Have you ever wondered what it takes to become a millionaire? Do you think you have to be born into wealth, inherit it, or have a 6-figure income in order to achieve millionaire status?
Prior to reading this book, I may have thought the answer was yes. However, The Next Millionaire Next Door opened my eyes to the many myths we believe about wealth and those who are millionaires.
The book inspired me to share a few of these profound, yet simple ideas that millionaires understand and practice in their everyday life. These 10 tips are vital to growing your wealth no matter what your income looks like.
If you’d like to learn more in-depth information on how to become a millionaire, or how to manage your money well, I highly suggest you read The Next Millionaire Next Door. But for now, here’s my take on 10 tips self-made millionaires practice to achieve their wealth status.
Disclaimer: I personally do not believe achieving vast amounts of wealth brings happiness and fulfillment. However, I do believe managing money well (and being generous with our money) brings glory to God which is why I enjoy learning about finances and would like to share these tips with you.
This page contains affiliate links, but I would never recommend something I don’t love and use myself. If you want more information, please visit my disclosure page.
1. Income Does Not Equal Wealth and Wealth Does Not Equal Income
We all know what rich looks like, but just because someone walks the walk and talks the talk doesn’t mean they actually have the means to show for it.
In other words, let’s say Jim makes 6 figures, drives the latest Lexus, and has a beautiful new mansion. However, he’s in massive debt because his income is going towards sustaining his lavish lifestyle that in reality he can’t keep up with. His net worth is far less than what he lets on because he’s blowing through his money like a hurricane off the coast of Florida.
Meanwhile, Mr. Jackson next door works as a sales representative and drives a 2008 Toyota. Contrary to what his lifestyle looks like, he is actually a millionaire because he saves his money and plans for the future.
So you tell me, does income equal wealth for Jim?
2. Being Frugal is Imperative to Accumulating Wealth
This concept applies to both the doctor (my sister) and the elementary school teacher (me). By the way, we are both extremely frugal. My sister is actually even more frugal than me, and she’s the doctor!
The point is, it doesn’t matter how much money you make. If you blow it all on frivolous things, you’re not wealthy.
Somebody making a modest salary can accumulate wealth if they are wise with their finances. They save, invest, and spend wisely.
3. Nice Things Or A Healthy Bank Account. Pick One.
If your high-paying salary is going towards supporting your lavish lifestyle, there goes any hope of putting that money into savings.
Nice houses come with a hefty mortgage. Nice cars come with an expensive price tag. Nice clothes bought from the department store (instead of nice clothes bought from the thrift store) can make a dent in your earnings if you frequent the shopping mall too often.
You get the idea.
Unless you are making literal millions each year, you must be wise with how you spend your money. Although it would be cool, money doesn’t reappear in your bank account once it’s been spent.
4. Self-Made Millionaires are not the Jones’s… The Jones’s have massive debt and all their flashy possessions to show for it
The Jones’s may look like they have it all, but do they really?
I grew up in a wealthy community where the driveline at school consisted of Mercedes, BMW’s, Audi’s, and Porsches.
Guess what I got to roll up in?
A Toyota Previa. If you’re not sure what that car looks like, it’s because they stopped making them in 1996. Probably because they are the most hideous minivan to grace the planet. But it was sure reliable!
So what’s my point?
That while my family had the money to afford a nicer car, they decided to save that money. Meanwhile, I learned humility and got to ride around in an embarrassing, outdated, jellybean of a minivan.
Unless you are rolling in the dough and don’t know what to do with all of it, maxing out your monetary limit on cars, clothes, the newest electronics, and more won’t help you save money and reach your goals. You might look pretty cool, to people who care, but that’s about it.
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5. Your Spouse Influences Your Financial Success
It’s important for your spouse and you to be on the same page with your finances.
If you are saving all that you can, but your spouse is spending right and left behind your back, you won’t ever be able to save much of anything. In fact, you’ll more likely lose money, or worse, go into debt.
You must be on the same page in order to save money and achieve your goals.
