We see them on the news, in magazines, and all over the Internet. Millionaires have the lifestyle we’ve always wanted and they make building wealth look really easy. In reality, becoming a world-class CEO or a finance magnate takes time, effort, and determination. Although many affluent individuals come from wealthy families, most of them have built their empires themselves and faced many hardships along the way, which makes them all the more inspirational.
Following their habits might not turn you into a millionaire overnight, but, in time, you’ll notice that these tips will help you manage your money better, save more, and even build some wealth for retirement.
Diversify your income
Did you know that 65% of self-made millionaires have at least three sources of income? In financial terms, this is called diversification and it can help you both lower risk and gain more capital. How can you diversify your income if you’re not an affluent investor? Kane Georgiou BSc (Hons), owner and founder at The Money Pig, explains: Getting a second, part-time job can be a great way of diversifying your income. To keep things from becoming too stressful, you may also consider monetizing one of your hobbies. Blogging, for instance, can turn into a steady source of income”. By following this approach, you can maintain financial security. If one source of income stops being lucrative, you can always count on the others.
To build wealth, saving money isn’t enough. You need to make money work for you, and investing is the best way to do this. However, contrary to common belief, you don’t need to wait to reach a certain age or financial status to start investing. In fact, the earlier you start, the better, because your money has time to grow. The smallest amount counts, so don’t wait for that high-paying job or surprise inheritance to give investments a chance.
Live within your means
We tend to think of millionaires as eccentric individuals who flash a glamorous lifestyle and spend money on anything, from designer items to expensive cars and even personal islands. However, behind these several millionaires who stand in the spotlight, there are many more others who live modestly. The image of the millionaire CEO who wears hoodies and sneakers is more accurate than ever, but it’s not just a weird quirk. Saving and investing your money instead of spending it on unnecessary luxuries is a healthy financial habit and an important life lesson that should serve as inspiration.
Be aware of the market if you start your own business
Starting your own business is one of the keys to financial independence and building wealth and, every year, thousands of people decide to quit their jobs and start their own ventures from home. Entrepreneurship can be the best decision of your life, but keep in mind that success isn’t guaranteed either. For your business to work, first you need to do some research and find out if your idea brings something new to the table or fulfills an actual market demand. Otherwise, it’s wiser to keep your day job and consider other sources of investment, such as stocks, bonds, or real estate.