What do you think is the path to riches? Most people believe that you have to win the lottery, inherit the money or have a super high-paid job like a CEO or celebrity. While having a high paying job makes getting to the million dollar mark easier, it isn’t the only factor. It isn’t even a necessary factor.
If you earn $40,000 per year, working from age 25 to 65, you will earn $1.2 million dollars in your lifetime. About two decades ago I was told by a financial planner, “It’s not what you earn. It’s what you keep.”
Think about that for a minute. There are plenty of lawyers and dentists who are broke. They earn $143,000 annually and spend $142,000. What is left over usually is used to maintain credit card bills and rich living. If anyone with an income spends less than they earn (after taxes and expenses), they will be able to save money. Save money and you’ll have it available to invest. You will have it available when “once in a lifetime” opportunities come up.
Most Americans don’t have 3 months salary in the bank. You should have a few years worth of salary in the bank.
If you’re thinking of buying a house and the bank approves you for a $250,000 loan. Buy a $150,000 house instead.
Your car running good? How about a detail instead of a new car payment.
Instead of going out to the movies and blowing $100 on a family of 4, how about rent some movies and cook some microwave popcorn.
Live within your means!
This is one characteristic that you will find with all self-made millionaires. THEY LIVE WITHIN THEIR MEANS.
Being frugal makes it easier to live within your means. But if you are serious about becoming wealthy, you have to change your mindset to a state where saving and accumulating money becomes normal. You’ll never get rich spending what you take in. You have to spend much less than you take in and then save and invest.
Becoming a millionaire isn’t easy! If it was, everyone would be rich. But if you are serious about becoming a millionaire, you have to start by saving.
More on this topic as this blog evolves. But if you’ve decided to start on the path to millionaire status, begin to start saving your money. Track your progress and find ways that you can save more.
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