We can learn a lot from how wealthy people manage their money — and 10m has been created so everyone can apply habits of wealthy people - so they can also become wealthy.
We’ve studied many of our wealthy, successful clients and we came up with a list of things that you can do to gear up for a wealthy future. No matter what’s going on with the economy, you can apply these tips to your own finances so you can stay disciplined when it comes to spending, saving and investing your own money.
1. They don’t overspend
If you have more disposable income, it’s easier not to overspend. Yet, it’s worth noting that even millionaires have frugal spending habits.
While often, millionaires enjoy many of the finer things in life, typically do not overspend.
For example, they will search for good deals on vacations; they may upgrade to economy plus on an airline but won’t pay for first class; they will keep their cell phones as long as they are working and don’t feel the need to upgrade every time new technology comes out.
2. They utilize rewards credit cards
Many millionaires will put most of their day-to-day living expenses on a credit card that offers points, cash back or miles in return. Then they use these rewards to offset the cost of vacations, spending and leisure activities.
And they always make sure to pay their credit card bill in full every month to avoid incurring any interest charges or fees.
Another added benefit of using a credit card for most of their everyday expenses is that millionaire’s have a strong understanding of what it costs them each month to live their lifestyle. For our 10m members, this then proves to be extremely helpful information when helping them plan for investments and their retirement goals and retirement expenses.
3. They pay themselves first
The habit of paying yourself first — also known as reverse budgeting — means you build a budget based on your savings goals rather than based on your spending and expenses. In doing so, you ensure that every month, money gets allocated to you in the future.
By saving first, you’re able to freely spend whatever is leftover, with the comfort of knowing their savings plans are already taken care of.
Millionaires live within these ‘net cash flow’ means and make every effort to keep all savings plans active and increase them on an annual basis. They do not dip into these investments for anything other than their intended goal.
4. They keep an emergency fund at all times
An emergency fund essentially a stockpile of cash that you can use in the short term for unexpected expenses.
Financial experts generally suggest setting aside three to six months’ worth of your living expenses in an emergency fund. But just how much you choose to save is dependent on your individual income and comfort level.
Arguably as important as how much you save is where you save. Your emergency fund cash should be kept in a savings account that’s accessible and not at risk to the ups and downs of the stock market, but at the same time it should always be earning the highest return possible.
5. They are strategic about carrying debt
Many millionaires try not to carry debt on things like cars or boats to avoid paying years of interest on something that quickly depreciates in value.
However, many millionaires carry a mortgage on their primary home. There are many benefits and tax breaks for this reason.
However, most millionaires accelerate their mortgage payments to pay it off years ahead of schedule and thus reduce the overall interest they have to pay.
The 10M Bottom Line:
Of course, millionaires come to the table with more disposable income and resources than the average American. It’s easier to save when you don’t live paycheck-to-paycheck. That said, these five financial habits are straightforward and can be good guidelines that anyone can follow.
No matter where you are on your own financial journey, establishing smart money habits early on can help as you navigate how you want to spend, save and invest your cash. 10m is here to assist in alternative investment ideas in real estate and business, and can provide the network of financial strategists, direction to save and protect your wealth to obtain a $10m net worth. info@10m.biz
