Making millions is not as difficult as making your first million, and regardless of your background or circumstance, there are opportunities all around us that create new millionaires just about every day. I am going to show you how to become a millionaire.
For me making a million dollars was never a goal, nor did I care to but rather was interested in the freedom and luxury lifestyle that came with it. It was in my younger years that I grew a passion for exotic cars and the lifestyles of those that drive such cars and made a promise to myself that I chose to keep very close to my heart. I am sure many of you also have similar goals and ambitions and perhaps by reading on you may find for yourself a few tips you can use to help identify the right opportunities to help you get there.
Making your first million isn’t that difficult either, but it does take time to get there, and more importantly it takes a series of good choices, followed by some amazing actions, it also takes remaining very focused on the goal at hand.
For this particular story, I am going to share with you a step by step look at how I did it, and thankfully for you, I am not going to tell you how I bought a 100 homes at once or made 2000% on an investment, but rather a combination of the above with a blend of entrepreneurship, business, finance and even a 9-5 job in the mix.
The three main things I attribute to becoming a millionaire.
- Embracing Economic Pressure
- Surrounding myself with the right Entourage
- Never allowing emotions to dictate my actions.
If you want to become a millionaire it starts with your understanding of money and your emotional disconnect with regards to it. You must learn to let go of greed and the fear of losing money, but you must also understand how money works in general. You must understand 3 fundamentals around money itself: the power of supply and demand and how one impacts the other, how the credit markets work and their importance on the economy, and finally the concept that residual income in order to make money past your capacity of working.
It is very important to understand all these things because without that simple understanding everything you read and hear online seems like a “one-off” miracle. It really isn’t a miracle and it isn’t magic. Belief in itself plays a major role when establishing goals and working hard to reach them.
Most people that hear of others having made money often think you need large money to start or will often say that they simply can’t risk anything, and therefore fairy tales of stock market fortunes won’t apply to them. This excuse is no different than saying you won’t start a business because you are afraid that it may not make it or you simply won’t buy a home because values may continue to drop. All of these are excuses people use because they have no tolerance to risk.
For me, my business life started very young at the age of 14, and yes, it is important for you to understand the full context of how I made my first million rather than just understand the generalized version. I was in my high school cafeteria when I saw a sign for “customer service reps” paying $12/hr plus commissions.
As a confused 14 year old with a working single mom and no green card to actually use to obtain normal fun employment at the mall or other retail institutions, it only made sense for me to inquire.
This organization was small and required me to make cold calls to local residences to sell roofing, siding, and kitchen remodeling. It was ultimately a telemarketing job, and since the company was small, a schoolwork permit was enough to get me in the door. As a 14 year old, it only made sense for me to do a good job as I saw the value of employment since it was so difficult for me to obtain work elsewhere.
I worked hard and actually made all the calls I was supposed to rather than waste a lot of time in between calls. As a result of my 3 hours a day work schedule and my tenacity making calls, what started as $12/hr ended up being $1500 a month in commissions and eventually $1000 a week. I didn’t think I would become a millionaire doing this but, I learned that hard work pays off.
Making about $45,000 annually at the age of 15 is quite an accomplishment and one that can either get to your head or one that can help build a strong foundation. I decided to save most of my money and continued to grow in the same organization to eventually reach a director level position by the age of 18 earning right under $75,000/yr.
I managed to save roughly $60,000 by the age of 18, and even though I could have saved more, I had always wanted a nice car and so I had gone through a new Trans Am, Mustang, and Camaro SS by that age, and so I only had $60,000 in my savings.
I used most of that money to invest as a down payment in a house located in Virginia, which I bought for right under $200,000. My payments were low, my income was high and my equity leverage was good with 25% down. I bought this house only for the sake of providing a home for my family, rather than as an investment. At 18 I also started working for a bank and took a 30% salary cut only to be able to go to school.
My 80/hr plus schedule wasn’t ideal for college and therefore made me realize that I needed a normal 5-6 day a week schedule but I was also curious as to how banks worked and always felt that if you want to understand money, you should be around money. So a bank made perfect sense.
I worked in management at the age of 18 and spent most of my free times studying loans, stocks, and just about anything else I could find on “how money flows”. I quickly understood how banks make money off of loans and also why they like giving bad loans too and what happened when people default on loans. The main learning was how they determined who got a loan and who didn’t.
