Becoming a millionaire
most likely doesn’t just happen to you - it takes planning and
perseverance. It may surprise you to learn that four out of five
millionaires are self made, own their own business (typically ordinary),
consider themselves to be entrepreneurs and do not lead glamourous lifestyles. Here
are some steps you can take to grow your net worth (source: T. Stanley, The
Millionaire Next Door).
Live below your means Well duh! Discipline yourself to save something from every pay period in order to
accumulate money to work for you. Have a budget and work your budget every
month.
Save a minimum of 10% Accumulate
wealth by saving and have the discipline to increase savings every year.
Invest your savings in businesses Savings
should be put into growth-oriented investments. We all have the opportunity to
own businesses by buying stock. Stock prices can be volatile but minimize the
volatility by owning stocks through diversified mutual funds. Investing
on a regular basis allows you to take advantage of stock market downturns
through dollar cost averaging.
Don’t follow the herd Stock
market downturns are often great buying opportunities. This is when many
investors sell stocks instead of buy. Said Warren Buffett in an op-ed
article for the Wall Street Journal, “A
simple rule dictates my buying: Be fearful when others are greedy, and be
greedy when others are fearful.”
Hire a financial adviser You
often need an independent third party to help you make the right financial
moves - especially during times of uncertainty. A good financial adviser
will help you develop a good investment strategy, keep you focused and help you
keep your emotions in check.
It takes
discipline to live below your means, save and invest. One of the
millionaires interviewed by Dr. Stanley never made more than $60,000 per year,
but said, "I have accumulated most of my net worth by living below my
means - I have everything I want, but I have learned not to want too
much."
1 comments:
This is excellent advice - i have passed it on to my financial advisor -this is what he preaches -it's nice to see it in print
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