How can I make one million dollars?

There are countless books, blog posts and videos that purport to reveal the secret to becoming rich. But if you dig a little deeper and ask successful people how they succeeded financially, the answers are almost always the same. The habits of millionaires aren’t much different than those of anyone else— They just take money much more seriously.

In fact, most self-made millionaires follow a set of guidelines known as the Financial Independence or Cash-Rich™ lifestyle. If you want to be rich, it might help to take note.

These principles were developed by self-made millionaires who discovered that once you have enough money saved and invest it wisely, there isn’t much need for a high-paying job or any other kind of job for that matter. If you’re ready to take control of your finances and start saving toward financial independence, here are some simple ways to do just that:

Live frugally

If you want to become rich, the first thing you should do is stop spending money on dumb stuff. It’s not easy to do, but it’s essential if you want to create and maintain a savings plan.

The best way to avoid frivolous spending is to track your finances regularly using a program like Quicken or Mint. You might also consider hiring a financial advisor to help you create a budget and find ways to cut unnecessary spending from your life.

Being frugal might not be as glamorous as living a life of luxury and taking lavish vacations, but it’s essential if you want to become financially independent.

Build up your nest egg

If you’re serious about becoming rich, you’ll need to save a significant portion of your income. The younger you start saving, the more time your money has to grow. A good rule of thumb is to save 10% of your income.

You should think of saving money as a long-term investment. It might be tempting to spend all of your savings on a giant TV or other short-term pleasure, but if you want to reach financial independence you’ll need to put most of your money into long-term investments like stocks and bonds.

Investing your savings lets your money grow at a rate that is higher than what a savings account would earn. If you start investing when you are young, you’ll have plenty of time for your investments to grow, which will help you reach financial independence much faster.

Pay off your debt

First, second and third mortgages are not a part of the Financial Independence or Cash-Rich lifestyle. Credit card debt is especially dangerous, as it usually carries exorbitant interest rates and can quickly spiral out of control.

If you have significant amounts of debt, your best course of action is to start putting as much money as you can toward repaying it as quickly as possible.

If you have a high-interest loan, such as a credit card or auto loan, it might be worthwhile to explore refinancing options. But if your debt is relatively low-interest, such as a mortgage, it’s better to put any extra money toward growing your savings to reach financial independence as quickly as possible.

Invest wisely

As a general rule, you want to invest your money in a diversified portfolio of stocks, bonds and other assets to minimize risk and maximize return. However, there is no magic formula for picking the best stocks or bonds.

Although there are plenty of investment advisors and financial planners who will promise to get you the best returns for a fee, the best way to pick your investments is to do your own research. Start with a basic investment book or read some investment blogs. Investing wisely can help you reach financial independence much faster.

Diversify your portfolio

A diversified portfolio isn’t just a list of investments. It’s a strategy designed to balance risk and reward by mixing various assets, such as stocks and bonds, and studying how they interact with each other. A good portfolio will contain a mix of assets that reacts differently to different economic conditions.

Investing in a well-diversified portfolio of stocks and bonds helps mitigate risk. If one part of your portfolio is doing poorly, others might be able to pick up the slack and help you avoid significant losses. When you diversify your portfolio, you’re lessening your risk and maximizing your reward.

The habits of millionaires aren’t much different than those of anyone else— They just take money much more seriously. If you want to be rich, it might help to take note. Start by living frugally, building up your nest egg, paying off your debt and investing wisely. That way, you can reach financial independence much faster.

If you follow these simple guidelines, you can reach financial independence and have the freedom to do whatever you want with your life. It might not happen overnight, but if you’re serious about it, you can make it happen.