If you’ve read my work for a little while you know I’m obsessed with Oprah Winfrey for a couple of reasons. First, she’s constantly inspiring people from all walks of life to rise up and do better for themselves and their communities; second, she got to where she is — a self-made billionaire — via hard work and having a plan, despite the odds stacked against her from childhood; and third, she changed my life completely after I was on her rags-to-riches show in 2001. The episode was called Ordinary People Extraordinary Wealth.
After studying her, and other self-made millionaires for over 15 years, there are distinctive actions and behaviours that help these people get ahead financially and be happier. There’s nothing magical about what they are doing.
The great news is you can take the same steps, and experience improved finances and reduced stress, even if you’re starting from a not-so-great financial situation.
I call these seven steps The Wealth Builder’s Roadmap.
Step 1: Take an inventory of what you own and owe money on
This will help you establish a starting point. (Don’t judge yourself here! Growing your money takes time.) When you subtract your debts (owe) from your assets (own), your net worth will appear. This is the number you’ll want to make progress on, even by just a few dollars every week. Growth happens when your debts shrink and/or assets grow … not with consumer purchases, so try to minimize those.
Step 2: Adopt a winning mindset
The reason Oprah was able to rise up is she believed in herself. Stop negative self-talk. Know that wealth comes to those who want to work at it and believe they are worthy of a new financial story.
Step 3: Find a reason to grow your wealth
This is almost NEVER about money itself. What else is driving you to want financial freedom? Is it to have more time with your family? Or perhaps to create better options for your future career? I like to call this my financial “why” and it underpins everything I do when it comes to money. Your financial “why” will also be the force that stops you from impulse spending or forgetting to balance your budget. It will drive you to prioritize what’s most important to you in your spending and investing.
Step 4: Make a list of financial goals
Don’t write down too many. To make progress, you need to focus on just one or two areas of your finances (hint: these goals are most commonly about debt and saving — which you can see in Step 1, is the key ingredient in making progress.). For example, you may choose to make it your goal to save just $ 10 more per week, or to pay an extra $ 300 per month on your home-equity line of credit. It’s OK for goals to shift, but do give each one enough time to stand a chance of succeeding.
Step 5: Track where your money is going for 30 days
This will give you the aha moments and the motivation you need to make true financial progress. It’s going to reveal precisely where your money is going, and once you know that, you can decide if changes to your spending habits are necessary.
Pro tip — your money goes where your priorities are, which is why narrowing to just one or two goals will actually enable you to make progress.
Step 6: Schedule a daily reminder to do two things …
First, save a little bit of money each day (an e-transfer — and it can be a small amount — into a savings account). Daily saving will also help curb overspending by forming a new and healthy habit.
Second, express gratitude for something financial in your life, even if it’s hard! Gratitude is core to the mindset responsible for supporting new healthy financial habits (see Step 2). So, if you’re feeling in a mindset rut, express financial gratitude for what you do have, rather than focusing on what you’re lacking. It can help to get outside and take a walk in the beautiful spring air while you’re practising your gratitude.
Step 7: Mark your progress each week
How much did you save? What did you spend? Did you pay off some debt? What gets measured, gets done! Celebrate your wins.
All wealth builders including Oprah centre themselves on the concept of progress, not perfection. You’re not going to be a rock star at money right away. It takes consistently doing the right activities (these seven steps) and nurturing your growth mindset.