Are you a millionaire? A millionaire is not necessarily someone who has a million dollars in the bank. The million dollars is calculated by your net worth. Your net worth is calculated by subtracting your liabilities from your assets.

First, add up all of your assets. These will include the value of your home, cash, savings accounts, brokerage accounts, bonds, mutual funds, retirement accounts, etc. Then add up all your liabilities which include credit card debt, what you owe on your mortgage, student loans, auto loans, and any other money you owe. Subtract your liabilities from your assets and you get your net worth.

Now do you have a million dollars? Probably not. If you have a negative net worth, you are in an even worse situation. You are also probably somewhat jealous of those who are millionaires. You picture them as people who are doctors, lawyers, and CEOs that make hundreds of thousands of dollars a year. They have multimillion dollar houses, they fly first class several times a year to expensive vacation destinations. They drive fancy cars and go to all the fancy expensive restaurants everyday.

You don’t have to make a hundred thousands dollars or more a year in order to be a millionaire. Many people that make that much aren’t millionaires because they spend it all every year. Even if you make a million dollars a year but spend a million dollars a year, you won’t be a millionaire. You can be a millionaire even if you make less than 6 figures.

In order to be a millionaire, it takes discipline, creativity, drive, and little bit of common sense. You have to be disciplined enough to save and invest your money. If you can only save $100 a year, even if you have 40 years to earn your first million, it’s unlikely you will unless you get VERY lucky in the stock market. You need to be disciplined enough to pass on going out to dinner every once and a while and to buy a cheaper car.

You need to be creative in that you learn to find other ways to earn money. Making a million dollars could take 30, 40, or 50 years, or it could take much less if you make more money. Yes, it is possible to earn a million dollars on a $40,000 a year salary, but it’s going to take a lot more time and a lot more discipline to save as much of it as you can. If you can create multiple streams of income for yourself, you will have much less you will need to save.

You need to have self-discipline to stick with your goals if you ever want to reach millionaire status and security. If you saved up $50,000 in 4 years, it would mean nothing if you went ahead and spend it all at once with nothing to show for it. You have to really want it enough to stick with your plan.

You also need common sense if you want to reach your millionaire goal. If you start spending your savings on other things, of course you will never reach your goal. If you work at McDonald’s for the rest of your life, it’s common sense that it’s going to be much harder if not impossible tor each your goals. You can be a millionaire if you want it enough to work for it.