Money plays an important role in life. Not being under pressure financially, but being secure, allows you to live your life your way. You are not dependent on what your boss tells you, but your own boss.
Often the magic limit with the Million described. A millionaire is generally considered "rich" and has a fortune which in itself provides a good income. Well invested, a million invested can generate a return of about 5 percent a year. The 50.000 Euro should be enough for your livelihood, so that you are no longer dependent on your job.
In Germany, there are about 1.3 million people who are considered millionaires. Worldwide, the number rises to more than 18 million people. As desirable as this goal is, it should keep you in mind that it is not impossible to earn the million.
But at what point can you really call yourself a millionaire, and which assets are added?
Definition of the millionaire concept
First of all Uniform currency be created as a basis. The differences between the euro and the U.S. dollar hardly matter. But if you look at a currency like the Indonesian Rupiah or Vietnamese Dong, you will quickly become a millionaire there. With the current exchange rates, about 65 euros would be enough to be considered a millionaire in Indonesia. This consideration is not very purposeful.
Therefore, as a basis in the common definitions of the US dollar used. This is the case in most rankings, if for example the number of millionaires or billionaires is recorded.
With the basis of the US dollar it is necessary to keep an eye on the exchange rate. At present, the US dollar is somewhat weaker than the euro. With a Assets of approx. 925.000 euros you could therefore already call yourself a millionaire.
To the fortune is usually invested financial capital counted. These include u.a. the following assets:
- Bank deposits
- Commodities
- Shares
- Real estate
If these assets together exceed the value of one million US dollars, you are a millionaire. So it is not mandatory to have a million US dollars in the account. This would also only make sense in the fewest cases. For even multi-millionaires or billionaires will only become an small portion of the fortune liquid on the account leave. Most of it is invested so that the assets continue to grow thanks to the return on investment.
On the other hand, the self-occupied real estate is not included in the calculation. This is not seen as an asset, but serves the daily use. You could also sell the property, but then you would have to look for another residential property.
A millionaire is someone who has assets of at least 1 million US dollars
A clear distinction is also made between income millionaires and millionaires to make. So far, only the assets have been considered when it comes to the millionaire question. Having a fortune of one million US dollars is already a big challenge. But how many people can also call themselves income millionaires?
Here the group of people is clearly delimited. In Germany, the Number of income millionaires, i.e. the people who earned more than a million a year, only about 19.000. So it will be much easier for you to join the circle of wealth millionaires than to have a corresponding income as well.
Self-Made Millionaire
Owning a million US dollars is a great achievement. But to be delimited, this must be done by Self-Made Millionaires. Because it makes quite a difference whether the Wealth itself earned or came about as a result of an inheritance.
This is why the term "self-made millionaire" is often used. This is used to describe people who themselves are millionaires came from average backgrounds and did not become rich via a significant financial injection from their parents.
If you yourself are pursuing the goal of building up a business with relatively small means, you could use such Success stories take as motivation to help. By the way, the percentage of self-made millionaires is much higher than the percentage of people who got their fortune by inheritance or by playing the lottery. Even to the billion you can bring it by own achievement.
To the list of self-made billionaires belong for example Jeff Bezos, Bill Gates, Warren Buffet or Mark Zuckerberg. Even if the conditions are not always the same, these people have managed to make it from a relatively small capital investment to earn a high fortune.
Ways to the first million
How can you achieve a fortune of one million and which ways are realistic?
The probably "simplest" and most common way to achieve the million consists in the basis of a good Education. By completing a course of study, which offers high salaries in professional life, the path to becoming a millionaire is within reach. Lucrative professions for example:
- Doctors
- Lawyers
- Engineers
- Computer scientist
You should note, however, that the profession alone does not ensure that you build up these assets. In every area, you should try to exploit your maximum potential and outstanding achievements to deliver. Otherwise, even among lawyers there are some examples who have a relatively low salary.
Away from these professional fields you could also have a good sales talent have. Are you a true communication genius and can convince people of your idea or your. If you convince your customers of your product, you will profit from your commissions. However, major fluctuations in income are possible here and every effort is required to be considered a Seller to become a millionaire.
Another alternative could be Self-employment come into question for you. This path is clearly risky. You do not have a fixed income and will spend some time to generate income at all. With a good business idea and a bit of luck, there is no limit to what you can achieve. The advantage of self-employment is that you can reinvest the income very profitably in the company. Thus, the first million quickly becomes the second, third or tenth.
Investments
Investing in real estate is lucrative, but it also involves risk and effort
away from the earned income, respectively. of your own company, you should increase your assets as much as possible invest profitably. Then by all means Yields of up to 7 percent a year to expect.
A relatively safe form of investment offer for this Index funds. These represent a large economic area and are therefore broadly positioned. The risk is spread over a large number of companies and if one area weakens, it is compensated by another one. When investing in ETFs or shares, you should be aware that there can always be phases in which setbacks are possible. The financial crisis of 2008 was not least an example of the decline but also the recovery of the markets. Are you patiently and want to invest your assets for a longer time, such funds are a good decision.
In addition to investing in index funds could also Investment in real estate will be interesting for you. The real estate market has exploded in Germany in recent years. With the appropriate investment you could profit from this development and build up your assets further.
The However, investing in real estate is significantly more time-consuming, than investing in passive index funds. You should read up on this matter and build up expertise. A stable income is also important, so that you can cope with rent losses or unforeseen expenses. If you have found a suitable property and have the necessary equity, the real estate could be a worthwhile investment to reach the first million.
Measuring wealth
When you buy the property, you may already realize that when you call yourself a millionaire, the only thing you need to know is that you are a millionaire Net worth makes sense. In addition to your own capital, you will also have to borrow from the bank in order to purchase the property. Thanks to the financial injection of the bank you will not become a millionaire overnight. Because in the consideration will always be the assets compared to liabilities. If you own a property that is worth more than one million US dollars, but this is largely financed by a loan, you will still not be a millionaire.
The same will be the case as an entrepreneur. If the company has a balance sheet asset of 2 million euros, but only owns Equity in the amount of 500.000 euros, you are strictly speaking not yet a millionaire.
With the question, from when one is millionaire, thus always the Assets minus debts drawn on. Only if this value exceeds the million, you can call yourself a millionaire.