Becoming a Filipino Millionaire
I want to become a millionaire someday. Can a Filipino immigrant like me really becoming a millionaire short of winning a lottery ticket? Imagine that you came to this country with no savings and no college degree, how can you save $1 million dollars?
There is a way.
Your background, skin color, immigration status, and lack of trust funds or “mana” might be a disadvantage, but you still have a good chance of becoming a millionaire. By developing new money habits, you can change the trajectory of your finances and life. Money, after all, does not discriminate.
Your relationship with money and how you make it work for you is the biggest determining factor—not how much you make or who your connections are.
Lessons Learned from US Millionaires
Who are the Millionaires in America?
In a study conducted on a sample of millionaires in America, Dr. Thomas Stanley and Dr. William Danko found that many millionaires are first generation and self-made. Thomas Corley also found that 80% of self-made millionaires did not get wealthy until after the age of 50. So what are the lesson?
Two things: (1) most millionaires made their millions by their own sweat and blood, and (2) it took awhile for them to reach millionaire status.
How to become a millionaire in America
So how can you become a millionaire? In Stanley and Danko’s research, they found that most millionaires own businesses. But beyond that, those who do not own businesses have certain qualities that you can emulate. Here they are:
- Set a goal of saving 20-30% of your income every year. Try a 40-50% savings rate if you want to reach millionaire status faster. Be super frugal! To become a millionaire, you have to make sacrifices now.
- Avoid using credit cards and buy used but good quality items instead. A brand new car loses value immediately after driving it out of the dealer. A reliable used Toyota is all you need. Stop buying crap you don’t need to impress people you don’t like. A 40 to 50% savings can be accomplished if you really want to.
- Where to put your 40-50% savings? Maximize your tax-sheltered retirement savings such as a 401k and 403(b) first. Then save more by contributing to a Roth IRA. After you maximize those accounts, buy Index funds and/or index ETF’s such as VOO or VTI. (If you’ve never heard of these terms before, read financial independence blogs, such as JL Collins, Mr. Money Mustache, Get Rich Slowly, Millennial Revolution, Go Curry Cracker, or Millennial Money. Educate yourself.)
- Move to a low cost area, such as in certain parts of Texas, Colorado, Arizona, and Louisiana. A $800,000+ brand new home in the Bay Area California only cost $200,000 in Lafayette, Louisiana.
- Lastly, own real estate properties and rent them out!
Becoming a millionaire is mostly about being frugal and investing in the right asset class. Research investing in index funds and rental properties. Investing your money become less scary once you understand what you’re doing.
What have you done to save more? Do you think it’s possible to become a millionaire in your situation? What would need to change to make it possible? Please leave a comment below.
If you want to learn more about financial independence, read my other article: Financial Literacy Resources for Filipinos in America