We often think about the lifestyle of millionaires being full of extravagance, full of glamour and luxury. To be able to earn and sustain that kind of income in the long run, there are a few lifestyles and financial habits that millionaires have. Not only is it essential to retain but also to grow that money every year. To our surprise, these are very minimal changes that one needs to make very early on in life.
It doesn’t matter if you earn Rs1000 or Rs10,000 a month- what matters is how are you utilizing that money.
Let us take a look at the 8 financial habits that these individuals have that set them apart – and what we can learn from them.
1. Solid Work Ethic
Most of the millionaires are known to have a solid work ethic which enables them to follow a strict routine and budget. Their work-life balance may be hampered when they were developing their careers or businesses. However, they did not let the hardships in their personal life, become a hindrance in their professional life.
Good time management, maintaining a healthy lifestyle, respecting people at your workplace, having a balanced and consistent performance at work are some ways to have a good work ethic.
Therefore, having a strong work ethic helps you a lot in achieving your career goals sooner. It makes a person incredibly careful and mindful of all their incomes, savings, and expenditures. Having a clear idea of all these would in time not only help you grow financially but in other aspects as well.
2. Saving > Spending
Almost all millionaires are known to save a major portion of their income. They followed a strict budget when their income was low, and as their finances grew, they did not change their way of spending money. Consequently, the extra money is saved and invested. Being a spendthrift would hamper professional as well as personal growth.
The art of saving is of great significance. Maintaining a monthly budget, avoid splurging on things you don’t need, minimalism etc. helps incorporate the habit of saving. One must get into the habit of saving from the day they start earning. Even reserving 5-10% of your income helps you get closer to your long-term financial goals.
3. Opt for low real estate prices
Millionaires prefer buying real estate that is low in cost. They avoid going for expensive neighbourhoods. After a lot of studies, Sarah Stanley Fallaw said that most of the millionaires have never bought a real estate that is about three times their actual income. The median value she got after her research was $850,000 where the original prices are about $465,000. It is about 3.4 times their income.
Instead, choose to have an expensive interior over an expensive real estate.
4. Taking a side hustle
Maximum of the time, millionaires go for a side work too where they can have an extra income while still being employed. It gives room to extra and variety of opportunities along with consistent learning. When they have extra side work and regular with extra income, this helps them to grow and have more knowledge.
There can be various kinds of side hustles like affiliate marketing, setting up public places, flipping profit or investing in a real estate. These are some options that could get you good extra income.
5. Automate your investments
We often get tempted to buy those expensive items we’ve been eyeing after we get our paycheck. While it’s a good idea to spoil yourself with your hard-earned money, it’s an even better option to see that money grow.
Plan out your investment plans ahead such as mutual funds etc. and automate them with your bank account. This way, the money will directly be debited from your account, and the bank will take care of your investments. Before you know, the interests will double up and will give you long term benefits for which you’ll be grateful.
6. Be prudent
One thing I got to understand is that a millionaire never keeps worrying about where I can spend all my money every single moment. Their first and foremost thought is to be saving as much as they can and spending the least amount as possible. They plan strategies on how to build wealth. Most of them try to spend a lot less than they actually can afford. It is very much necessary for us to spend our money on only things that will help and favour us in future and have god long-term benefits for us.
For example, investing in fine quality products, electronics being the first and foremost choice. Low-quality products will only make you spend double the amount you bought it in. Hence, it is an added expenditure on you.
7. Choose your confidant wisely
“If you’re the smartest person in the room, you’re in the wrong room.”
One of the most crucial things that we must learn from millionaires is to choose our friends very carefully. Most successful people tend to spend time with people who do not always waste money on unnecessary parties, weekending or wasteful shopping. But, people who themselves have a habit of saving.
Having friends that help you grow is vital. They should not just be able to save their money but also guide you through to make sure you save yours too. It is good to spend time with people who have their best interests in you.
8. Avoid lifestyle jumps
It is not right to bring significant changes as and when you have a certain amount of income. We often consider bringing in massive upgrades in our life after a salary hike or bonus. To take these big leaps is not very helpful in the long run. For example, increasing our expenditure by 10% every time we receive a hike of 10%. It is one of the biggest mistakes we tend to make. Most successful people advise that our additional income should become a part of our savings.