If you haven’t already, sit down and talk over your finances together. I realize it’s a stressful thing to do for most couples, however it’s imperative if you want to be on the same page.
If you’re not married yet, knowing what your future spouse is like with money is detrimental to saving money well.
My husband is almost more frugal than me (which I love!)
He rarely spends money. And because we both don’t spend much, we can use a portion of our savings for fun dates, vacations (we just backpacked Europe together) and gifts for others.
Being wise with your money doesn’t mean you have to be cheap. It simply means you have a plan for your money.
6. Possessions Show How Much Money a Person Spent, Not How Much Money They Have
It can be easy to get jealous of what others have at times. Sometimes it may spark a need to want to go out and spend money on clothes or electronics to stay up to par with those around you.
Just remember, the more you spend, the less you can save.
Spending money DOES NOT bring lasting happiness.
I repeat, spending money DOES NOT bring lasting happiness.
It might make you happy for a short time, but that will quickly fade, and you’ll be on to wanting the next best thing in no time.
It’s a vicious cycle that could very possibly end in debt if not controlled.
Remember, just because somebody has all the beautiful things doesn’t mean they are happy and wealthy. It just means they like to shop. And trying to keep up with all the latest trends is a dangerous mentality if your goal is to save money for your future.
7. Being Frugal Removes Financial Stress Because It Takes Debt or Lack of Funds for the Future Out of the Equation
Debt is a monster and you want no part of it in your life.
It has the ability to strip you of everything you own, and even ruin relationships with people in your life.
Even worse, if you are in debt, you don’t have the means to invest in your future. Think retirement, sending your kids to college, having an emergency fund, and more.
If you are wise with your money and don’t spend more than you have, that stress of debt is eliminated from your life. You are FREE!
If you are already in debt, I recommend reading Dave Ramsey’s book “The Total Money Makeover” to eliminate debt from your life. It will change your life.
8. Only 35% of Millionaires Actually Live in Homes Worth Over 1,000,000
The other 65% live in modest homes.
This statistic tells us that many self-made millionaires are humble in their wealth. This also tells us 65% of millionaires are frugal with their money. They would rather save their earnings and live modestly instead of putting much of it towards a home.
Don’t get me wrong, there is nothing wrong with owning a million dollar home. But there’s also nothing wrong with saving your money if you don’t need the extra square footage or water-front view.
9. Self-Made Millionaires Are Confident, Responsible, and Frugal
Self-Made Millionaires are Confident – They don’t feel the need to show off how much they have in the bank through material items. They are confident in who they are without having many luxurious items to show for it.
Self-Made Millionaires are Responsible – They know how to save, invest, and spend frugally. They don’t wish for a better financial future, they plan for it and take the necessary action to save and invest in what’s to come.
Self-Made Millionaires are Frugal – They know when to spend and when to save. They are not cheap, but rather frugal when the time is right.
10. As of 2016, Only 36% of Millionaires Had a College Degree
This statistic tells us that self-made millionaires work hard.
Without a college degree, 64% of self-made millionaires can’t be doctors, lawyers, dentists, orthodontists, or any of those top of the chart, high-paying jobs. That means, most likely, they make less than these 6-figure paying careers.
You don’t have to make an extravagant amount of money each year to save, invest, and grow your money. You just have to be wise with how you save, invest, and spend.
That’s a Wrap!
Did you learn something new? Are you walking away from this post with a refreshed outlook on what your future could look like financially? I hope so. Comment below one thing you learned from this post that you didn’t know before.
I’m going to end this article by saying this. Even though I love learning about finances, enjoy managing money, and have a passion for sharing my knowledge with you, I know that money won’t satisfy me in the long run. Even if I was to become a self-made millionaire, it wouldn’t be enough to fulfill me long-term. I would certainly be proud of the hard work I put in. And I would be grateful for the knowledge I learned to manage my money well. But it wouldn’t bring me true satisfaction. I know that I can only find true fulfillment and satisfaction in Christ Jesus alone.
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