Think like a millionaire .According to Nancy Butler, a Certified Financial Planner, “If you look at the average amount of money you will earn over your lifetime, and figure out how many years you are working—most people earn more than a million dollars over their working life but very few people become millionaires. How they manage what goes through their fingers usually makes the difference.”
In today’s hustle and bustle world, costs incurred due to unplanned expenditure. Whether its children, health or unexpected home renovations, all these unexpected costs accumulate and more often than not severely halt our millionaire aspirations.
You could help yourself along the road to prosperity by implementing a few small good habits when it comes to your daily finances:
By setting a goal you will improve your focus and motivation. By doing so you will set out and create a very real and measurable plan.
Financial experts advise incorporating a 5-year plan to outline our specific money goals and the steps needed to achieve those goals.
An example would be to save up to six months of income over the five years. This fund could pay for an emergency, a home renovation in cash and thereby not having to pay interest. It could even end up being a down payment on a house.
A five-year plan is a good way to plan ahead and gives a realistic overview of exactly how much saving is needed to achieve that goal within the specific time frame.
Employ financial ‘rules’
Creating financial ‘rules’ is a great money-saving habit to include in any lifestyle and expenditure routine. These rules are created to curb purchases of items that might not be essential in our lives.
By simply tweaking a few spending habits, like setting a limit on how much you will spend on certain items, or cutting back on the number of times you frequent a restaurant per week.
Behavioral economists believe that practicing good financial rules can aid us in simplifying the many purchasing choices we have to make on a daily basis.
Reverse your Thinking
Common thought dictates that once our paycheck has arrived, we spend our money to pay our bills and settle debts and then save the rest. Planners, however, feel that we have it all ‘backwards’ and that we need a change of mindset. They believe we should be saving for our financial goals first, then pay bills and then consider spending the money left over.
Contrary to popular belief, most millionaires don’t spend more money than they need to, and most live well below their means. They are in fact saving instead of spending. The key here is to find a point in expenditure where you can acquire exactly what you need to live comfortably, and then just ‘stay there’. Don’t spend more than what is essentially required and save or invest the rest.
Think about retirement
One of the biggest mistakes that people make these days, is not tackling retirement early and leaving it as a last priority.
It is understandable as most people in their twenties and thirties are making wedding, home and car payments. This is another case where we have things ‘backwards’ as the later we start saving, the more we have to save, whereas the sooner we save for retirement, the more time we have for it to compound and grow. If our money has less time to grow then it minimizes the impact of compound interest it may generate.
Get Out of Debt
Paying interest is a killer. Getting out of bad debt such as credit card debt, which incurs huge monthly interest rates should be priority number one.
Everyone builds up debt at one point in their lives but as soon as debt starts hiking up those rates it becomes negative debt and will hinder your ability to save.
Have more than one income
The more we earn the larger our lifestyle expenses become. Therefore, as a rule, you need to save what you can and invest the rest.
There’s only two ways to increase your net worth. One is to spend less and two is to save more.
Aside from winning the next big international lottery, there are a few ways to get more money flowing in.
you could get a second job or part-time employment doing something that you love. Maybe even a hobby that can generate income.
Another way is to look for good investment opportunities like property for example.
Don’t fear failure
The most successful people are risk-takers. They had a dream and took action.
Many have made numerous mistakes, but they didn’t give up. Instead, they looked at each mistake and learnt from it.
“Successful people hit a wall and keep hitting it until they blow right through it.”
You need to do the same.
Remember, the more you do, the less you’ll have to fear from failure – and the less it’ll hold you back.
Spend time with millionaires
Did you know that you are the sum of the five people you spend the most time with? Think about that.
“If you look at the people in your circle and don’t get inspired, then you don’t have a circle. You have a cage.”
If you want to become a millionaire, you need to find one to spend time with. Before you know it, you’ll find five!
Watch what they do and emulate their habits. If you’re perceptive, you will learn more this way than you ever would in a few years at business school.
Think like a millionaire and make big changes in your life.