You may not think you have much in common with millionaires, but self-made millionaires, in particular, often started out from humble beginnings.
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Though the path to becoming a millionaire looks different for everyone, there are financial lessons along the way that even the average person can learn from.
GOBankingRates spoke with two self-made millionaires — Steve Davis, CEO of Total Wealth Academy and Chad Willardson, founder and president of Pacific Capital — to learn the best money advice they received on their journey to success.
It Takes a Team To Be Self-Made
Steve Davis finds himself uncomfortable with the term “self-made millionaire,” he said, “because I don’t believe there’s such a thing. I had 100 people on my team. It really does take a team to achieve these results.”
Davis started out in a sales job, working 70 hours a week, three decades ago. After winning a national sales contest and a trip to Hawaii, he came home to a significant salary pay cut and a realization that he didn’t ever want to work a regular job again.
A late-night infomercial on real estate investing changed everything — he put classes on his credit cards, and “two months later, I was wholesaling real estate, which doesn’t require a license, and making more money than at my job.”
He started out buying single family homes, then apartment units. “Then I discovered syndications where you partner with other people,” he said.
This ultimately led him to earning passive income investing in others’ real estate deals and doing what he loves most: teaching others how to live wealthier and healthier lives.
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Be Proactive
Perhaps the most important piece of money advice Davis learned wasn’t actually money advice at all. It came from a teacher in high school, Colonel Al Thomas, of the U.S. Marine Corps.
“He taught me about personal responsibility. He didn’t know the word, but Steven Covey calls it being proactive. He switched me from being a reactive person to proactive: to where I saw everything as my fault, good or bad. If it was happening in my life, it was my fault, and I loved it, because I could change it.”
Never Depend on a Sole Source of Income
Along Davis’s journey, he read a Warren Buffett quote that suggested you should never depend on a sole source of income, like a job, and should always invest to create a second.
“I was only exposed to stocks, mutual funds, etc., which don’t produce cash flow. He was talking about income-producing assets, which is when I discovered real estate. I built up that second stream of income almost immediately. That just woke me up.”
Surround Yourself With Successful People
Davis recalled hearing a saying: “If you hang out with nine losers, you will soon become the tenth.” Thus, the inverse is true, too, he said. “If you hang out with nine winners, you will soon become the tenth.”
Of course, “The difficulty is finding successful people that have time for you,” he said. Instead, he cultivated a group of mentors through books by reading authors like Zig Zigler, Steven Covey and Tony Robbins.
Read and Learn
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Davis quickly realized that he could learn what he didn’t know, and he believes this is a very important lesson on the road to wealth building.
“First be humble: If you’re not getting the results you want from your life, you have got to read. Read, read, read, and when you’re done, read some more. Admit you don’t know what you’re doing. Study until you do get what you want.”
Learners Are Earners
Willardson doubled down on the importance of learning, adding a phrase he heard along the way.
“I heard that ‘learners are earners and leaders are readers,’” he said.
Though he didn’t like reading as a kid or young adult, once he started his career and realized how much he didn’t know, he became obsessed with learning.
“I read books on money, success and self development and have made it a habit to read two to three books [per] week for the better part of a decade now. I became obsessed with learning, and now, I’ve written four bestselling books myself.”
Willardson also had humble beginnings, working for Meryl Lynch on a training salary for almost a decade, barely earning enough to get by until he quit and started his own company.
Be Afraid but Take Action Anyway
Another potent but lasting phrase Willardson heard that stuck with him is that “fear is kind of like wetting your pants, and courage is moving forward and taking action with wet pants.”
“I took a lot of action with wet pants, went for opportunities and took risks to build a business,” he explained.
Invest Early and Often
The most practical advice Willardson received is to “invest early and invest often, no matter how much money you are making.”
Even when he was making $36,000 per year and raising a family, he was still investing a piece of every single paycheck, establishing a habit that he’s never abandoned.
You Can’t Earn Your Way to Financial Freedom
Perhaps the hardest piece of advice to digest is that “you cannot earn your way to financial freedom; you must invest your way there,” Willardson said.
Lifestyle inflation typically absorbs any extra money people make, he explained. Only investing allows for compounding interest and bigger returns on your money.
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“How I invest my money and my time determines my future. And so [does] being intentional with money. If you don’t tell your money where to go, it will tell you where to go.”