I also started understanding a bit more about the way people file taxes and the loopholes around the system. I was determined to reach a level of wealth above what my family had ever accomplished and become a millionaire because lifestyle mattered to me and so understanding the system made me realize I needed to start a few companies to get the maximum tax benefits I could.
Now most people think of how to make more money, but my focus was to be realistic with money and instead of seeking more, I wanted to close the gap between my gross and net income and only measured my income through my net take home, rather than my gross earnings. Just cause you learn to make more money doesn’t mean you actually live better.
Anyhow, after I created my companies, one of which was a detailing company that specialized in high end cars, I started learning how to write off cars and my lifestyle elements to lower its cost on my overall life.
The World of Real Estate
I increased not only my net take home from my corporate income, but also gave myself the greatest gift in the world, access to unlimited creation of my own pay stubs. By being able to write my own income in a “stated” income loan environment meant that I now could buy just about any home I wanted, even those I couldn’t afford. By studying the real estate market, I started to understand how history repeats itself but real estate always remains a strong long-term investment.
I chose Virginia because of the upside potential and the fact that government was right around the corner in DC and had started its growth recently; it made business sense that there would be major growth there in the next 5-10 years. Having only an income of $60,000 and depleted savings made it difficult to own and hold multiple homes and so I used a different strategy to get myself some capital.
I would find pre-construction homes in further places that were not due to build for another year and so all I needed to secure a lot was $5,000 to $10,000 with an approval letter from the bank.
I forecasted that properties demand would exceed supply by 2004 and positioned myself ahead of the market by securing as many lot as I could all while working hard in a bank, getting loans from other banks with pay stubs from a detailing business that barely made $3,000/mo, all of which went to buying more homes. I acquired my main chunk of additional capital through a Line of credit on my existing property.
Meanwhile, I also started looking into commercial real estate, which was undervalued especially knowing how quickly the residential market was growing. I looked but couldn’t afford to buy, so I kept up with the market trends from a spectator level only.
In 2003, people started lining up early to buy some of the lots from those places I held lots with deposits, and as expected, my 17 lots were highly valued and demand far exceeded supplies, so a “premium” would be added to all homes sold and sometimes in excess of $40,000. I was almost cash broke, as all my money was tied into these lots I had secured way ahead with small amounts but I realized the situation to be temporary and didn’t allow it to impact my actions or to fall back, instead I pushed forward to get myself out.
I often held some of the best and first lots since I locked them in over a year before they were built. I would go wait in line with those buying at 1-2 am as lines formed for the 8am opening only to wait for the builders to ask for their 20-40K premiums.
When I saw that people were willing to pay $40,000 just to have a home in 6 months to a year, I offered them one of my premium lots at $50,000 which would be ready next month. They paid $10k extra but saved 6 months and made me $50k cash. By being in line, I got to know people and who was a cash buyer, versus those that were seeking financing.
It helped me differentiate who to approach. By 2004, I had sold most of my lots and accumulated over $250,000 in my savings which I would used to get into the already built real estate and commercial real estate markets. I invested $200,000 of that money into a series of commercial properties in Virginia and also looked into condos in Miami.
Again, using bank’s very greedy and generous approach to lending money, I secured over $1.3 million in debt that I couldn’t afford with moderate down payments. I secured 6 condos in South Beach, each selling for $300,000-$350,000 with 5/1 interest only arm loans, giving me $1,000 payments with 5% down. This was very risky due to the fact that I was in debt significantly more than I could afford and I only had $40,000 left in my savings.
The main factor here that made these very attractive was the equity they would build in the next 2 years and also the fact that everyone was spending all their home equity money on leisure and luxury lifestyle and it made sense to rent these condos for $2,500 a month or more giving me once more great cash flow.
I continued to work full time and moved up in corporate America while living well into my means but always still found myself upgrading cars, even if I had to take loans out on them, it was important to keep up appearances as opportunities excited all around me and you would be surprised what a nice Porsche (not a Boxster) or exotic car will do for you.
