I was asked “what do self-made multi-millionaires do differently than the average working person?”

I often write answers on Quora, where I am the most viewed writer for investing, wealth and personal finance, with over 227 million views in the last few years.

On the answers below, taken from my online Quora answers, I focus on a range of topics including:

  • What skills can help you become a millionaire?
  • What do self-made multi-millionaires do differently than the average working person?
  • When it comes to the stock market, do people panic sell and ask questions later, especially during very extreme crashes?
  • If somebody wins $1m on the lottery, how should they spend the money? Or is the question itself the wrong way of looking at things? Perhaps instead we should ask how to mange the money properly to ensure it doesn’t run out.

If you want me to answer any questions on Quora or YouTube, or you are looking to invest, don’t hesitate to contact me, email (advice@adamfayed.com) or use the WhatsApp function below.

What skills would someone in their young 20s with zero net worth need to become a millionaire by the time they reach 25-30?

Becoming a millionaire in less than a decade is possible but much harder than doing it more slowly.

If you want to go from $0 to $1m by 30, you will need to learn skills that will:

  • Help you scale your income
  • Ensure you don’t just spend more as you make more
  • Focus on compounding your money through sensible investing

What is more important isn’t reaching the objective by a certain age, but giving yourself the best chance by learning certain skills.

If you learn these skills, you are more likely to achieve the feet someday, regardless of whether that is at 30, 40 or 50.

Income-related skills

  • Anything which can be scaled. By scaled I mean increasing something without needing to work more. Examples include an e-commerce firm can sell millions of sales instantly…..a physical shop can’t. Likewise, a YouTuber can make one video, spend 1 hour on it, and can monetise it forever if it works. There are literally 1,000+ scalable skills. Find a scalable skill you are good at and improve it.
  • Improve your strengths more than focus on your weaknesses. It tends to work better. So, find out what you are already good at, and improve that.
  • Anything related to marketing, including digital marketing, sales, business skills etc.
  • Working on performance, for example as a recruiter or any other number of jobs, as opposed to on a salary. Or, work on a salary and find a performance -related side hustle and build it up. Again, scalability is important.
  • Learning how to learn. Many people forget that this is the most useful aspect of university, not usually the degree itself. Reading a lot, provided you try to implement, can be important.
  • Learn to solve problems for other people. People will pay for that provided you can actually get your voice out there in the first place – the aforementioned marketing skills can help with that.

Money-management skills

This skill becomes more important as you earn more. These skills can include:

  • Cashflow and accounting. Even the basics can help you run a business. Just like your personal finances, the bottom line in business matters more than the top line. There are many businesses with great revenue streams who don’t make profits due to expenditures.
  • Spending your own money wisely. It isn’t possible to become wealthy if you spend more than your earn, no matter how much you earn. There are plenty of people out there who have earned millions and are broke.
  • Investing rather than saving. In the era of 0% interest rates, you can’t realistically get wealthy from saving, unless you are very frugal and earn a lot.

As a final comment it has to be remembered that mindset and habits tend to be even more important than skills.

There are loads of highly skilled people who are broke. Equally there are some people with fairly low skills who are wealthy.

The difference? Execution, and not focusing on ideas alone and mindset.

What do self-made multi-millionaires do differently than the average working person?

Most multi-millionaires, contrary to most myths, start out as average working or middle-class people.

Only in a few countries and regions does inherited wealth dominant.

This leads me to my first observation. People who become multi-millionaires are more likely to think they can get there in the first place.

They are less likely to think the whole system is unfair and “rigged” against them.

They are less likely to engage in political protests which demands change, and more likely to understand that the best change comes from within.

I will give you a simple example of this differences in perspective.

When I graduated, it was one of the worst times to do so, as it was a few years after a recession.

I noticed there were plenty of my classmates who would spend time complaining and not doing anything about it.

In comparison, there were loads that took quite big calculated risks, and took actions.

Those actions could have been moving to another city to find work, emigrating, getting paid on performance or many others.

The point is, taking action and focusing on execution is key when you look at long-term trends.

We have also seen the same thing during Covid. Lockdown was awful for any business in the face-to-face economy.

Yet there were two kinds of people even within the sector – those who complained and demanded government support and others who innovated with deliveries and many other ways of doing business.

