Why Millionaires Are Millionaires.
Updated: May 5
Although many individuals truly believe that there is some magical investment strategy unbeknownst to the middle and lower class, this is not the case. Millionaires are millionaires and prevail to stay at such a state because of their habits. Not all millionaires contain the same exact habits, but there are a few common habits that these millionaires possess that took them to where they are today.
Common Habit Among Millionaires
1. Avoid Bad Debt
I am not saying that millionaires do not have debt. Yes, millionaires might still have a loan on their home or maybe even their car; however, these individuals utilize debt to their advantage in order to make better investments or to more easily shuffle money around. Of course, millionaires might have credit cards, but they commonly do not hold a running balance because of the interest they would have to pay.
2. Write A Budget
A budget is not only for people who cannot handle their money well. Actually, millionaires are the most common people to employ a budget into their financial plan. Although millionaires might be able to spend more than a lower-class citizen, they still make certain of where their money is going and decide to spend it properly.
3. Create Income Streams & Invest Wisely
Although this is a common cliche for how millionaires become millionaires, it in its most simple essence is true. From their regular earned income all of the way down to capital gains income, dividend income, and rental property income, millionaires begin to create these income streams. The reason millionaires work towards creating these income streams is because they understand and desire to retire one day. Millionaires build these income streams so their investments will pay for their retirement spending.
4. They Don't Act Rich
Although this might not always be true, it still prevails as a common trait among millionaires. Because most millionaires budget to create income streams, they do not focus on acting extremely rich or on impressing their friends. Do not get me wrong, many millionaires to spend a good amount of money; however, it is commonly their investments that pay for these luxuries.
Where To Go From Here
Millionaires are not millionaires because of some secret investment strategy. Yes, some millionaires might be millionaires because of their parent’s inheritance or various other reasons, but most millionaires are self-made because of the habits they possess. So where do we go from here? What do you need to do to become a millionaire? Well, simply follow and adopt these habits into your life and you will start to reap the benefits each has to offer.
Disclaimer: I am not a financial advisor, so please review all of this advice with your CFP or financial advisor first.