3 Habits of Millionaires You Should Adopt
We’ve all seen the lists that come out every year naming the wealthiest people in the world and the country. The billionaires and millionaires, individuals whose net worth are in the millions and billions not the people who simply make millions (yes there is a big difference). People who build wealth tend to be focused. They keep their eyes on the prize and most think big and outside the box. These traits combined with some other key habits are exhibited by millionaires and are the reasons they have and keep their millions. Here are some concrete habits you should adopt.
Habit #1: Millionaires are frugal.
When people think of the word frugal most go straight to the concept of being miserly, instead of careful with money or not wasteful. Usually a frugal person is considered to be a cheap person who tries to skimp on everything. However, let’s turn that on its head. Millionaires are some of the most frugal people. You may immediately think, yeah sure they are…that $500,000 car and multi-million dollar home is really frugal. But it’s true, millionaires are frugal. For example, I watched an interview where Warren Buffet, the second wealthiest person in America at a net worth of $58.5 billion, said he’s had the same wallet for twenty years! Twenty years! If anyone can afford a new wallet then Warren Buffet can right. However, it’s not just about the fact that he could afford it. He spends on what he truly enjoys and is frugal about everything else. That’s the true luxury in frugal living (the motto you see blasted on this site). Spend as extravagantly as you want on the things that you love and be frugal with the things that are not as important to you. Sure, millionaires have very expensive items and toys but they made sure to have the income or assets to pay for those toys before they purchased them. No credit used. No debt incurred.
Habit #2: Millionaires keep it slow and steady.
You don’t see millionaires trying “get rich quick schemes.” There are proven methods to build wealth and increase your net worth and they aren’t quick or overnight, with the exclusion of inheritance or winning the lottery. The term is “build wealth” for a reason, you must build it. You will need to use long-term money solutions such as a 401(k) and investments outside of retirement accounts to build wealth. Continuously contribute to retirement accounts to reach your nest egg goal; yes you should know how much you will need, the exact dollar amount. You have to know what the prize is to keep your eyes on it. Investing takes time to see steady gains. The average return on investment in today’s market hovers between 9-10%. I would need to write several articles to explain details about investing, but basically you need to leave the money in the market for years to see such returns.
Habit #3: Millionaires buy assets not liabilities.
When you get your paycheck and you make a list of the things that you’re going to buy, what is on that list? Is every item a liability, something that you will spend money on that doesn’t make you any money? If yes, then you’re falling into the cycle that many of us do. We use all of our income to purchase liabilities and don’t spend any money on purchasing assets. Assets are things that bring in money without you putting additional money, time and energy. Millionaires work on continually acquiring assets or investments that can bring in money. Create a plan on how and when you’ll purchase more income generating assets.
Pair your determination, focus, and knowledge with these habits so you too can start building wealth and raising your net worth. You can do it.
I would love to hear from you. Leave your comments below and reach us on Facebook and Twitter. Photo credit: Don
