How To Manage Your Money Like A Millionaire Does (5 PROVEN WAYS)
Let's talk about how Millionaires Manage Their Money and what we can do differently to manage our money like the rich!
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In today's video we discuss 5 different methods that millionaires manage their money. Here they are in text-format as well:
1) They live within their means and SAVE a LOT of their income.
The survey details that the average millionaire was spending a median of $90,000 a year in costs, and making over $250,000 a year.
That difference means that the average millionaire that was saving roughly 64% of their income a year.
2) The next thing I noticed from this survey that really surprised me was that most millionaires did NOT have a budget. According to the survey, 74% of millionaires surveyed said they did not have a budget.
While this doesn't seem intuitive, it does make sense if you think about it after awhile. The reason they don't need budgets is that they make more than the average person and probably have some semblance of self control.
3) So speaking of income, the third way Millionaires Manage their money is that they have multiple income sources.
According to INC, 65% of self made millionaires had three streams of income. Becoming a millionaire requires you to have somewhat of a high income compared to your spending habits, and in order to do that, many millionaires have more than one income stream. And for their other streams of income, they prioritize assets over liabilities.
Assets can include the following:
Real Estate like Rental Properties
Stocks
Businesses that generate income
Investments that Appreciate
Dividend Investing
4) The next thing Millionaires do to manage their money is most of them invest in simple investments that are low cost. Investing doesn't have to be difficult, and in fact you can become wealthy by employing a low cost index fund strategy consistently over a long period of time.
If you don't know what an index fund is, it's essentially a collection of stocks, by buying the 1 index fund you get access to all the stocks that the index fund has. I have a great video on a Simple Investing Portfolio for beginners that focuses on index funds.
5) Focus on Basics:
The last thing millionaires do is that they focus on the GAP, and no, i'm not talking about the clothing store. The gap is the difference between what you make and what you spend. This is pretty similar to our first point about how millionaires love saving, but because they save more they actualyl are growing the gap between their spend and their income, which then allows them to do more investing in the future.
▶️ My name is Humphrey Yang, I am an entrepreneur who has built businesses and am passionate about Personal Finance. This channel is dedicated to helping people (whether you're 21 or 81) become better with Personal Finance, Investing, and Entrepreneurship. I hope these videos help!
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Disclaimer: I am not a financial advisor, any investment commentary are my opinions only. Some of the products and services that appear on this channel are from companies that I have an affiliate relationship with, such as Robinhood, for which I recieve a small percentage made via those links, but it doesn’t cost you anything extra!
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