Live Like a Millionaire

Most millionaires don’t amass their fortunes overnight. Of course, there are exceptions: lottery winners, beneficiaries of a huge inheritance, business owners whose products rocket to instant stardom.

Adjusting to sudden wealth brings its own set of problems—especially how to keep it—but that's the subject of another post.

More common are the millionaires who earned their money slowly, by practicing healthy financial habits all their lives. They might live or work alongside you, á la The Millionaire Next Door. They reside in modest houses, drive practical cars, shop at discount stores. By living below their means, spending and investing wisely, they’ve gradually built up their wealth. By continuing to live below their means, spend and invest wisely, they’re able to hang onto their wealth.

Some have-nots believe living like a millionaire means owning the biggest mansion on the block, driving an expensive sports car, wearing designer clothes and flashy jewelry, over-tipping, showering friends and relatives and acquaintances with gifts, never comparing prices or caring how much anything costs. But if you keep spending more than you’re bringing in, you won’t stay a millionaire for long.

Here are some habits that will help you build wealth and keep it:

1. Always pay your bills on time.
2. Keep debt low and use credit to your advantage.
3. Never spend more than you earn.
4. Save a portion of your income each month. Treat saving like another bill, i.e., pay yourself first.
5. Comparison shop. Never pay more for a product or service than you have to.
6. Don’t spend money on junk you don’t really need or want.
7. Don’t be wasteful.
8. Plan for contingencies.
9. Let your money work for you.

Like losing weight, building wealth can be a slow, gradual process. But by following a plan and developing healthy, lifelong habits, you’ll continue to make progress toward your goal.

What are your suggestions for building wealth? I’d love to hear your comments.

For more saving and investment tips read Live Well, Grow Wealth.