There are three things that you can do with your money. You can save it. You can spend it or you can invest it. How well you do these things may determine whether you will be in the group of 7% of Americans that are millionaires.
Many years ago, people would have considered that being a millionaire would be the ultimate in luxury and wealth. Now, for some people, being a millionaire is not even considered enough to do much. Warren Buffet made his first million dollars when he was just 31 years-old. That amount of money is .002% of his current wealth. With rising billionaires like 26 year-old Mark Zuckerberg, founder of Facebook, there seems to be more money to be made than at any other time in recent history.
When you study what unique strategies millionaires use, you may get some ideas to improve your own circumstances. Whether you make $30,000 a year or $1,000,000 a year, improving your skills can help you on the road to becoming more financially secure. Maybe you’ll never be a millionaire or don’t even want to be. You still will need to make strategic financial decisions that will affect how much you enjoy your future life. If you could see your distant future life as well as you can see your life next week, you may decide to live life differently.
Let’s take a look at what millionaires say they do and how they got there.
Paul Lim, a writer for Money magazine, reported some interesting facts from a poll of millionaires. In his article, Millionaires in the Making, he shares with us the answers.
How did you get to be a millionaire?
95% said hard work, 83% investing wisely, 81% by being frugal and 41% by luck.
Do you feel wealthy?
42% said no.
What preparation did they have?
90% are college graduates, 5% have law degrees, 3% went to medical school.
What is the average amount annually invested?
$39,300.
What seems to be the number one thing that millionaires did to get where they are is a lot of hard work. All of us are capable of doing that. We can all become more frugal about what we spend our money on and although we are not all lucky, we can learn to invest wisely.
Did you notice that quite a few people said that even though they were millionaires, they did not feel wealthy? Feeling wealthy is probably one of the things we do have control of. Since your perspective on life can run the gamut of outright depressing thoughts to unrealistic elation, you choose where in that range you want to be. Of course, when the joys of seeing more money coming in and how nice it makes your life, it is easier to think about bigger income numbers than you have thought of before. If you can’t imagine the larger numbers in your income, will you ever improve your standard of living?
Another thing that millionaires do is to habitually save money to invest. The average amount per year that they invest is $39K. If your income level is not even that high, you can work on saving in percentages. Make it a goal to save a certain percentage of money every month. Financial experts advise you to have enough cash to pay your bills for at least six months. Whatever percentage you decide on the important thing is to follow through with your plan each month. Automate that savings if possible.
Some millionaires have also made a practice of living below their means. This falls into the category of budgeting and anyone can follow a budget. You just need to include your savings plan in your budget. It is one thing to have a million dollars sitting in your bank account, but it’s another thing to learn how to best use it.
Millionaires did not become millionaires by working for someone else. Many have started their own businesses. Anyone can start their own business for very little money and if you have a low overhead in your business plan, you can actually accomplish this while working for someone else. Did you know that only 12% of American households own their own business? Paul Lim, reported that the median income for business owners was $497,000 compared to $42,000 for non business owners. Would it be worth your time and effort to start your own business? When you can harness the power of entrepreneurial thoughts and put into action a good business plan, you are on your way to a brighter future.
Realistically speaking there are few people that reach the status of being a millionaire. Learning key money management skills and business building skills can only help you increase your productivity and increase your income. Start today to create a better outlook on life. Do what you can to take your first steps to a new life.
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