Thread by @TihoBrkan

1/ In a survey conducted on 10,000 millionaires in the US, figures showed that only 21% inherited any money whatsoever. A much smaller number inherited almost all of their wealth.

This goes to show that the majority made their fortunes. If they can do it, so can you!

2/ So the next natural question is how does one go about becoming a millionaire?

There are 101 one ways to the skin a cat. However, there are only really two ways to do so if you take out the inheritance, crime or lottery wins.

3/ The first way is to either become a master of a particular skill or build a business that offers value & solves problems.

Having a special skillset means that you will most likely be compensated highly for it. As long as high-income earners learn to have a good...

4/ ... relationship with money & live below their means, their savings rates would ensure a pretty straight forward (and rather swift) pathway to millionaire status.

Building a business is probably even better, while most likely harder with a lower probability of success.

5/ As @naval said: "You must own equity — a piece of a business — to gain your financial freedom."

It makes sense right, and the thing with a successful business is that it might take you way beyond a millionaire status into much higher levels of wealth.

6/ The first way, via mastery of a craft or creation of a successful business, is a rather fast way to success — but with a lower probability of success.

So what is the higher probability of success? Investing for the long run. Sound financial practices, mixed with compounding..

7/ ...capital over years, if not decades, will produce the success of financial freedom you might desire — that 7-figure millionaire status so many are after.

Obviously, this is a much slower path to wealth and for most, it takes a fairly good chunk of their adult life.

8/ Everything else is basically in between those two. For the FinTwit community who focuses on finance and investing, it goes without saying that if you are a very good investor, who can compound money rather quickly, you might become a millionaire faster then most.

9/ However, to do so two things must occur. Firstly, unlike most people who are on here, you must be pragmatic. You cannot sit around reasoning with the market & arguing with others about what ought to happen, while you miss out on a 15% plus compounding returns in stocks.

10/ Secondly, life is short & you're only given a handful of investment cycles — if that. Therefore, when the probabilities are in your favor, you got to learn how to bet big.

Mind you, this isn't for most, but only for those who want to achieve the millionaire status faster.

11/ So in summary, unless you inherit money, you're a criminal or you win a lotto your pathway to a millionaire would be:

— highly paid in-demand skill
or
— build a successful business

and/or

— invest for the long run
— financial discipline & savings

12/ As a side point, it is also important to understand there is a difference between making a million dollars (revenue) & being a millionaire (net worth).

To become a millionaire in a country of decently high taxes, you got to make 2 million to have 1 remain in your pocket.