I also ended up buying 2 warehouses for less than $100k each that already had businesses functioning out of them, and simply re-rented to the businesses at the same rate they were paying. Leveraging interest only options and lines of credit on the house I lived in allowed me to net over $3,000 in rent from each of those units a month. I now not only had good cash flow of over $12,000 a month net at the point, but was sitting on well over $500,000 in equity by late 2004, not including my own house which was maxed out in loans to accommodate these investments.
Becoming a millionaire was not out of the picture at this point. It was within my grasp.
I was also now working as a VP of a bank making well over six figures a year, and had fully given up on school years ago. I was in a position where I had no immediate supervisor and my results were based upon how well my staff worked and executed on my direction. I did eventually hire a financial assistant to manage all the properties and book keeping.
At the end of 2005, I saw the potential for a storm coming and decided to look into a very strong and quick exit strategy. How did I anticipate the storm? You can read more about that in the Third Circle Theory, but to make a long book into a short answer, I simply paid attention to main stream as my indicator of wall street’s future. I knew how I was cheating the system to secure lots and loans and so it only made sense that normal people would catch on too and start and organizations would create additional ways to not be taken of their profits.
The Exit Strategy
That was my signal to get out. Long ago I heard the saying, “be afraid when others invest and invest when others are afraid.” I had a conversation with my neighbor who was a cab driver who informed me that he just bought his second $800,000 property on a $70,000 salary. Knowing what I knew about supply and demand and the way banks wrote off losses and gains, I started rethinking my views on how long this ride would last. I also started to see that foreign money was pouring into the country as investments and therefore the whole system had become a giant game.
I liquidated over $2 million in properties in South Florida and $350,000 in commercial properties in Virginia in less than 90 days while the market was still hot. Those condos were now selling as high as $700,000 and therefore sold quick when I listed them in the $600′s. I did keep three very nice townhomes I bought really cheap that were in great locations. In order to live in one for free and rent the other two so I don’t lose my cash flow entirely.
I helped the business owners buy their own buildings through the same financing tricks I knew that was a mystery to them, and ultimately got more than my investments in the commercial warehouses back.
That unfortunately was not enough to reach my first million believe it or not. I was still working because I not only loved my job, but I also liked having this secured income while I had all that debt at the time. It was now 2006, and I was sitting on close to $780,000 net, none of which was invested. This was after I had paid all my gains and taxes which was good but since I live in a net game, I still wasn’t a millionaire per my own net worth standards.
By this time, I owned over seven LLC companies and my accountant was my best friend but I was too afraid to play in the market too because I saw its correlation into the real estate market and knew it would all end at once.
A New Market
I had my house, my Porsche 911 Turbo paid off, and still had my six figure job, but I really didn’t know what to do to continue to grow. I decided to take the entrepreneur route while I worked a 9-5 job and expanded my detailing business into a luxury concierge business which catered to all these people spending their real estate earnings.
I knew people were on a spending spree and so I decided to take a piece of their money instead of getting back into real estate. I founded VIP Motoring and quickly grew it into $½ million a year in revenue, but more importantly a giant tax write off.
I would help people acquire luxury lifestyle at a cheaper rate than they would normally pay because once again supply was scarce for luxury cars, watches, and homes, and whatever I would save them, I would keep 50% of, it was a win/win business situation. The beauty was that I acted more as a locator of goods and referral business than actually inventory something.
It was ultimately the relationships and networking with some incredible people that became the biggest gain outside of the few dollars I made. I was running my business from my work office until it caught up with me, and I was betrayed by my own fatal mistake. I was let go as a result and lost my only secure income stream.
Through my business, I met a guy named Luigi, who bought a Ferrari 360 from me and who told me about his business, which involved foreign currency trading, but not FOREX. His business included taking cash bank to bank internationally and trading it. I never really understood what he did but I decided to learn more about it and about him and his business, which had been around for over 10 years. I needed income as I had lost my job and the only cash flow I had was my rental properties.
I knew my business income from rentals and luxury concierge services wouldn’t last once people started losing money on real estate. I studies past financial crashes and understood that often when the US crashes, other countries and currencies prosper. It’s almost like a giant cycle and it’s important for people to understand that the cycle repeats itself but the length of the cycle and time in between cycles changes because the dynamics of the economy are constantly changing.