Apart from taking action and calculated risks the other commonalities I have observed are:

  1. Focusing on investing rather than saving. It is almost impossible to save your way to multi-millionaire status unless you earn loads of money and don’t spend much…..and even then inflation will erode the money. Money needs to be put to work.
  2. Long-term orientation vs just looking for a quick book. Being willing to work for less in your 20s can make a lot of sense, if you are honing your skills or working on performance rather than a salary. I remember I spoke to an English teacher from the UK who lived in Shanghai when I did. He was making really good money for his age, as he did private tutoring, during a time when the Chinese economy was skyrocketing. He was offered a low-paid, but very high-commission, sales and marketing job. I told him to take it. The reasons were simple. He would be improving his skills, his income would be scalable and eventually could surpass what he was earning many times over. Even if he failed, he could go back to being a teacher. Fast forward ten years and the regrets not taking the job now.
  3. Not giving up after a bad period.
  4. Being focused more often than distracted – actually knowing what you want is a good start.
  5. Avoiding toxic people and not allowing toxic thoughts and ideas, like criticisms, to affect you.

6. Don’t focus on money alone. That doesn’t mean that most think money is unimportant but the process can be more important such as what problems will you solve as a business owner which will get you the money in the first place, or how will you invest to compound.

7. 7. Don’t spend money all the time on stupid things, to impress people you don’t even like or respect.

8. See the bigger picture. The world doesn’t resolve around your local economy or even national economy in a global (and indeed digital) world.

A final one would be they tend to scale their ambitious after the first $1m.

Most people tend to go into preservation mode, or even worse, become complacent.

The world is full of former multi-millionaires. Covid has only increased that, because many business owners were complacent and didn’t diversify their revenue streams whilst they could.

If business is going well, that doesn’t mean it will do forever, as any kind of black swan event could change the rules of the game.

Few prepare for events like Covid, 9/11 and 2008 which can suddenly change the rules of the game overnight for some industries.

When it comes to the stock market, do people panic first and ask questions next?

It depends on the individual and the times we are living in – more specifically how extreme the volatility is.

During fairly “normal” periods for stocks, whatever stock markets are increasing at an average rate comparable to historical averages, people don’t tend to panic as much.

When stocks are moving up much more quickly than historical averages, people tend to get greedy.

When stocks fall hard, that is when people panic. Small reductions don’t usually panic people.

What’s more, panic selling can even affect people who usually don’t do it, or claim they won’t do it.

Last year was a great example. The stock market fell more quickly than ever before:

It has happened numerous times in history where the stock indexes have fallen 50%.

This was the quickest such fall on record though and it got people to believe that dangerous adage – that this time is different which is a dangerous word:

It was certainly expensive once again this time. I expect to see similar trends come the next 50% crash – people will panic with only a sensible percentage of people who don’t panic sell.

There is also a second kind of panic seller. Somebody who waits until they have broken even before selling.

In other words, if the market falls by 50%, they sell once it has risen by 50.1%.

Sounds more rational but as the last 12 months shows, it isn’t in reality.

It is just one or two ladders down the fear ladder from all out panic.

Sometimes doing nothing during such periods is far harder than doing something.

If you won $1 million, how do you feel it would be best to spend it on?

As John said below, emergency funds and retirement would be a sensible way to use the money, unless you already have a lot of money to begin with.

The reason is simple. Studies show that between 30%-60% of lottery winners lose the money and eventually become broke.

The reason is simple. They ask the question “how can I spend this money”, instead of “how can I manage this money in a way that I can continue to live a good live”.

Remember $1m only equals about $40,000-$50,000 of safe income per year, if invested well.

Yes you can invest in high-risk investments and maybe earn more, but that doesn’t make sense if you hope to retire on the $1m.

That isn’t actually a lot of money. It is an average salary in most developed countries.

So focusing on “what can my money earn me” as opposed to “what can my money buy me” can be the key.

Even if consumption is the goal somebody will be able to buy more things long-term if the money is growing.

Pained by financial indecision? Want to invest with Adam?

Financial Planner - Adam Fayed

Adam is an internationally recognised author on financial matters, with over 227 million answers views on Quora.com and a widely sold book on Amazon.

Further Reading

In the article below, taken from my online Quora answers, I answered reader questions on the following topics:

  • What are some tips to becoming ultra wealthy (say somebody with a net worth of over $30m)? Also, how does that compare to acquiring one or two million? I compare some of the differences I have observed.
  • Can somebody live off 5.5 Million Yen a year (about $55,000) in Tokyo if they have a family, including one child?
  • What are the most typical ways to become wealthy, including real estate, stocks and starting your own business? Besides, should we care what is typical and normal anyway?
  • What is the reason why more people don’t save and invest for the future, yet many people in developing countries manage to save? Is it because of the economic crisis, or could more complicated issues be at play in most developed Western countries?

To read more click on the link below:

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