T Harv Eker: Your First Steps to Becoming a Millionaire

Men's Health - Singapore Issue

The author of the best-selling Secrets of the Millionaire Mind, T. Harv Eker, wonders why there aren't more millionaires in Singapore during The Millionaire Mind Intensive training seminar he conducted. "It's a rapidly growing economy with many opportunities to create wealth," he says. Case-in-point: If you had bought real estate property just over a year ago, can you imagine what it would be worth right now?

"People have many hang-ups when it comes to money," says Harv. "Some of them don't grab financial opportunities because they choose to be unaware of what's out there, while others are afraid to take a risk in case it doesn't pay off."

Whatever the case, these hang-ups are stopping you from becoming as wealthy as you want to be, says Harv. "And wanting wealth alone is not going to make you wealthy. You need to commit to it," he says.

To join the brethren of millionaires, you can start by living like one. No, it doesn't mean that you start spending millions of dollars which you do not have. "It means you have to start adopting the financial habits of millionaires," says Harv. A lot of the wealthiest people in the world today weren't wealthy to begin with. " They simply learnt new ways of acquiring and retaining wealth," he says. Ready? Get set. Go.

1. Splurge Guilt-Free

Here's a top you won't get from an archetypal financial manager: Spend up to 10 percent of what you make every month on something you truly enjoy, says Harv. "Start a habit of rewarding yourself." Research shows that providing a psychological reward reinforces a particular behaviour.

Not having enough money can cultivate a lot of frustration and dissatisfaction. "By making it a point to reward yourself for working hard or achieving a financial goal, you'll associate money with a sense of fulfillment," says Harv.

Millionaire Tactic: "Live big," says Harv. "Go out for an expensive dinner with someone you love, order a bottle of champagne to celebrate and don't order the chicken - go for a premium steak or lobster."

Remember: Even as you splurge, stay within your budget. "The key to wealth and success is to lead a balanced life, so the discipline works two ways," says Harv. Go crazy, but don't end up neck-deep in debt.

2. Work Smart

Having a dollar's-work-for-a-dollar's-pay mentality will not get you rich. "Working hard for your money should be a temporary situation until your money starts working hard enough to take your place," says Harv.

Your goal should be to set up passive sources of income. "This will enable you to be 'financially free'," says Harv, allowing you to live your desired lifestyle without having to work or rely on anyone else for money.

Millionaire Tactic: There are two categories of passive income: Investment earnings from fniancial instruments such as stocks, bonds, mutual funds, etc, as well as owning mortgages or assets that appreciate in value and can be liquidated for cash.

Another type of passive income entails generating ongoing income from businesses you do not need to personally be involved with. "These could be rental from real estate, royalties from intellectual property, licensing your ideas, becoming a franchisor and even owning vending or coin-operated machines."

Remember: Think long term. "Whatever business you own or job you have has to provide an opportunity for you to earn passive income either immediately or eventually," says Harv.

3. Value Yourself

What are you worth to the company you work for? "Take a look at your pay slip," says Harv. "You'll be paid in direct proportion to the value you deliver, according to the marketplace. And the keyword is value," says Harv. There are four factors that determine your value: supply, demand, quality, and the factor that presents the biggest challenge for most people - quantity. "Quantity simply means how much of your value do you deliver to the marketplace - how many people do you serve or affect."

Millionaire Tactic: Tap into your own talents. "Research shows that the happiest people are those who use their natural talents to the utmost," says Harv. Go a step further and share them with as many people as you can. "I refer to an entrepreneur as a person who solves problems for a profit," he adds.

Remember: Reach out to more people. "From the moment I even considered going into business, my intention was to affect tens of thousands of people," says Harv. "Do I achieve results that are different from an entrepreneur who is comfortable reaching out to a smaller customer base? You better believe it!"

4. Manage Your Money

Whatever money you have, start managing it. "The biggest difference between financial success and financial failure is how well you manage your money," says Harv. "People avoid managing their money by saying two things: It restricts their freedom and that they don't have enough money to manage. That's like putting the cart before the horse."

Millionaire Tactic: Harv recommends this money management strategy: Open a seperate bank account. Put 10 percent of every dollar you earn (after taxes) into this account. "Use this money for investments or creating passive income sources. You never spend this money - only invest it. But you can spend the income generated from it," says Harv

Remember: Acquire the habits and skills of managing money, even if it is a small amount, says Harv. "What matters is that you immediately begin to manage what you've got, and you'll be surprised at how fast you get more."

5. Look Closer

People in our society typically ask "How much do you make?" like it's a measure of wealth. "The true measure of wealth is your net worth - the financial value of everything that you own," says Harv. "There's a huge distinction between your working income and net worth. Your working income is important, but it is only one of four components that make up your net worth," he says. Your net worth is made of: your income, your savings, your investments and "simplification" - money you save by reducing your cost of living.

Millionaire Tactic: Decrease your cost of living, and you simultaneously increase your savings and funds available for investing. According to Harv, simplifying your life is a "dark horse" in creating wealth. "It goes hand-in-hand with saving money, where you consciously create a lifestyle in which you need less money to live on."

Remember: Building your net worth is a four-part equation, says Harv. "Focus your efforts on increasing your income, savings and investments, then scale down your personal overheads."

6. Invest in Yourself

"The three most dangerous words in the English language are 'I know that'," according to Harv. "You may hear or read about something, or talk about it, but unless you live it, you don't really know it." Success, according to Harv, is a learnable skill and to be continually successful (and wealthy), you need to be continually learning and growing. "Whether you're a business owner or a salaried worker, all things being equal: the better you are at it, the more you'll earn."

Millionaire Tactic: Speak to financial managers and sign up for business courses. "The only way for you to have the money you want is to play the game inside out. You need to learn the skills and strategies to accelerate your income, manage your money and invest effectively," says Harv.

Remember: "If you can learn just one new thing or make one improvement, your investment in education has paid off," says Harv. "To quote Benjamin Franklin: 'If you think education is expensive, try ignorance.'"

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