Many of us dream of becoming a millionaire one day. When you think of that moment, what comes to mind?
Maybe it’s driving that sweet car or living in a mansion. Maybe you think you will never accumulate that amount of money because it takes a lot of luck to do so. Or, perhaps, you think of stashing your money in the safest place possible.
If any of these ring true, you might not be able to achieve this goal of becoming a millionaire. In fact, here are some traits that many millionaires possess:
They Live Below Their Means
Many millionaires live way below their means. Instead of living in huge homes and driving fancy cars, they do the complete opposite. Most of them became wealthy by being frugal so they continue to follow these habits throughout their lives. A great book that details this in more depth is The Millionaire Next Door. It is one of my favorite reads and changed the way I thought about wealth.
They Are In Control Of Their Lives
Most of us have the freedom to change our situation if we want to bad enough. If you don’t feel like you make enough, you can learn new skills and get a better paying job. We are currently in an election season. Some feel that a certain candidate will make their lives better. That is simply not the case. YOU and YOU alone are responsible for what you accomplish in life. I do realize that some are in better situations than others but, there are hundreds of rags-to-riches stories out there. Take control of your own life and don’t wait for someone else to make it better.
They Take Good Risks, Embrace Change and Work Hard
Making a change can be scary. If it were easy, everyone would have a great marriage, be healthy and have money. However, these things require hard work, risk and sometimes change. Instead of letting fear paralyze them, millionaires embrace these things.
I know many times we focus on only all the bad things that could happen. Whenever Tracy and I have made a drastic change and we are fearful, we ask ourselves the following:
What is the best thing that could happen? What is the worst thing that could happen? What is the most likely thing to happen?
The answers to these questions have helped us conquer the fears of moving to another country, leaving a profession after 14 years and publishing a book.
Becoming a millionaire is not easy. In fact, I may never make it there. But, applying the principles listed above, gives me a better chance at accomplishing this goal.
Why is it so difficult to follow a budget? Many of us have trouble with this. Every January one of the most popular New Year’s Resolutions continues to be “Spend less and save more” or something along those lines.
Why are budgets so difficult to follow? See if any of these resonate with you:
A Budget Constricts You
When creating a budget, we sometimes feel as if we will never be able to spend money and have fun anymore. A budget tells our money how to behave and controls it. Some of us don’t want to be controlled.
To combat this, add a little “blow” money to your budget. This money can be used to buy anything you like. This is very similar to giving yourself a cheat day when dieting. You don’t have to deny yourself forever.
You Let Your Emotions Take Over
This one rings true for many. When we create a budget, we are using simple math to come up with the figures. The math is not what gets most of us into trouble – it is behavior! Many times we buy stuff based on how it will make us feel.
This reason is why the budget is so important. Every dollar will have a name and you will know exactly what it is being spent on before your emotions get involved.
You Don’t Consider The True Cost Of Your Purchases
Many of us buy an item without considering how much work went into purchasing it. For instance, let’s say you want a new car. We will say the monthly payment is $500. If you earn $15 an hour after taxes, you will have to work over 33 hours each month to pay for this. That is almost one week every month for this car!
Thinking about the time value of money can often lead us to reconsider our purchases.
You Have Never Had To Follow A Budget
I have met with individuals who have no budget (or savings) in place. They make enough each month to pay their bills and have a little left over to spend as they see fit. This is flirting with disaster. Yes, they may be fine right now but someday, something is going to go awry. The car will break down, the house will need a repair or perhaps they will lose their job. In addition, they will want to retire and stop working one day.
A budget tells your money where to go. This way you can add money to your savings and retirement accounts and be prepared for those emergencies and your Golden Years.
There are three important ways a savings account can help you. In this post we are going to discuss the first one - emergencies.
I know some people say they just have bad luck and something always seems to go wrong. The truth is, luck really has nothing to do with it. If you live in a house long enough, something will break. If you drive a car long enough, something will need to be repaired. If you have kids, they will break something – either an object or a body part. It is called life.
No one expects something bad to happen but sometimes life throws us a curveball. I was reminded of this recently. We were enjoying one of those picture-perfect fall family days. We decided to get some frozen yogurt. While we were enjoying our treats, our girls started doing gymnastics. Out of the blue, Ava slipped and broke her arm! We had to rush her to the local emergency room, and they had to put a cast on it. Even though we have good health insurance, we still had to pay a $150 co-pay for this ER visit. I definitely wasn’t planning on this expense, but it was not a big deal since we had an emergency fund. It was such an emotional day (all parents know what I’m talking about when you can’t make your baby feel better), and I am so glad we were able to solely focus on Ava and not stress about the bill.
I know many of us feel like there are never enough hours in the day to get everything done. Since we are so busy, we eat lunch out. In fact, according to a survey conducted by Visa, Americans spend about $20/week getting lunch in restaurants. While this does not sound like much, it can really add up.
How much would this be worth if you had invested this amount ($80/month) for 30 years and it averaged 8% growth per year? If you guessed $119,000 you are correct. Yes, you read that correctly. You could literally be eating $119,000!
Instead of eating lunch out, cook a little extra at dinner so you have leftovers. You could also pack a peanut butter and jelly sandwich. I know it does not sound very exciting but adding over $100,000 to my retirement account beats any restaurant meal for me.