14 myths about turning into a millionaire (together with the truth that it is not too late even after you retire)
14 myths about becoming a millionaire (including the fact that it’s not too late even after you retire)
Many retirement articles suggest that you “need” a million dollars to retire safely. We know that is not true. There are as many different ways to withdraw with confidence as there are people. (Use the NewRetirement Planner to find YOUR path.)
However, reaching a million dollars is a huge and often desirable milestone. And depending on your goals, retirement can actually require significant savings.
Here are 14 myths and a few pointers on how to become a millionaire.
There is no doubt that making money is easier when you have money, come from, or inherit it.
However, this is not a requirement. It’s not even that common. According to Fidelity’s Millionaire Outlook Study, the vast majority – 82% – of millionaires are self-made – they didn’t inherit money, they built their fortunes themselves.
TIP: What millionaires inherited from their parents were values. Thomas Corley, author of Rich Habits: The Daily Success Habits of Wealthy People, said, “Over 95% [of millionaires] They have been taught to take responsibility for their actions, respect the law and property of others, work hard for what they want, and improve daily. “
Helping your children build wealth and share your values with them is a powerful legacy.
You may have read the seemingly pathetic sobbing stories of families who make $ 350,000 a year and say they are just “getting through”. Maybe you rolled your eyes and moved on. Maybe you identify with her saga.
When you make a lot of money it’s easy to spend a lot of money, and if you live in certain areas of the country, pay for a private school and have expensive tastes, a really high salary can be spent pretty quickly.
Most people find it alarmingly easy to spend what you deserve – no matter how much it is.
The average millionaires earn a decent salary. The median household income for a millionaire household is $ 200,000. However, the trick to becoming a millionaire is not necessarily how much you make, but how much you can save.
TIP: The Fidelity study found that an average of 31% of millionaire salaries are spent on savings. However, the sooner you put money away, the easier it will be to achieve millionaire status thanks to the magic of increasing returns.
For example, a 20-year-old who is saving $ 200 a month until retirement would have around $ 1 million at 65. While a 50-year-old contributes $ 1,500 a month at 65, he would only have half that at 65.
Regardless of your age, saving money is THE WAY to millionaire status.
Sure, being lucky can be one element of getting rich. After all, success requires some risk. As the saying goes, “Luck favors the brave.”
However, the risks taken by millionaires are usually well calculated. And becoming a millionaire doesn’t necessarily mean how you make your money. It’s about using a significant portion of your income for savings. Saving and investing is not a godsend – that is purely wise.
TIP: Here are 22 smart and easy ways to increase the savings.
Indeed, worried about running out of money in retirement, most of us ask, “Will my savings really last as long as I do?” However, we may all be asking the wrong question. Retirement doesn’t have to be a time of decline in prosperity.
You can actually improve your financial status during your golden years.
TIP: Read these tips to become a millionaire after retirement.
Think of a millionaire and you might think of a Harvard trained attorney or a Stanford MBA. While higher education increases your chances of getting higher salaries, it doesn’t improve your chances of becoming a millionaire.
According to Thomas Stanley’s now classic book The Millionaire Next Door, only 8 percent of millionaires have masters degrees, while 8 percent have law degrees and 6 percent have attended medical school.
Yes, there are many millionaires who made their living working for large corporations.
However, according to Stanley, 66 percent of millionaires own their own businesses. Entrepreneurship seems like the surest route to millionaire status. And most millionaires actually have multiple streams of income.
TIP: Corley’s research found that millionaires are seedy fools. They often have multiple streams of income, with 65% having at least three different streams of income. Learn more about passive income.
TIP: Real estate hustle and bustle and investments are popular with millionaires. Discover 8 ways to invest in real estate.
Can You Guess the Age of Most Millionaires? You’d think they’re all in the form of young technology freaks like Mark Zuckerburg, who started Facebook during their studies.
However, the median age of US millionaires is 62, and about 38 percent of millionaires are over 65 years of age.
Success in mid-late life is especially true for entrepreneurs. According to the Global Entrepreneurship Monitor (GEM), the highest rate of entrepreneurship in the world has shifted to the 55 to 64 age group.
In addition, the study of age and high growth in entrepreneurship, conducted by MIT in collaboration with the US Census Bureau, analyzed 2.7 million people who started businesses between 2007 and 2014 and found that: a The 50-year-old is twice as likely to have massive success – defined as a company that is below the top 0.1 percent – as a 30 year old.
TIP: Learn more about entrepreneurship after 50.
The main concern of most millionaires is one that you likely identify with: health. Being healthy and being able to afford health care is their greatest concern.
- How to spend your time
- How to Leave a Meaningful Legacy (Not Money, Impact)
- Your future financial security (see below)
TIP: Find out what retirement health care will cost. Use the NewRetirement Planner to get personalized estimates for healthcare before you turn 65, Medicare, and even long-term care.
TIP: Have a plan for what you want to do in retirement. Here are some resources:
The Fidelity study found that millionaires were very uncomfortable about their future finances. In the retirement planning, debt management, property value, income level, and investment returns categories, 68 percent of millionaires felt good about their current situation, but only 17 percent were confident about their future finances.
TIP: Run worst-case scenarios with the NewRetirement Planner and stress test your retirement savings to gain confidence that you have the money you need, when you need it.
Only a third of the millionaires in the Fidelity survey work with a financial advisor. Working with a consultant doesn’t necessarily reduce stress for the rich, however. What makes the difference Financial competence.
Millionaires who felt less stressed out are the ones who consider themselves knowledgeable about investing and who manage their finances on their own.
Tip: Take control of your own financial future. Use a comprehensive retirement planner to get an idea of your own money. Even if you use a counselor, tools like NewRetirement Planner can help you review health review recommendations and discover options on your own.
According to the Spectrem Group, 58% of millionaires admit learning about investing.
However, you save and invest.
TIP: Stock picking and day trading are not the proven way to become a millionaire. You can take the easy route and invest in index funds with a long-term buy-and-hold strategy.
TIP: Corley noted that “self-made millionaires make a habit of saving”. You should too.
There are millionaires all over the country, and New York State isn’t even in the top five states for millionaires. The states with the highest percentage of millionaires, according to Phoenix Marketing International, are New Jersey, Maryland, Connecticut, Massachusetts, and Hawaii.
TIP: Run your own race to prosperity. It doesn’t matter where you are or what you do.
What is the favorite car of millionaires? It’s not a Tesla. Another Mercedes. It’s not even a Lexus. Guess what? Millionaires drive Fords more than any other type of car.
TIP: Think carefully before spending on luxury goods. It’s okay to pamper yourself, but try to waste your savings first. With that covered, indulge yourself.
Also, think about how you can spend money on happiness, not status. Discover 11 ways to spend on luck.
Millionaires don’t usually lounge around the pool or hit the links. Hard work counts, and millionaires often love what they do. Although millionaires are usually older, 80% of them are still on the job.
TIP: Can you cut expenses while postponing retirement for a year and really increase your savings?
Use the NewRetirement Planner now to determine your net worth, how much the value of your estate will be for your life expectancy, and whether or not you are on your way to a secure future.
It’s not scary and you have several options for improving your prospects for prosperity and security.
As shown above, work, multiple streams of income, persistent saving, and prudent spending are keys to becoming (and remaining) a millionaire. Use the planner to see how any or all of these strategies will transform your financial wealth.