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A millionaire is not someone who earns a million shillings every month.


Date Posted: 11/12/2012 12:48:08 AM

Posted By: fly1234  Membership Level: Bronze  Total Points: 15

Every person wants to become a millionaire some day. But if you ask them to define the term Millionaire, they will tell you- someone who earns a salary of a million is called a millionaire. I was told that this is what the society believes, a common perception widely held. The right answer is, a millionaire is actually someone whose net worth is in millions.

This means that even if all your loans were deducted from your earnings, you would still remain with a million figure in your bank account. For instance, if I earn a million shillings per month for the next 5 months, and a took a loan of 5 million to be repaid in the next 5 months, will i still remain with a penny in my bank account after paying all my debt? Certainly not. If fact even the interest charged on this loan would leave my account with a negative figure.

Do I qualify to be a millionaire at this point? Certainly not. A story is told of a bank cleaner who earned a salary of Ksh20,000. He would save Ksh5,000 out of his small salary every month. However, his supervisor who earned a million shillings per month would write hefty cheques every time he earned salary and would go broke even before the month ended. So his supervisor would come lending from him, sometimes Ksh5,000, sometimes Ksh8,000. At the end of the day, the cleaner was richer than his supervisor who earned millions.

The ability for one to become rich depends on how they use their monies. One of the characteristics of rich people is that they tend to invest rather than to spend. They always keep this as a rule of the thumb-to have money work for them rather than to work for money.

In their early stages, they sacrifice a lot by reinvesting so that they can reap fruits when their monies start crunching up more money for them.

About 50% of people who wear designer clothes are not millionaires. These are simply people who want to look like they have money. So they often end up with little or no investments at all because of the expensive lifestyle they lead. They try to maintain their public image at the expense of their investments.

T. Harv Eker, a millionaire and author of Secrets of the Millionaire Mind said the first thing he did was to commit to his success and playing to win. He swore that he wouldn't even consider leaving the business until he became a millionaire. From his statement, I perceived that millionaires are focused people, a trait that ‘wannabes’ won’t possess.

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