12 Wealth Building Secrets You Need To Know
If you haven’t read the book The Millionaire Next Door, this is an absolute must to put on your reading list. The bestselling book identifies several common traits that show up many times over among those people who have accumulated wealth. If you’re thinking mega mansions and yachts, think again. The “millionaires next door” are people that don’t look the part. They are the people standing behind you in the grocery store line or putting petrol next to you in their “not so fancy” car. For the most part, these people are under consumers.
They have achieved millionaire status because they have consistently employed several wealth-building strategies that any of us can use – beginning today. Here are 12 traits of the millionaires next door:
Set Targets not Goals
Wealthy people don’t simply expect to make more money; they plan and work toward their financial goals. They have a clear vision of what they want and take the necessary steps to get there.
Actively Save and Invest
The majority of wealthy retirees began making the maximum contribution to their Pensions in their 20s or 30s.
Maintain Stable Employment
My research has revealed that the wealthiest retirees stayed with occupation for 30 or 40 years. Staying with the same company can also offer big rewards. It proves you don’t have to be in a high-powered, fast-paced career to be wealthy.
Ask for Advice and Surround Themselves with Experts
Wealthy retirees don’t do their own taxes and they aren’t do-it-yourself (DIY) investors. They know what their strengths are, and if their strengths don’t lie in investing, taxes and financial planning, they leave it up to dedicated experts.
Protect Their Credit Score
This group guards their score closely so they can keep lower interest rates on major purchases such as mortgages and car loans. They also do this by limiting their debt.
Value Having Multiple Sources of Income
Considering the prime importance of income, wealthy retirees go a step further to secure at least three income sources. Those sources tend to come from a combination of Social Security, Pension, part-time work, rental income, other government benefits, and most importantly, investment income.
Believe in Keeping Busy
Busier retirees tend to be happier pursuing their hobbies and social activities. A second job that fuels your passion and keeps you busy while also bringing in extra money is the ideal scenario. Think of how much money we spend simply out of boredom to amuse ourselves. Your side job doesn’t need to be a grind. Do something you would enjoy even if there were no pay cheque attached to it, like ushering at local sports events or clerking at a bookstore.
Cautious About Their Spending
Wealthy retirees are careful not to become a target for scammers. They know that the wealthier you become, everyone from Internet hustlers to home improvement con artists is likely to target you. These retirees take their time and ask the right questions from service providers and seek out referrals before doing business with anyone.
Wealthy retirees believe if you aren’t using it, stop paying for it. It can be anything from cable TV subscriptions to club memberships to home security systems. They follow a monthly budget that helps them see where their money goes so they can make cuts when necessary.
Recognise Money Does Not Buy Happiness
There is, in fact, a diminishing return on happiness. A survey of happy, wealthy retirees found that these retirees each have a high net worth, but their money’s power to boost happiness diminished after $550,000.
Pay Themselves First
For this group of retirees, they understand the value of setting money aside for themselves first. For them, it is an essential tenet of personal finance and gives them a way to keep up financial discipline.
Believe Patience Is a Virtue
Wealthy retirees get where they are through patience. They have an underlying belief that wealthy comes gradually and accumulates through diligent saving, investing, and budgeting over multiple decades.
The wealth mentality is not as mysterious as many people think. Small tweaks, goal setting, and long-term financial planning can move you closer to a wealthy retirement, and the most important of all of these is to work with an Independent Financial Adviser!
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