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There are millions of millionaires across the country.
How do they do it?
Just imagine when you can say, “I’m worth a million bucks!”
Pssst! It’s about habits!
Most millionaires have the same habits. Habits that work. As you read about these habits, they can become your habits. Don’t try to make all of these habits part of your life right away. That’s not realistic or fun.
I put together these habits to show how average people, living in average neighborhoods, have created and built financial freedom. Many of these habits are simple, actionable habits that have been proven to develop wealth. Design your strategy to live with these habits and you may be able to retire early too.
Over time, make these habits part of your life. To start, pick one. Learn it and apply it. Master it. Then learn another. Learning and adopting these habits is a journey that takes time. Slow and steady.
The turtle wins and makes a million dollars!
1. Pay Yourself First
People who build wealth, save first and plan their spending second. Paying yourself first means saving before you do anything else. Put aside a certain portion of your income the day you get paid before you spend any. Most people wait and only save what’s left over—that’s paying yourself last.
The goal of paying yourself first is to help make sure your future self’s key financial goals are covered, including building up an emergency fund, contributing to retirement saving, or putting together a down payment on a new home.
It’s not how much money you make, but how much money you keep, how hard it works for you, and how many generations you keep it for. – Robert Kiyosaki, American businessman
2. Invest Slowly and Regularly Over Time
People who build wealth start young and maintain strict long-term discipline. Automate your savings. Log in to your checking account and set up recurring transfers to your savings account. Arrange for the transfers to occur shortly after payday so the money comes off the top of each paycheck. This will help you budget your spending and avoid overdrafts.
The average age among millionaires is 62; suggesting most have built up their nest eggs over a lifetime. Start young. Recognize that 10, 20, 30 years will pass. Wealthy people maintain strict long-term discipline in saving and investing. They know themselves and understand building wealth takes many years of saving slowly and regularly.
Investing should be more like watching paint dry or watching grass grow. If you want excitement, take $800 and go to Las Vegas. – Paul Samuelson, American economist
3. Save and Invest At Every Opportunity
Millionaires start saving early to maximize interest. They max out an employer’s match on their 401(k), 403(b), or other defined contribution retirement plan. They open a Roth IRA to begin tax-exempt savings. They add annual pay raises to savings.
Successful investors know markets will go up and down. Long-term wealth builders put their money with well known, established, trusted companies. They are comfortable living with uncertainty. To get higher returns, you must be able to occasionally endure significant losses. Smart savers avoid “get rich quick” schemes.
I will tell you how to become rich. Close the doors. Be fearful when others are greedy. Be greedy when others are fearful. – Warren Buffett, Investor
4. Read and Seek Out The Knowledge From Others
Almost 90% of millionaires read 30 minutes or more each day for education or career reasons. Many read a minimum of two books a month, and listen to audiobooks or podcasts while they are commuting to work, exercising or working in their backyards.
Millionaires learn about personal finance in order to make wise decisions. It isn’t rocket science or voodoo. They learn the basics of financial market history. They know the difference between a stock and a bond. People with money spend time managing their finances. Prosperous individuals challenge and question themselves. Creating wealth is about critical thinking.
An investment in knowledge pays the best interest. – Benjamin Franklin, Inventor
5. Spend Less. Save More.
You don’t need an MBA to accumulate wealth. Millionaires spend less than they earn by having spending limits. Know the difference between “needs” and “wants. Over 60% of millionaires shop at Amazon. They shop for bargains and always negotiate for a better deal.
Keep your money—SAVE IT! To save money, most millionaires live in average houses in average neighborhoods. Save for your long-term goals before you spend money on, say, a movie with friends. Resolve that you will save and invest at least 10–15% of your income.
A budget tells us what we can’t afford, but it doesn’t keep us from buying it. – William Feather, American author
6. Have a Spending Plan
Millionaires make purchasing decisions based on their current financial status and their goals. They maintain and follow a spending plan. Millionaires do a lot of investigating before they buy things to get the best prices and avoid impulse buys. Focus on some single goal every day that can reduce spending now or in the future.
