We all start our careers with role models like Warren Buffet, Mark Zuckerberg, or Steve Jobs in mind. We grew up listening to their stories and how they set off with an idea and created these big empires with their resilience and no inheritance.
Self-made billionaires and millionaires start from scratch without any inheritance or trust funds to bank on. Everybody wants to be a millionaire and then lead themselves up to the elite billionaire club.
According to the reports, there are 22 million millionaires in the USA, and a higher percentage are self-made millionaires. So, what exactly these newly rich are doing right that we can adopt in our lives to become millionaires like them?
Here is the list of all the financial strategies or money habits that nearly all self-made millionaires have in common that aided them in manifesting their dreams. We have created this list by reading various books, blogs, and interviews of experts who work with self-made millionaires and deal with their finances.
So, self-made millionaires have the following money or financial habits that you can follow.
Self-Made Millionaires Spend Wisely
There is always something new hitting the market, perhaps a new iPhone or a new car. Generally, we do not need an upgrade, but we do it by getting influenced by others around us, thanks to consumerism. These upgrades waste your money on things you do not need in life.
One thing evident about self-made millionaires is that they fight the urge to waste their money on unnecessary expenses. It is simply a waste of money to spend on a new gadget, branded clothing, or even new cars beyond your means. The money unnecessarily wasted could be saved or invested for the future.
Self-made millionaires formulate a budget and stick to their budget for the bigger future. These people are money-wise and do not splurge their money on unnecessary materialistic pursuits.
They Look for Other Income Streams or Side Hustles
According to experts, one thing consistent with almost all self-made rich people is that they try to make income from other means instead of banking on one source only. They can do overtime for more income. Similarly, these newly rich people also work on side hustles like providing freelancing services in their free time to multiply their income streams.
Additionally, they invest in multiple options like stocks, real estate, foreign currencies, bonds, rental opportunities, and even crypto-currencies. The point is to create multiple income streams.
Self-Made Millionaires Save and Invest Their Money
Self-made millionaires invest in good investment plans to maximize their wealth. According to the experts, one trait consistent in nearly all self-made millionaires is that they prefer saving their money for future investments. A rule of thumb is that you should save 20% of your income each month.
Thomas C. Corley, in his book, gave a compelling notion of “bucket savings. According to him, self-made millionaires save their money on four buckets; retirement savings, specific expenses (house, education, etc), emergency funds, and cyclical expenses (vacations, birthdays, etc).
To save more, you have to make lifestyle sacrifices in the short term to create the life you want in the future. The more you save, the more you can invest in different options for more returns.
Likewise, self-made millionaires invest in multiple options — from stock, bonds, and real estate to cryptocurrencies to mitigate the risk and diversify their portfolios. Rental opportunities are also in their mind. You do not have to have multiple properties to create rental opportunities. For example, you can rent your car or one room to have a steady passive rental income.
They Avoid Debts and Keep Spare Money
Avoiding debts as much as possible is one of the traits found in self-made millionaires. Outside mortgages, the newly rich avoid taking unnecessary debts or eliminate them as much as possible. Such people even pay off their credit card debt in time to evade high-interest payments.
Similarly, self-made millionaires always keep extra cash for rainy days like a medical emergency or car repair. The idea is to use this money for emergencies instead of resorting to personal loans or credit cards to prevent high-interest payments.
Other Money Habits
- Self-made millionaires strive for tax savings.
- They have the bigger picture, long-term goals in mind than short-term goals.
- They want to gain financial independence early to retire early to pursue their dreams.
- Self-made millionaires all share one trait — they never shy from taking advice from people on how to save and invest their money.
- Going to a financial advisor is something common in these newly rich people to help them navigate the right decisions related to their finances.
- Similarly, self-made millionaires keep an eye on the latest financial market trends and situations.
- Lastly, they devise their financial plans and stick to them religiously for longer.
It is essential to have a steady job, but what you do with this income is crucial. It is the right time to hire a financial advisor or anyone with the expertise to devise a financial plan to help you achieve your goals.
Hopefully, in 2023, you emerge as a self-made millionaire by employing all these strategies that made many people self-made millionaires without any inheritance or family wealth.