and other families. It can help you spend more time with your family. It can help you give to your religious organization, to your political party, or to your favorite charities.

Money is not everything. Becoming a millionaire is a fun goal—but, at least for me, it’s the journey that is the real prize. It’s making a plan and seeing your plan come to fruition. It’s knowing that, “I did it.”

So do you truly want to become a millionaire?

Then it’s time to go out and get it.