The key is to identify the system (or mind trick) that you’re most likely to stick with—and then do it. Make budgeting a game by giving yourself an interesting new challenge every week. See how little you can spend on groceries, or even skip food shopping one week. Invent meals using what you already have in the cupboards.
Beware of little expenses. A small leak will sink a great ship. – Ben Franklin, Inventor
7. Build Wealth, Not Status
The most common millionaire vehicle is a Ford F–150 truck. Shop where ordinary people shop. Shop at big box stores like: Home Depot, Costco, Best Buy, Lowe’s, and Target. Live in an average neighborhood in an average house. Millionaires buy used to get better value They buy used cars, at least 2–3 years old, avoiding the big depreciation hit.
The only reason to save money is to invest it. Put your saved money into secured, sacred (untouchable) accounts. Never use these accounts for anything, not even an emergency.
Wealth consists not in having great possessions, but in having few wants. – Epictetus, Greek philosopher
8. Focus on the Future
Start with a goal. GET EXCITED ABOUT YOUR NEW GOAL! Create a plan to achieve the goal. Take actions that work towards reaching your goals in the plan. Most of the wealthy maintain a to-do list, are committed to growing their wealth, make daily decisions to show their commitment. And possess patience to build for the long-term.
They are developing new skills for future use or reinforcing existing skills. Nearly the same number of millionaires network 5 hours or more each month. Networking is important for building new business relationships and for maintaining existing relationships.
Invest in yourself. Your career is the engine of your wealth. – Paul Clitheroe, Financial Analyst
9. Eat Healthy and Exercise
The majority of millionaires with good financial health also strive for good physical and mental health. More than 75% of wealthy individuals exercise aerobically 4 days a week. Your health is VERY IMPORTANT. Make time in your day – every day – to get some exercise. Make it a habit and it gets easier. When it becomes a habit you barely think about it; you just do it. You DO have the time, just make the commitment.
Give your brain and your body the nutrients necessary to be successful. Feed your brain right to start the day, and continually throughout the day, and you’ll avoid those midday crashes. Most wealthy people eat fewer than 300 empty calories a day. Eat healthy carbohydrates, low-fat proteins, avoid sugary drinks, and limit your consumption of processed foods.
It has been my observation that most people get ahead during the time that others waste. – Henry Ford, founder of Ford Motor Company
10. Give To Charity
In order to get you must give. Plan your giving. Automate donations to make them timely, regular, and predictable. The wealthy donate to charities they are passionate about.
Millionaires make a habit out of giving their time, money and expertise. Fully 89 percent of millionaires gave their time to charities or non-profit groups, as well as their money, with more than half of the millionaires giving more than 100 hours of their time per year. The wealthy give most when they can be personally involved in philanthropy.
If you can’t feed a hundred people, then feed just one. – Mother Teresa
11. Avoid Bad Debt
Bad debt is debt that you take on to buy things that you don’t necessarily need, but rather that you want — and can’t really afford. Millionaires avoid bad debt like the plague. Millionaires don’t like being in debt at all, even on a small level. They are debt-averse. A millionaire will pay cash for a used item, versus using credit to buy the same item new.
They pay as they go and don’t run up credit card debt. Avoid car loans and car leases. When a car loan is necessary, millionaires shop around for the best car loan interest rate. They buy modest homes in everyday neighborhoods. They shop around for the best mortgage rate and terms. Build an emergency fund, and then begin paying off debt.
Home life ceases to be free and beautiful as soon as it is founded on borrowing and debt. – Henrik Ibsen, Father of Realism
How You Can Get Started
These habits are realistic and doable. Millions of people have gone before you and made these habits a regular, sustainable part of their lives. You can do this too!
Pick a habit you can easily start now. Stay focused. Write down your progress. Send me an email and let me know how you’re doing or what questions I can answer for you to help you become a millionaire. firstname.lastname@example.org