Rachel Rodgers is a self-made millionaire who has created a comprehensive system to help others achieve financial independence and prosperity. In her book, “We Should All Be Millionaires,” Rodgers dispels common misconceptions about wealth-building and emphasizes the importance of taking control of one’s finances despite any initial fear or shame. Rodgers’ “Million Dollar System” is designed to guide individuals through a concrete, actionable plan to build and manage their wealth effectively. Below, we outline the five crucial steps Rodgers recommends for anyone looking to create their own path to becoming a millionaire.
1. Monitor Your Net Worth
This may be a sobering number at first, but knowing your net worth (total financial assets minus total financial liabilities) and tracking it frequently is important if you want to build wealth. Understanding your net worth is the foundation of personal finance management, as it provides a clear snapshot of your current financial situation. Even if you aren’t starting with much, checking your net worth consistently and understanding the basis for your net worth — especially your liabilities — will influence how you make your financial decisions.
Your net worth goes beyond your budget, and by tracking it, you will start to see how your decisions affect your bottom line. This process allows for better planning and more informed decision-making, helping to align your spending with your broader financial goals. By regularly updating this figure, you can measure progress, celebrate small victories, and adjust your strategies as needed. Ultimately, monitoring your net worth helps in setting realistic financial goals and maintaining the motivation needed to achieve them.
2. Understand Your Credit Score
Your credit score plays a crucial role in your financial life. A good credit score gives you more options for everything from credit cards and personal loans to apartment rentals to insurance. The better your credit, the more access to capital you have to start a business, buy a home, get a business loan, or apply for a credit card. The first step in improving your credit score is understanding what it is and how it is calculated. Take the initial step right now by going to a reputable website like freecreditreport.com to get the latest copy of your credit report. Signing up for a monthly credit monitoring account through Equifax or Experian can also be a valuable tool.
As Rodgers mentions, “What gets measured gets managed,” meaning the more you keep track of your credit and how your choices affect it, the more you will make better financial decisions. Regularly reviewing your credit report helps you understand the factors impacting your score, such as payment history, credit utilization, and account age. Being aware of your credit score allows you to take proactive steps to address any issues, such as disputing inaccuracies or paying down high balances, ultimately leading to improved financial health.
3. Explore Business Incorporation and Open a Business Bank Account
I have always heard this quote: “You will rarely get rich working for someone else.” While that doesn’t always have to be true, it is the case that the vast majority of millionaires are self-employed — including Rodgers. Taking the leap into entrepreneurship can be a game-changer for wealth-building. The first step toward starting a business of your own is to research creating a business entity and what business would be right for you. This exploration phase is crucial as it sets the groundwork for your business’s legal and operational structures.
A great way to test the waters is by starting a side hustle. I always say that everyone should have a side hustle for multiple streams of income. With incorporation and business income, you can open a free business checking account. There is nothing like a new business bank account to motivate you to grow your business. This creates a clear separation between your personal and business finances, making it easier to track business expenses, save on taxes, and protect personal assets. Having a dedicated business account also helps in building business credit, which can be beneficial for securing future financing.
4. Hire a Bookkeeper and Review Your Finances Daily
Create a habit of checking your bank account balances and recent transactions every morning. Developing this daily check-in can be essential for spotting potential issues before they grow into significant problems. See your spending and earnings in black and white to recognize patterns that can inform your financial decisions. Over time, this practice will help you refine your money management strategies and identify areas for improvement.
Consider incorporating a budgeting app for personal finances and bookkeeping software like QuickBooks for your small business. These tools can automate many aspects of financial management, freeing up your time to focus on growing your business. You may even want to hire a professional to help you keep track of your finances, especially if you manage a small business. A bookkeeper can provide expert insights and ensure accurate record-keeping, which is invaluable when making strategic business decisions or preparing for tax season. By staying on top of your finances daily, you maintain control and prevent small issues from escalating into larger financial setbacks.
5. Attend ‘Money Church’ Weekly
Rachel Rodgers, a self-made millionaire, has developed an all-encompassing system aimed at helping others reach financial independence and success. Her book, “We Should All Be Millionaires,” tackles and debunks common misunderstandings about building wealth while stressing the significance of gaining control over one’s finances, regardless of any initial hesitations or shame. Rodgers’ “Million Dollar System” offers a practical and actionable plan to guide individuals in effectively creating and managing their wealth. It’s a roadmap crafted to empower people with the knowledge and steps needed to become millionaires on their own terms. The system is broken down into five essential steps that Rodgers highly recommends for anyone determined to pave their way to financial prosperity. In essence, Rodgers’ approach is about shifting mindset, adopting sound financial habits, and taking definitive action to secure a wealthy future. Her aim is to make the journey to becoming a millionaire accessible and achievable for all.