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.
About the author: Maria James has a compassion for people that makes her involvement in Heal a Woman to Heal a Nation a sure fit. She is a biomedical scientist who is public health conscience and has always worked for the betterment of others. Maria is the founder of Pocket of Money, LLC which provides tools and tips to help you take control of your money and live your best life.
