How to make your first million 1
Before you can make a million pounds or a million dollars for that matter, you have to understand money. You must realise it is really paper and it goes down in value; unlike the gold coin in the picture that has gone up in value compared to the paper fiat money by 50% in a couple of years! I wrote about that in Frugal Friday | Saving Real Money and you might like to read that.
Wasters never get rich
Wasters never get rich and so you will have to give up wasting money on designer gear, fashion, cigarettes, booze, eating out and all form of gambling including the lottery. I don’t include risky investments in the excluding gambling, you have to take calculated risks! You have to become thrifty and frugal in the extreme, maybe even downright; stingy. The stingy life style particularly applies if your family and friends are wasters! You will also need to acquire some new tastes for cheap, rather than expensive. Acquire a taste for cheap chicken rather than expensive steak! You could even go veggie! I’m not sure if going veggie is that cheap, but certainly beans on toast is fairly frugal. I like egg and chips; I had that for dinner last night! It was Frugal Friday!
My window cleaner
My window cleaner started his business last year, well you don’t make a million working for someone else do you? He needed equipment and that costs money for ladders, scrims and squeegees. You also need transport in the window cleaning business and he also does value enhanced work; work that pays better! To supplement the window cleaning they also jet-wash drives and patios; this is more profitable. He won’t make a million, but if he is thrifty and frugal he could have enough capital in a couple of years to launch a window cleaning and jet washing service in an even more affluent area to where I live! Perhaps he could diversify the business even more? He could even employ other people or franchise it? To franchise it he would need a brand and an image; even a Facebook page and a website! What else needs cleaning around the home? What needs cleaning around small businesses? You can clean vehicles with a jet-washer; that’s what I use mine for… You have to be a bit creative to make money… Do you have any ideas?
When Alan Sugar started his business he set up a company, Amstrad. The first three letters are his initials Alan Michael Sugar. It is quite easy to get a new company set up, you can do it yourself but having a specialist company do it for you, is probably better. A limited company is a separate legal entity and although you can own it; if it goes into liquidation, you don’t go bankrupt. There are legal responsibilities when you become a company director as well as the status of being a Chief Executive Officer of a limited company, of course. The main advantage is that it is separate. If you invest your own money, you have to pay income tax on the profits but with a limited company, the company is separate and would be liable to corporation tax of 20% as a small company. The tax situation is a little complex, but let us say your company invested £100,000 and 5 years later those investments were worth £150,000. The company is now worth £150,000 and so you have grown richer but no tax has been paid. The corporation tax isn’t paid until the investments are sold. The same applies if you held the investments and sold them, you would then be liable to capital gains tax. It is possible to avoid some of the tax using a limited company and your shares in it grow in value. The other advantage of a limited company is you can pool your expertise and capital together with other people to start a business.
Nearly all businesses are on the internet now with a website and the website itself can be a business. This blog is on WordPress which is a kind of CMS; content management system. You can also get a domain name something like my-new-business.com and some webspace and put WordPress on your own webspace. This is what I intend to do soon; I need a really cool name for the new site. With WordPress on your server you can put blogs like this on your site, music, video, photographs and have a ‘shopping cart’ so people can pay you money! You can also put links to advertisers on the site and affiliate the site with other sites that sell things like the major online retailers. A really popular site can be worth millions; one sold for £37 millions a couple of months ago.
It sounds easy doesn’t it? It isn’t of course, you need to acquire some skills and learn how to write, do research, take photographs, make videos, use social media, network and a few other things! It is worth thinking about though; isn’t it. If I have you thinking and being creative then you have a chance of making your first million; if not, buy a lottery ticket!
Remember to even stand a chance of becoming rich you need to be thrifty and frugal, but above all, open minded. There are lots more blogs to inspire you on this site and I would like to hear from you, so why not comment. There is a box when you comment that you can tick to subscribe. Subscribe and you get an email every time I post a blog; you’ll be sure to get an email when I post the next How to make your first million blog! More links to blogs on the Home Page.