You might wonder why there are people, we call them millionaires, who are successful in managing their money. It would be best to get some financial tips from millionaires who managed to beat the odds of life’s uncertainties, how they were able to build a fortune, and the financial and budgeting habits they practice every day.
Here are some financial tips and advice we learned from millionaires.
Buy Used, Sell Your Junks
Learn to be thrifty and frugal. It is not because you have money to spend, you will spend it on any stuff just to satisfy your whims and fancies. As such, buy clothes at thrift stores, surplus shops, or take advantage of bargain and sale items. And choose to buy a used car, rather than a brand new one, that can still be in good running condition.
Sell your stuff which you would not need anymore yet still usable and functional. Take some time to declutter your closet and your kitchen cabinet, you will realize there are a few stuff you haven’t used for ages. Or kids’ clothes which they have outgrown already. You can make money out of those by putting them up for sale.
Live Simply, Be Practical
Gone were the days that social status is held at a premium. Even millionaires choose to be simple and minimalistic. This is where social esteem, aesthetics, and functionality are held in check and balanced. Even the rich opt for smaller apartments, budget hotels, low-profile brands of cars, clothing, personal gear, and the like.
In addition, be smart to weigh in comparing brands as to function and practicality. For example, you don’t need to choose a high-end mobile phone with all its sophisticated features which you do not need at all. You don’t need to shop for designer clothes and apparel when your lifestyle does not dictate.
Pay in Cash
Millionaires are critical of the inflow and outflow of their cash on hand, most especially on expenditures. Say goodbye to swiping those credit cards and debit cards, despite the marketing blitz they flash everywhere. It is on this precept that it is always a good idea to pay for items in cash. If you don’t have cash, then do not buy it.
From a deeper perspective, you live within your means. Spend what you have earned this month. When you run out of cash this month, then you cannot spend anymore and defray the expense until the next month. This pertains to those expense categories that you can afford to delay, perhaps on clothes and other non-essentials.
Steer Towards Your Financial Goal
It is easy to have life goals. But you need to lay down an action plan that would work towards attaining your goal. For example, to achieve a million in your bank account by the end of five years, you need to break down that goal like every month you need to set aside a certain amount. That’s it, you have a game plan in place!
This game plan is calculating backward to know how much you need to earn now, and how much to save every month in order to hit your goal after five years. This saving habit makes you realize the value of achieving and the value of working hard to achieve financial freedom in the future.
Auto-Save Your Money
Make sure you set aside a certain amount in your savings account. Make it an auto-debit from your salary to your savings account. In no time, you would not notice you had built up the savings that you can use for your financial goal.
You could spend your accumulated savings for lifetime investments, or build your retirement fund. You would also consider using it for huge expenditures such as a down payment for your house, or a buffer for emergency or unscheduled expenses for the home. As the old adage says –be prepared for the rainy days.
Max Out Your Retirement
With your unlimited wants and unending expenses at the present, you might think it is hard to save now. But it would be a lot harder if you end up with nothing during your retirement years. The senior age when you cannot work anymore and when you should be enjoying life after many years of working.
This phenomenon boils down to the idea of preparing for your retirement. Set aside money intended solely for your retirement. You would consider long-term placements with a higher rate of return and tax-free so that your money will grow faster. Plus, there is a penalty clause that discourages you to withdraw the funds before maturity.
If you cannot max out your accounts, it is highly recommended that you contribute to your retirement fund as early as you can. Even it is just a bare minimum, it really matters to start at an early age. The younger you are, the better. Do not blame your small earnings, the important thing is that you are in the habit of saving for your future.
Live Below Your Means
This is an all-encompassing statement that reminds us to be responsible spenders and always future-minded. Be a strategist, know what course of action to earn and save. Every penny coming in is hard-earned, so there is the value of discipline and hard work. Know the wisdom of saving and sacrificing in order to get ahead in the race of life!
These financial tips are barely simple, straightforward advice from millionaires. These rich guys do not advise you to invest instantly in blue-chip stocks, deposit in huge money placements. or purchase high-end real estate properties. Instead, they are just budgeting lessons that you can practice every day and use as a starting point.
Manage your personal finances and strive to look for ways to increase your earnings, reduce your debts or even have a debt-free life. Look for ways to increase money coming in like a side job and a small business. Make necessary lifestyle adjustments, learn to be frugal and thrifty in order to lessen your expenses.