10 Surprising Secrets Of Millionaires
Here are ten secrets that “rich” people have in common:
1. Job Stability: Contrary to popular belief, there are many millionaires out there that weren’t handed a trust fund, nor did they make a million dollars overnight during the internet/property/other boom. They are people who stayed with one employer for a very long time – sometimes 30 or 40 years. Staying with the same company for many years can offer big rewards, including a very nice final year’s salary, and significant Pension benefits. While it seems strange to think about working for the same employer for two decades or longer these days, there are still a number of people who do it, including teachers and other government workers.
2. Steady Savers: The majority of rich retirees began making the maximum contribution to their Pensions in their early 20s. Remember, the first dollars you put into your Pension can be matched by your employer, which is free money for you. Be sure to check with your human resources (HR) department to find how much you need to contribute to receive the match (if available).
3. Save The Raise: One of the great moments in all of our careers is the day we’re told we’re getting a raise. While it would be so easy to go out and spend that extra money on a new car or holiday, one strategy I’ve seen these people use is saving at least half of their pay rises. Those dollars can end up in retirement or other investment accounts, compounding, to give you more money later.
4. Investors: Millionaires who own stocks tend to hold their investments for decades (not just years). They let their dividends re-invest over time and thus participate in the long-term growth of an economy. This makes them different from “savers,” who only invest in cash deposit accounts or money markets.
5. Not Afraid To Ask For Advice: Most millionaires aren’t do-it-yourself (DIY) investors. They know what their strengths are, and if their strengths don’t lie in investing and financial planning, they leave it up to the experts. So go and hire an Independent Financial Adviser!
6. Pay Off The Mortgage: One key “rich” person thing to do – and a characteristic of the happiest retirees – is to get rid of the mortgage by age 65. This may mean making two or three extra payments per year or paying a little extra on each monthly mortgage payment. There are a few online mortgage payoff calculators to choose from which can show you how extra payments can move you closer to a mortgage-free life, as well as how much interest you can save by increasing your mortgage payments.
7. Don’t Indulge In Fancy Toys: According to the Spectrem Group, which has tracked and polled the US richest households for years, “millionaires tend to be conservative with their spending and aren’t out there buying designer handbags/clothes and jewellery every day.” Very few millionaires own BMWs, Mercedes, $30,000 watches, or $5,000 suits. Nearly 40% of the “rich” buy their cars used.
8. Good Credit: The better your credit score the lower the interest rate will be when it comes to pay on your mortgage and car loans. The “rich” do this by carrying low debt loads.
9. Goal Setting: Rich people don’t just stumble upon success. They plan out and prioritise their targets first, to determine their (financial) goals and how to put them into ACTION. Millionaires have a clear vision of what they want to achieve and then take the steps necessary to get there.
10. Real Estate: Most “rich” people buy homes that are not overly priced or extravagant in rentable areas. They maintain them appropriately or rent them out consistently. They pay down their mortgages and ended up with cash-flowing assets that help to build their net worth slowly over 30 years. They know property is not a quick or big investment opportunity, but that it can be a steady earner over time.
The secrets to becoming a millionaire are not as mysterious as you might think. Small tweaks, target and then goal setting, and long-term financial planning can move you closer to that seven-figure number.
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