For most people being a millionaire sounds like the life of the rich and famous. However, most millionaires are not famous, and they didn’t inherit their wealth. They didn’t win the lottery or make a six-figure income. So, what does a millionaire look like and how do you become one?
Following are some interesting facts from a recent study on millionaires by Ramsey Survey1:
- 93 % of millionaires said they got their wealth from hard work, not big salaries.
- 80% invested in their company’s 401k plan.
- 94% live on less than they make.
- 75% have never carried a credit card balance in their life.
- 85% make a list when grocery shopping and 93% use coupons.
By changing your mindset and focusing on key behaviors, becoming a millionaire is attainable.
What actions can you incorporate into your lifestyle that can make a difference? Following are some suggestions:
- Maximize your retirement contributions – check with your employer to see if they will match some or all your 401k contributions. Always contribute enough to max out your employer match. Don’t leave free money on the table! In addition, retirement contributions reduce your taxes. Be sure to contribute the maximum allowable for the biggest tax break.
- Implement a budget – having a budget gives you a sense of your spending habits. Remember millionaires always live below their means. A budget is one way to ensure you stay on track.
- Pay off your credit cards each month – using a credit card can have many benefits, but make sure to pay it off each month. Interest adds up fast and is a budget buster.
- Have cash reserves – life can be unpredictable. Set aside 3 to 4 months of living expenses. That way if you have an unplanned/emergency expense, you won’t rely on high interest credit cards to fill the gap.
- Diversify your investments – investing should be about diversification. Spread out your savings in stocks, bonds, real estate, notes, and other alternatives assets.
- Have life insurance – if you have loved ones who depend on your income, life insurance is critical if something happens to you.
- Have insurance to protect from liability – accidents happen. Auto, home and umbrella liability insurance is an important tool to avoid paying out of pocket for lawsuits
- Have a good tax preparer – minimizing income taxes can be important for maximizing overall wealth. A good tax preparer can help you minimize income taxes now and in the future.
The path to becoming a millionaire takes time, but with some discipline and incorporating good habits you can join the millionaire’s club.
1The National Study of Millionaires – Ramsey Survey 2018
Mario Hernandez has been a Certified Financial Planner (CFP) for over 30 years and brings a vast amount of experience in the financial planning and investment management business. Through Longevity Wealth Management, Mario provides holistic planning services that help clients find solutions to live their best life. Mario’s email address is mario@longevitywealthmanagement.com. Securities offered through Osaic Wealth, Inc. member FINRA/SIPC. Investment advisory services offered through Longevity Wealth Management. Osaic Wealth, Inc. is separately owned and other entities and/or marketing names, products or services referenced here are independent of Oasic. Certain insurance products are offered by Mario Hernandez as a licensed agent independent of Osaic Wealth, Inc.. Mario Hernandez is not affiliated with Osaic Wealth, Inc. or registered as a broker-dealer or investment advisor.
