“If you’re a Gen Y, you better become a millionaire …”
With a comment like that I know I’m setting myself up for some criticism! But, before you make up your mind, read on to find out why I believe it’s crucial to become a millionaire these days, and see if it makes sense to you (I have a hunch it might).
Last year I participated in a documentary with National Geographic called UnderCover Angel. The premise of the story involved dumping wealthy beneficiaries into a country, the location of which was unknown until the day before. They were to go into a disadvantaged community undercover to find out what were the major problems were and how they could undertake a project that would help the community. The project had to be completely funded by the beneficiary (myself).
I’ve secretly always wanted to be a part of a documentary. I also love being involved with philanthropic activities. With that in mind, you’d think I’d have jumped at the chance and accepted immediately, right? Wrong! I weighed my decision for a long time, and even came close to dropping out a few times up until the last minute. Finally, I decided to take the risk.
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You probably want to know what was holding me back. It had nothing to do with donating a large amount of money, a fear of being on TV, or being too busy to give up the time.
None of these reasons came to mind once.
What concerned me most was being labelled a “self-made millionaire” by the media—something I had largely avoided up until this point.
I tried alleviating my concerns by speaking to some amazing people who had been involved in similar TV shows. Unfortunately, what I heard was not good. They faced harassment on social media for not donating enough, not doing enough, or only doing it for their own benefit.
Honestly, I almost succumbed to these fears, which would have resulted losing an opportunity that turned out to be one of the most amazing and proudest experiences of my life. I’m forever grateful I made the decision to “screw what others would say and think”, and did it anyway.
I’ve reflected a lot on this situation and why I feared being labelled a self-made millionaire.
Being a self-made millionaire means that you have at least $1 million of net assets. Let’s break down what it really means:
- You’ve reached a level of excellence at your chosen profession and have been recognised through remuneration;
- You’ve been diligent with your money, spent less than you earned and not wasted money on instant gratifications;
- You’ve sacrificed short term pleasures for long term gains;
- You’ve taken risks to reach your goals;
- You’ve consistently saved and invested money; and
- You’re focused on being self-sufficient financially.
Upon reflection, these all sound like pretty great traits. I would guess that your parents would be happy if you grew up to have these traits, right?
Here’s the truth about my fear. Unfortunately, it comes down to the tall poppy syndrome we have in Australia. For some reason, it’s not “cool” to be successful. We would rather be mediocre than stand out from the crowd by setting and reaching our goals.
What’s even funnier about the whole millionaire discussion though is that $1 million today means something different to what it used to; we’re due for a perception shift regarding what being a millionaire means now in 2017. Blunt as it may sound, if Gen Y-ers don’t become millionaires, they may very well face many financial struggles in life.
What does $1 million provide to you these days?
With the current interest rate market and low investment returns, you’d be lucky to get between $30,000 to $40,000 dollars a year of income. I don’t know too many people in our generation who could live off that (especially once tax has been taken out).
I know some of you are thinking, “I don’t need extra income, I earn plenty through work”. You may be happy to work your entire life, so why build up these assets? This is a valid and honourable argument until you take into account your age, your likelihood of changing your views many times and the fact that unexpected things will occur in your life.
Your income may not be as reliable as you think.
Think about some of these scenarios:
- You or a loved one has a medical situation that results in your income being slashed in half or worse;
- You become miserable in your job and want to change careers to a profession that pays half the amount;
- Your job/skill set/expertise becomes better or more cheaply performed by robots or artificial intelligence, so you find yourself out of a job; or
- Medical developments progress so much that you live well over 100 (perhaps 150). However, you’re still unable to or don’t want to work in those extra years.
Bearing in mind your current financial situation, would you be able to handle any of these occurrences? Would you be able to take on the challenge and pretty much have your current and desired life continue, or would you succumb to extreme financial pressures and become dependent on the state?
This is not about being greedy or ungrateful for your current privileged situation compared to many people around the world. It’s about being realistic and taking control of your personal situation so you are in the best possible situation to take on the many and likely challenges that lay ahead.
I was able to put myself in that very situation. Participating in UnderCover Angel meant exposing myself in a way that I initially didn’t feel comfortable with. Even though some of the haters shared their opinions, I received more positive feedback than I was expecting.
Why? Because at the end of the day, I was helping others in need. When it comes to being a millionaire, part of the independence means being able to give back to others without worrying about your own financial situation.
Being financially independent gives me the confidence to go after any aspiration or tackle any challenge life throws at me, without losing sleep over my bank account. Anyone can get to the same state, it just takes hard work and discipline.
So how do you become a millionaire? You need to start taking action right now. You need to spend less than you earn, and have a well thought out and long-term investment strategy that you contribute to monthly.
You may need to find ways to earn extra income by adding more value in your current role, or by developing an extra skill set that enables you to earn income part time. In other words, start your side hustle!
Serial entrepreneur and recognised thought leader on Gen Y and leadership, Finn Kelly is a dynamic leader and visionary who knows how to get things done. Completely connected with his purpose and values, he lives life everyday to make an impact. He is a serial award winner, including SmartCompany‘s Hot 30 Under 30 twice. He is currently co-founder and chief information officer of Gen Y financial advice and coaching company Wealth Enhancers, and an angel investor in a number of startups.