One of the biggest lies most people tell themselves is that they are millionaires simply because they have been paid a cheque of a million or cumulatively earn over a million in a year.
Far from it, a millionaire means something completely opposite. Earning a million and being a millionaire as far apart as the West is from the East. Of course, being able to make a million is a great starting point toward becoming a millionaire. But it does not mean you automatically will become one. In fact, many people make a million a year but never become millionaires in an entire lifetime.
A millionaire is someone who is able to keep at least a million shillings on average from his earnings. This is not the occasional or once-a-moon million that some of us get in the course of our lifetime. Millionaires are those who are able to sustainably retain over a million after covering their costs, and debts and meeting their obligations to society.
It also matters a lot which currency we are talking about here. A millionaire in Kenya shillings will be reduced into a holder of 8,000 dollars if the currency of measure is US dollars. If the Kenyan shilling millionaire crosses over to our neighboring nations of Tanzania and Uganda, the same person will instantly turn into tens and hundreds of million of millionaires.
For a good measure of your money and wealth success, I would highly recommend you always assess your success in dollar values. This is because as the international currency, the dollar values are the true representation of your true purchasing power. Besides, with the dollar, you can travel to any corner of the world and still find your money holding value.
For instance, beyond where we border Tanzania and Uganda, and in financial institutions within East Africa, the Kenyan shilling reduces to a worthless piece of paper. I believe the true bragging rights as a millionaire should only arise when you get into the dollar millionaire club. As per the most recent global wealth data, there are slightly less than 3,500 men and women in this league in Kenya.
So why is it important to draw the line for Millionaires elite club members?
- The easiest part of the money and wealth equation is the earning side, the most difficult side is the one of retaining most of what you earn or make. Unfortunately, the majority of people never hack this one out. While they earn, some inherit…but lose it all in no time. Most of the poor people in old age were millionaires in their prime age;
- Looking not at what you earn but at what you retain is the sure way of focusing on the most important part of the money –wealth. Your wealth is what we call Networth –this is what is left after taking into account your costs and debts. This is what should always form your bottom line when analyzing your money achievements –not what is coming in;
- Keeping money while still enjoying your normal life is the true masterly of financial discipline –there can never be success with money without discipline. This does also not mean you deny yourself living a good life in the name of hoarding money. Financial discipline means making the best out of your life, enjoying it to the fullest, but still keeping enough to build intergenerational wealth;
- Retaining most of your money opens you to the mystic powers of compounding –if you keep as much money, then you are able to put it to good use and start working for you. Thus, over time, your earning power and streams of income increase. The true measure of financial freedom is the day you can wake up, do nothing or no work, and still earn your daily bread as you wish;
- Finally, keeping part of your money helps you overcome the curse of being broke. I have shared several times here before that money goes already where there is money. Nobody knows why, but when you are broke, money avoids you like a plague –but when you have some of it, it attracts more like a magnet!