When starting out in life, not all of us receive a “small loan” of a million dollars from our parents. However, we all want to be millionaires but just how many people actually get there? More importantly how do they do it and what can you learn from their experience to increase your bank roll. Most Americans believe that roughly 15 percent of households hold millionaire status, but in reality, it’s more like five percent. Following is a recipe for success in your personal quest for wealth.
Similar to any great recipe, you start with the ingredients. Every pantry has its basic, staple ingredients (flour, milk, eggs and butter) just like every person looking to increase their wealth. These basic staples include: ambition, the “millionaire mindset” and critical thinking skills. In regards to ambition, many people have the drive and many others have the vision to be a millionaire, but the magic happens when you combine your unique vision with your indomitable drive. The “millionaire mindset” is nothing short of being frugal. You want to be the person known as the “penny pincher.” The one that always finds the best deals. All our lives we are told to think outside of the box. Thinking differently along with always learning and seeking knowledge will set you apart from the average joe. After you acquire these ingredients, you must find that combination to get the skills working for you.
1. You need to set a goal. Not just any goal will do, you need a SMART goal, one that is Specific, Measurable, Attainable, Relevant and Timely. Your objectives and goals guide your vision. They set you on the right path. They give you a plan that allows for evaluation and feedback.
2. After you have a solid plan to work from, you need to do your best to make good choices. This means three things: do not be wasteful, think before you spend and stick to a budget. The best way to avoid wasteful spending is to repurpose. Think about new ways to use old items and “make do” with what you have. Before every purchase you should ask yourself three questions: Sticking to a set budget is harder than it sounds. When setting your budget, you should plan for extra spending, fun and entertainment. Keeping track of all spending and not forgetting that you have goals and a budget in place will all help. For more tips and tricks to help with your budget visit Lifehack.
3. Strategize, strategize, strategize. After you have set the goals and developed a plan, you need the tactics that ensure success. Most millionaires have an average of seven income streams. They harvest this cash flow by investing, saving for a rainy day and living below their means. Investing can be intimidating, but it’s well worth it. Investing and diversifying your portfolio are life changing decisions and should be handled appropriately. You can find some great starter advice from Money Under 30, but I recommend speaking to a financial advisor. Saving is an important aspect in money management. “Stuff” happens and having a nest egg for those pesky emergencies and major expenses like education, homes, cars and retirement gets you one step closer to millionaire status.
1. Do I need it? 2. Can I borrow it? 3. Can I find it cheaper somewhere else?