The 2 Ways to Become a Millionaire

Summary

• To become a millionaire, you can either earn your way there or own your way there.
• Earning your way means making $2 million before taxes to net $1 million, assuming you save all of it.
• Owning your way involves creating a business.
• If your business makes $250,000 a year and is automated, you might sell it for a 4 times multiple.
• Selling a business at a 4 times multiple for a $250,000 annual profit could result in reaching a $1 million net worth.
• A $250,000 profit is relatively small in the business world, but achieving this can still lead to millionaire status through a sale.

Video

How To Take Action

I would suggest starting by setting a clear financial goal. Aim to make your business generate a profit of $250,000 per year. To do this, focus on creating a product or service that solves a real problem for people. Then, make sure you offer excellent customer service so they keep coming back.

Next, work on automating your business. This means setting up systems so things run without you needing to be there all the time. You could use online tools to handle appointments or orders, or hire team members to take care of day-to-day operations.

Once your business is making money and runs on its own, you might think about selling it. If your business is automated and brings in profit, you could sell it for a lot more money than it makes in a year. A good rule of thumb is to aim for a 4 times multiple. So, if your business makes $250,000 in profit each year, you could sell it for around $1 million.

Remember, achieving this doesn't have to be expensive or take a lot of time. Start small, focus on what your customers really need, and keep your costs low. Every bit of profit gets you closer to your goal.

Lastly, be patient and keep saving money. The more you save, the closer you get to being a millionaire. Even if it takes time, taking these steps can lead to big rewards. Keep pushing, and one day you might sell your business and hit that million-dollar net worth.

Quotes by Alex Hormozi

"There's two ways that you can become a millionaire: you can earn your way there or you can own your way there"

– Alex Hormozi

"If I want to earn my way to a million dollar then I'm going to need to make $2 million over X period of time"

– Alex Hormozi

"Divide that by two because of taxes to get to my $1 million"

– Alex Hormozi

"That's assuming that you saved 100% of your income"

– Alex Hormozi

"On the other hand you can own your way"

– Alex Hormozi

Full Transcript

there's two ways that you can become a millionaire you can earn your way there or you can own your way there and that's what I'm going to walk you through so if I want to earn my way to a million dollar then I'm going to need to make $2 million over X period of time divide that by two because of taxes to get to my $1 million that's assuming that you saved 100% of your income on the other hand you can own your way let's say that I create a business that gets to $250,000 per year in some instances I might be able to sell this company if it was truly automated I could sell this probably a four times multiple it would be a very good multiple for a business that is doing that kind of profit because this is actually a small amount of profit for when we're talking business but that would get us to a $1 million net worth