Either way, back to my story. After I met Luigi, I decided to let him manage $300,000 of my money and get me these so called promised 10-20% returns a month (which honestly made no sense) and so we embarked in a partnership that was quite scary, as you are ultimately trusting one guy to make you money without knowing how much money he makes off your money or what he is doing with it (my biggest fear was a ponzi scheme).
I was young, and believed in myself enough or perhaps too much and still had a high tolerance for risk as I had never really lost much in the process. In 2007-2008, all markets had crashed, fortunes were lost and my $300,000 was still with Luigi being invested in foreign currencies, primarily the Euro, per my request.
Markets crashed, banks collapsed, people lost everything and fear consumed the entire financial market as the US faced potentially a collapse greater than it could handle. People saw CITI bank stock as low as $0.33 and Bank of America trading at $2.50 a share.
That might seem very scary to some especially as the government allowed Lehman Brothers to crash but to me, a golden opportunity appeared: two major investments for $50,000 each into the 2 most likely banks to crash in 2008: CITI and Bank of America. I invested because I still believed you invest when others are afraid but also because I worked in banking and understood that it was impossible for the government to allow Bank of America and CITI to collapse.
It was almost like saying we would allow another country to invade us without ever putting up a fight. I knew they could do something about the collapse and I also understood that this was the time the money I gave Luigi would start spiking, as foreign governments would invest in the US at very low prices both on a market level and bond market.
I got $470,000 back from Luigi and made roughly $120,000 net in 2 years after taxes and eventually sold my shares of Bank of America at 260% gains and CITI at well over 500% gains. Not typical and I have yet to duplicate these types of gains, as it simply took major balls and an understanding of the finance sector.
I had officially made over $1 million in net cash by the age of late 27, and now owned my Lamborghini Gallardo and CLS55 AMG out right, had no house payment, and still owned 2 rental properties and 2 real LLC revenue producing companies. All the numbers discussed above were rounded down, not up as I am strong believer in net gains rather than inflated gross numbers.
Lessons Learned: How to Become a Millionaire
So what did I learn from all the hard work, constant headache and lack of sleep?
- Becoming a millionaire can happen overnight, but is unlikely. It took me 13 years of hard work, good decision making, and constantly acting on my goals. You might say that that is a long time, but if you had 10 years to your age now and assume this could be your retirement age, then you might consider that it’s not that bad. Bottom line, start now or you’ll always wonder “what if“
- You can’t become and remain a millionaire doing only one thing. Most of us have our hands in more than 2-3 industries. Even if not from an Entrepreneur standpoint, it is often the combination of investments and our work that gets us there.
- Instant gratification is bullshit, don’t fall for it. Anyone who tells you they made a million selling someone else’s product or service and now is selling their own is on crack. The one that made the system is the millionaire because he learned how to make others work for him for free.
- The greater the risk, the greater the reward.
- Don’t be greedy, be emotionally disconnected from money.
- When you want something bad enough, you tend to not sleep as much, because your mind is always working. Balance your life but push your limits. No one created an extraordinary outcome for themselves through ordinary actions.
- If someone calls you crazy for taking a risk or doing something, it is only because they don’t see what you see or know what you know, so what is crazy to someone today becomes a trend others follow tomorrow. A trend you started that you benefit from, not them. It’s crazy ideas and risks that got us this far and the same crazy that’ll get us further.
- Your Entourage matters, surround yourself with incredible people and make sure to keep in touch and form long term relationships, not just business partnerships.
Ultimately everything I learned and how I became a millionaire helped me become who I am today and understand what matters more than just money and lifestyle. Through my journey, I reflected back and understood many of the components that allowed me to do what many others feared to do. The things that happened that allowed me to become limitless in my approach to wealth and success. I owe it all to observations we all experience everyday and outline it in the Third Circle Theory for those that seem stuck in the same circumstance over and over again.
Pejman Ghadimi is founder of The Third Circle Theory, millionaire entrepreneur, author, life coach and leadership consultant. Pejman Ghadimi shares a very unique perspective on success and entrepreneurship; one that involves the birth of innovation through the impact made on others as well as the human connections we create daily. For many years, Pejman focused his efforts on making money and accumulating wealth only to find himself faced with the constant need for change, until he discovered what he refers to today as the Third Circle Theory. This self analysis of one’s existing life through multiple perspectives and visions enables an individual to turn every aspect of his life into one where he/she has total control of the outcome