What Makes You a Millionaire?

Becoming a millionaire requires a combination of factors like investments, financial literacy, entrepreneurship, and high paying careers. Many people aspire to be millionaires but do nothing about it.

To become a millionaire, you need to invest, start a highly successful business or get a high paying job. However, a majority of millionaires are not employed. Instead, they are investors and entrepreneurs.

As such, to become a millionaire, you need to adopt some common habits for millionaires. But then, what are these habits that make you a millionaire? Let’s jump into it.  

Who is a Millionaire?

Before I can answer what makes you a millionaire, it would be best to first define who a millionaire is. A millionaire is an individual whose net worth is equal to or exceeds one million. A net worth is the value of assets one owns then you deduct liabilities. 

Habits That Made Me a Millionaire

I am going to discuss some habits that made me a millionaire together with those that are common with other millionaires. They include:

1. Having Multiple Streams of Income

To become a millionaire, you need to develop multiple streams of income. Millionaires don’t depend on a single stream of income. The average millionaire has at least three streams of income.

The most common streams of income among millionaires include earned income, profit income, interest income, dividend income, rental income, and capital gains income. Millionaires earn salaries from their jobs and other incomes from their investments and businesses.

Having multiple sources of income provides you with some sense of security in case you lost your main source of income. As such, if you have a single source of income, you are one step away from poverty.

2. Living Frugally

The other habit that made me a millionaire is to live frugally. Millionaires are very intentional about their spending. They don’t blow money on unnecessary expenditures. Living frugally helps you prioritize the most important things.

Frugal doesn’t mean cheap. It means spending less money on the things that don’t matter. For instance, while millionaires can afford branded clothes, most of them prefer to dress simple. They save the money they would have otherwise spent on unnecessary expenditures and then invest it. 

Also read: How to meet millionaires for business.

3. Avoiding Debt

The other common habit among millionaires is avoiding debt. However, some debts are worth it. For instance, you can use debt to get richer by buying assets that appreciate. However, in such cases, you need to consider debts with extremely low interest rates.

Precisely, millionaires avoid unnecessary debts. For instance, credit card debt attracts high interest rates. Wealthy people avoid credit card debts by paying for things using cash.

You too can avoid unnecessary debt by avoiding shopping for things you can buy in cash. This can save you huge interest rates and increase your chances of becoming a millionaire.

4. Risk Taking 

Wealthy people and millionaires are high risk takers. They take calculated risks in their careers and investments. Most of the risks wealthy people take to pay off and earn them high returns.

Sometimes those risks fail to yield returns resulting in losses. In such cases, millionaires do not give up. Instead, they take lessons learned from such failures. They rectify their mistakes, strategize, and risk again. This way, they are able to learn from their mistakes and become better.

5. Financial Literacy

A majority of millionaires are financially literate. They know various financial skills such as budgeting, saving, investing, borrowing, taxation, and lending.

Being financially literate helps you understand how money works and how you can avoid expenses such as tax expense that is legal.

To become a millionaire, you too need to learn how to budget and avoid spending money on unnecessary expenditures. You also need to save that money and invest it so that you can grow your wealth.

6. Avoid Keeping Up with Joneses

Millionaires avoid keeping up with Joneses by blowing up their money on expensive gadgets such as the latest phones, or luxury cars. Millionaires don’t try to look rich. Instead, they look for real wealth and avoid comparing themselves with the Joneses.

The downside of keeping up with Joneses is that many people get into debt trying to look rich. With time, living beyond your means catches up with you. And if you have been accumulating debt, you fall into a debt trap.

7. Keeping an Emergency Fund

Another habit that made me a millionaire is keeping an emergency fund. It helped me stay afloat sometimes back when I had lost my job.

An emergency fund is different from savings. It is a special fund that is meant to cater to unexpected expenses such as medical bills or the loss of a job.

Financial experts advise that one should keep an emergency fund enough to last them for at least six months. An emergency fund can help you avoid getting into debt and consequently paying high interest rates on loans.

Also read: Jobs that can make you a millionaire.

8. Identifying Opportunities

Millionaires tend to see the best in every situation. When there is a problem, they look for solutions and make an opportunity out of the problem.

The ability to identify opportunities helps millionaires create profitable products and services. That is why a majority of millionaires are entrepreneurs. Besides, millionaires are resilient. They are usually able to overcome setbacks and failures.


You become a millionaire when your wealth is valued at at least one million after deducting your liabilities. To achieve a net worth of at least one million, you need to own a business, invest or find a high paying job. After that, you need to develop habits that make millionaires we just discussed such as living frugally and avoiding debt.

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This article was updated on January 31, 2024

Vincent Nyoike

Vincent Nyoike is an experienced business consultant and financial analyst. He is a CPA and is currently pursuing a Master of Science in Finance and Accounting at JKUAT. He holds a B.Sc. in Applied Statistics from the University of Eldoret