Managing Wealth: 10 Ways Millionaires Grow Their Fortune
Millionaires manage their money differently than most people—which is probably why they have so much of it! From thinking ahead to avoiding splendor, here are 10 ways millionaires manage money, courtesy of Entrepreneur's John Rampton.
1. Don't Be Impulsive
Don't jump for the easy chance now and forgo success in the future—millionaires are able to delay gratification and hold back on making impulsive decisions.
2. Separate Wants From Needs
61% of people who make over $250k drive the same cars as those with more modest incomes. Why? Because they don't need anything better. Spend money on necessities, rather than wants.
3. Look Ahead, Set Goals
Have long-term—that's one to five-year—goals. They're strong motivators and help you put your day-to-day achievements into perspective, according to Timothy Sykes, the Penny Stock Millionaire.
4. Diversify Cash Flow
Whether it's rent, investments or a backyard lemonade stand, millionaires find ways to create multiple cash streams, meaning there's always backup for when one dries up.
5. Automate Investments
Investing is second nature to the well-off. Millionaires have practiced their investment strategies so that good investment decisions are made in the blink of an eye.
6. Have A Rainy Day Fund
Because life isn't all sunshine and rainbows. Money-savvy people get that bad stuff happens, and you don't want to take out bankrupting loans to deal with it.
7. Invest In Things You Understand
"Invest in what you know," billionaire investor Warren Buffett says. If you're a vegan, don't put all of your money into slaughterhouses—odds are you're not quite tuned in to that market. If you understand how a company works and attracts cash flow, you have a competitive advantage in the market.
8. Live Below Your Means
Pulling again from Warren Buffett's example—the billionaire still lives in his $38k crib in Omaha, NE. Be frugal. You don't really need that private jet. Wealthy people often live well below what they can afford.
9. Get Financial Advice
Millionaires ask the experts when it comes to financial management. Financial advisers and accountants are trained in understanding finances. Wealthy people know this, and ask for their help.
10. Get Educated
While higher education may not be critical for the super rich, self-education is. Millionaires take the time to read and invest in their own minds, constantly learning things that gives them the competitive advantage in the marketplace. [BI]