When it comes to better money habits, the best secrets to steal are from those who’ve done it and made those habits work–the self-made millionaires!
Contrary to popular belief, many self-made millionaires (those who weren’t born into wealth) actually live frugally. It’s their key money habits and saving habits that have helped them get to where they are. I’ve compiled a list of 10 key habits that you need to take from millionaires.
Here are 10 millionaire money habits for building your own wealth:
1. Millionaires invest early and on a schedule
Studies have found that while 70% of millennials have a savings account, a whopping 58% of them have less than $5,000.
If you’ve ever heard of compound interest, you’ll know that how much you start investing with doesn’t matter. WHEN you start investing is the biggest factor. Your investments will grow at an interest rate over time. Millionaires let their money make more money for them.
If you want to learn more about investing in your 20’s, check out this post about 5 investments to make after you graduate.
2. Millionaires think of every purchase as an investment
Millionaires don’t impulse buy. They think about everything they purchase as an investment. How long will this shirt last? Is it a style that’s trendy, or is it a timeless piece that’ll last for years? How many outfits does it work with?
Next time you suddenly want something in a store, give yourself two weeks. Then, ask yourself if you still want it.
3. Millionaires do with what they have before buying more
Wealthy people don’t part easily with their hard-earned money. They make use with what they have before trying to buy more. Advertisements sell dreams and ideas that they tell you can only be achieved by purchasing their products. Millionaires know this isn’t true.
Every item in your house has multiple uses, but it’s likely that you only use them for one purpose.
4. Millionaires cut purchases of items they can make themselves
Millionaire YouTuber, Graham Stephan, is known to only drink coffee that he makes himself. His reasoning?
Coffee shop coffee is overpriced.
The price of a cup of coffee you brew at home is around 16 cents. Coffee you buy ranges between $1-5. That Starbucks trip you make seems harmless, but if you make that every single day, that racks up pretty quickly. That’s money you could be investing to make you more money later on.
5. Millionaires still stick to a budget
Budgeting isn’t always fun, but it’s necessary. Millionaires know this, and it’s still ingrained in their key money habits.
Luckily, there are tons of apps out there that can help you do this! Mint and Personal Capital are the two free apps that I’m using and loving right now (you can also log in on your web browser). It’s a great way to break down your expenses into categories and understand your spending. From there, mark down what you can cut and what you can invest!
6. Millionaires stay away from debt
Debt is one of the largest roadblocks to building wealth. Millionaires stay away from debt. If they don’t have enough money to purchase something that they want, they don’t buy it. This is why going into debt for Louis Vuitton and Coachella is a terrible idea for most people. Avoiding debt now means that you won’t be stuck paying it off in the future.
7. Millionaires invest in themselves
Millionaires are always learning because they invest in themselves. They read books, take courses, and watch videos to continuously educate themselves. This can be used for building their businesses or furthering their careers. It’s important to strive for self-improvement, but also remember to take care of yourself and take breaks as needed!
8. Millionaires create multiple income streams
The most common income stream is earned income, which is made from your day job. It’s also the most exhausting form of income, because you have to be present and do your job in order to earn it. Millionaires create and nurture multiple streams of income outside of earned income, and this is how they build their wealth.
Some other income streams include dividend income (from investing in company stocks), rental income (from renting out property), and business income. It’s well worth your time to learn more about how you can utilize these income streams to build your wealth.
9. Millionaires delay gratification
Let’s face it. The “get rich quick” schemes are fake. Or extremely rare. If it was so common, then everyone would be rich. Millionaires understand this, and they delay gratification. They let their investments sit and build up over a long period of time. A lot of hard work goes into their businesses and income streams before they see the fruits of their labor.
10. Millionaires don’t act rich for others
It’s likely that you’ve seen tons of people on social media flaunting their luxury brand clothing and bags. Many millionaires don’t do this, because letting others know that they are rich doesn’t bring them value. Wealthy people dress the way you imagine ordinary people do, because they don’t see the point of showing off their wealth for others to see.
IKEA billionaire, Ingvar Kamprad, still kept his frugal habits despite being the 8th wealthiest man in the world. He drove an old Volvo, flew economy, and shopped in the clearance or bargain aisles. When it comes to better money habits, Kamprad is the man to learn from.
Building your wealth and creating multiple income streams takes patience, but it eventually pays off in the form of financial freedom and stability. It’s never too early to start. Good luck!
Related: 5 Investments To Make In Your 20’s