Happy “Be A Millionaire Day”! Have you thought about how you could become a millionaire?

Have you thought about how you could become a millionaire?  Not just day-dreaming but actually planned it out?  There’s a day that encourages investors to do that and plan to reach their goal.  Here, we look at two very real ways you can join the millionaire’s club.

 

On May 20th, it’s national “Be a Millionaire Day”.  This isn’t a day for the millionaires to pat themselves on the back.  Rather, it’s aimed at encouraging aspiring millionaires to set aside some time to visualise the route to reaching that goal and reflecting on the different ways you can make it happen. 

 

There are some common attributes millionaires share. One is that they read.  A lot.

 

Warren Buffett calculated that he spends 80% of his time reading.  This is a critical part of their success.  As Warren Buffett’s business partner Charlie Munger said:

 

 

At a very basic level "Be A Millionaire Day" is a chance to reflect and improve your approach.  It encourages people to plan.  This includes simple things like:

 

These are all vital components of a successful saving and investing strategy (and a more comfortable life) but they are just that: components.  On their own they probably won’t make you a millionaire; they need to be combined to create a well-designed, robust strategy that is thoroughly planned out, thought through and applied with discipline.

 

And don’t forget that any strategy will change with time as your circumstances change, so a regular review is a critical part of the process.

 

 

If you have a process for investing backed up by research and follow it with discipline (and you have an ISA account or SIPP/pension plan that you regularly contribute to) then you may be a lot closer to millionaire status than you think! 

 

As a simple example, if you haven’t started investing yet but do intend to invest £20,000 each tax year into an ISA, using Dynamic Fund Ratings we reckon that you could be an ISA millionaire in just 14 years (more on that here).

 

This assumes that you have a solid investment process – such as Dynamic Fund Ratings – in place that enables you to select outstanding funds.  A good process also means you need not spend ages on your investments, giving you more free time to enjoy your millionaire status!

 

This process means that you would become a millionaire:

 

 

It might take a bit longer but if you are saving in a SIPP or pension plan, are a bit uncomfortable investing in funds, or simply want to be less involved, then you might opt for what we call a single fund solution.  These are funds that contain a mixture of investments diversified across various asset classes aimed at investors with different risk profiles. 

 

Depending on the type of investor that you are (cautious, relaxed or ambitious) there are three ways to approach this.

For the purposes of simplicity, investors can limit the hunting ground to three fund sectors:

 

The names of the sectors are horribly uninspiring, so a little explanation helps.

 

For example, the Mixed Investment 40-85% Shares contains funds holding between 40% and 85% in equities.

 

With the possibility of an upper limit of 85% in shares we suggest this sector is appropriate for you if you are a tad more ambitious, are well informed about the downs as well as the ups of the stock market and are comfortable with this.

 

 

For less active investors (reviewing their investments every year) our Vintage* fund ratings are more appropriate.  Gold Members can download the January version of the Vintage Funds Report by following this link.

 

But remember: opting for a single fund solution is not an excuse for not engaging your brain. 

 

Whether you opt for a process like Dynamic Fund Ratings or a single fund solution using Vintage Ratings there are two keys to successfully hitting the £1m jackpot: Discipline and Process.