I've worked on building financial security & a healthy relationship with money for over five years.
I helped thousands of people to take back control of their money and their future, and set themselves on a path to financial freedom one step at a time. Many became millionaires without even realising it until we ran the numbers!
1. Don't Drive Your Wealth:
Most luxury cars lose about 60% of their value after five years. Millionaires don't invest in depreciating assets like luxury cars. Instead, many buy used cars and invest their money in appreciating assets like stocks or real estate.
If they buy a new car, the general goal is to keep it for years, ten or more and enjoy the use of it for the entire duration of its life, taking good care of it, servicing it regularly and keeping it in good order.
Focusing on aligning most of their money with sustainable wealth accumulation over the long term instead of short-term luxuries that depreciate and are social currency to look good in front of friends rather than a real wealth-securing currency that protects you and gives you financial freedom.
Luxury cars may be enticing, but they often represent a depreciating asset. Millionaires understand the value of investing in appreciating assets such as stocks or real estate instead of sinking their funds into vehicles that lose value over time.
2. Pay Yourself First:
A cornerstone of wealth accumulation is saving and investing a significant portion of your income. By prioritising savings over excessive spending, you can build a substantial nest egg for the future.
The average millionaire saves and invests about 64% of their income. Never live bigger than your paycheck. Don't consume. Instead, use your paycheck to invest in your future. My advice is to live like an undercover millionaire today to be a millionaire tomorrow.
By saving and investing a significant portion of their income, millionaires ensure their financial growth, emphasising purposeful money management.
3. Avoid Lifestyle Creep:
Resisting the urge to inflate lifestyles with increasing income safeguards wealth, emphasising the importance of disciplined spending habits.
It's easy to succumb to lifestyle inflation as your income grows, but resisting this temptation is crucial. Continuously reassess your expenses and prioritise saving and investing over unnecessary consumption.
Never allow lifestyle creep to eat away at your wealth. As you earn more money, save more money. You will be tempted to spend more money because you can, but don't allow your mind to trick you.
Control your expenses before they control you.
4. Grow Your Network
A degree is good, but your network is better. One of the greatest indicators of your future success is determined by the people who know you and trust you. The strength of your network plays a pivotal role in your professional success. Cultivate meaningful relationships and leverage your network to open doors to opportunities and collaborations.
Build and maintain meaningful relationships as early as possible. Your network is your net worth.
5. Create Multiple Streams of Income
If you've ever heard of the saying:
"Don't put your eggs in 1 basket."
Then you know that you shouldn't rely on just one income source.
Diversifying your income sources mitigates risk and enhances your financial stability. Explore avenues such as investments, side hustles, or passive income streams to supplement your primary source of earnings.
Start building multiple income streams today.
6. Avoid Bad Debt:
Escaping the cycle of debt requires a fundamental shift in financial habits. Focus on increasing your income, reducing expenses, and wisely investing your resources to eliminate debt and achieve financial freedom.
Getting out of debt is 20% knowledge and 80% a change in habit.
Changing your financial habits include:
- Earning more
- Spending less
- Investing more
To live debt-free, you may have to adopt a lean life.
7. Build an Emergency Fund
63% of Americans cannot afford a $500 emergency.
Up to a third (34%) of adults in the UK have either no savings (or less than £1,000) in a savings account.
39% of Irish people do not have a rainy day or emergency fund.
That means that a huge number of working people would have to resort to high-interest credit card debt to pay for surprise expenses.
An emergency fund acts as a financial safety net during unforeseen circumstances. Aim to set aside enough funds to cover three to six months' worth of living expenses, providing peace of mind and stability.
Do your future self a favour and save 3 to 6 months' worth of living expenses.
8. Create Healthy Habits
It takes about 66 days for a new behaviour to become a habit.
Consistency is key to developing healthy financial habits. Establish a daily routine that promotes productivity and discipline, laying the groundwork for long-term financial success.
When you build healthy financial habits, you will struggle less in life.
9. Prioritise Your Health:
76% of millionaires exercise for at least 30 minutes daily. Investing in physical and mental well-being ensures you can stay living your life. Once your health fails, life suddenly gets very difficult.
Your well-being is invaluable, and investing in your health is a non-negotiable aspect of wealth accumulation. Prioritise regular exercise and a balanced diet to safeguard your physical and mental well-being.
Never take your health for granted. Sticking to an exercise routine and a healthy diet is key.
Remember that you cannot enjoy your wealth if you have bad health.
10. Read More Books
85% of millionaires read books for 30 minutes or more daily. Books allow you to learn from and think like the greatest minds on earth.
Continuous learning is a hallmark of successful individuals, with reading serving as a gateway to knowledge and personal growth. Dedicate time each day to enrich your mind with insights from books, fostering a mindset conducive to success.
If you want to succeed, you have to read.
11. Use Money to Make money
Albert Einstein once said:
"Compound interest is the eighth wonder of the world."
Harness the power of compounding interest by strategically investing your money. By allowing your investments to grow over time, you can leverage the potential of your assets to generate passive income and build wealth.
Don't work for your money; make your money work for you. Allow compound interest to build your wealth. It's all about working smart, not hard.
Conclusion:
Weaving these proven strategies into your financial journey can set you on the path to achieving wealth and financial freedom. The journey to financial independence is a marathon, not a sprint. Embrace patience, discipline, and perseverance as you work towards a life that you get to design and not what you're forced to live with.
Do yourself a favour:
Join the Rise Money newsletter (100% free). Get weekly tips on creating modern wealth and a healthy money mindset.
Your bank account will thank me later.
More money, more freedom, more happiness
Kel