Knowing how to save like a millionaire can change the entire direction of your life. When many people think of millionaires, they think of reality TV celebrities with their expensive cars, endless shopping sprees, and mansions.
But that’s not real life for most millionaires. Self-made millionaires know better.
If you want to be a millionaire, then you need to know how to save like a millionaire.
“From my research, I discovered that daily habits dictate how successful or unsuccessful you will be in life,” Thomas C. Corley- “Change Your Habits, Change Your Life.”Business Insider
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How to Save Like a Millionaire
Many millionaires are intensely frugal people. After all, they work hard for their money.
These millionaires know where their money came from- their hard work. It takes a lot of work to earn a dollar. It takes a lot of work and determination to earn a million dollars (or more).
You won’t often find a millionaire bragging about expensive things they have bought. Many of them clip coupons, live in modest homes and shop at discount stores. They drive used cars and have a limited wardrobe.
They do all these things by choice because their money is valuable to them.
…and probably because they don’t want to be like those professional athletes you hear about sometimes who have blown it all and are now standing on the side of the road holding a cardboard sign.
How We Saved Our First $180,000 Before We Were 30
Now, we aren’t millionaires…yet. But, we know how to save like a millionaire. We’ve been debt-free and mortgage-free since we were 25 and we have a plan to retire when we’re 45.
Working until we’re 70 just isn’t in the plan. We don’t work for the typical “American Dream” of a big mortgage, new cars, and little league expenses.
We saved our first $180,000 years ago by doing a few simple things like not having paid TV service, only buying used cars, having a (VERY awesome) inexpensive cell phone plan, and a few other tricks.
It’s amazing how much you can save (then put in the bank) by just living differently than the people around you.
Those people who eventually become millionaires typically don’t get there through sheer luck or by making one life-changing investment. Rather, they work hard, live below their means, and start saving early on.Money CNN
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Money Secrets They Don’t Want You to Know
There are many money secrets they don’t want you to know. But, first…
Who are “THEY?”
They are the companies that want you to buy their stuff. What they don’t want you to know is that you don’t actually need the stuff they are selling.
They don’t want you to know how to save like a millionaire because if you weren’t buying their products then they couldn’t become millionaires off of your dime.
Do you need to pay $1,200 a year for TV service? No. Will you survive without it? You bet.
Do you need to spend $200 a month for a cell phone with a data package? Especially when you can get the same thing for much less? Umm…no.
Ask yourself this? Why is Jeff Bezos so stinking wealthy? Because you keep giving him your money.
Millionaires know better. They know these money secrets.
They know how to avoid these money pits (and lures from expensive products) so they can save money and put more of that green paper in their pockets.
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Rachel Sherman of the New York Times wrote an article in 2017 about interviews she conducted with 50 affluent parents.
“Nearly all were in the top 1 percent or 2 percent in terms of income or wealth or both,” she said. What she noticed was that none of these “rich people” were ever proud of spending a lot of money or having pricey things.
The people I talked with never bragged about the price of something because it was high; instead, they enthusiastically recounted snagging bargains on baby strollers, buying clothes at Target, and driving old cars.Rachel Sherman, New York Times
Money Lessons from a Millionaire
There are many money lessons from a millionaire that we can learn but the most important is that saving money is a must.
No matter how much money you make, you must save.
…You must spend less than you earn because anyone can spend it all. So whether you make $50k a year or $500k, you need to spend less than that. Turns out millionaires are great at saving no matter how much they make.ESI Money
Millionaire Money Habits
Did you know that millionaires are notoriously frugal?
Yep. They sure are.
If you want to be a millionaire, then you need to act like a millionaire.
No. I’m not talking about that small percentage of people who got rich from who knows what and they blow all their money during their reality TV shows.
I’m talking about those self-made millionaires who work hard, save hard, and make smart money choices.
I’m talking about the Millionaire Next Door (which happens to be one of my favorite books, by the way).
I’m talking about that guy who has been driving the same old truck (because he likes it) even though he can afford a Ferrari.
Yep. That guy.
He didn’t become a millionaire on his middle-class income by spending frivolously. In fact, you probably won’t find him eating out much. You probably won’t even find his wife hanging out at the spa getting a pedicure with her fur coat and wearing diamond-studded sunglasses.
That last part was a little crazy, but you know what I mean.
Let’s call him “Joe Ordinary.”
Joe Ordinary is a millionaire because he knows how to save money like a millionaire. He has adopted millionaire money habits that have gotten him to where he is today.
Joe Ordinary doesn’t act rich (even though he is).
For example, let’s talk about Warren Buffet.
Despite his status as one of the richest people on earth, he still lives in the same modest home he bought for $31,500 in 1958, doesn’t carry a cell phone or have a computer at his desk, and once had a vanity license plate that read “THRIFTY,” according to his 2009 biography.INC.com
Warren Buffet could have anything he wants. But, he doesn’t want.
That’s the secret sauce.
Those are the millionaire money habits to takeaway.
- Don’t act rich.
- Don’t want for things.
Poor people act rich and get poorer. Rich people act poor and get richer.
“My life couldn’t be happier. In fact, it’d be worse if I had six or eight houses. So, I have everything I need to have, and I don’t need any more because it doesn’t make a difference after a point.”Warren Buffet, INC.com
How Much Do Millionaires Make a Year
So, all these celebrities are always all over your TV. They are actors, singers, sharks, etc. They look like they are LIVING. IT. UP.
Then, you start wondering, “How much do millionaires make a year?”
Well, I can’t speak for those people. I mean, they are in a class of their own.
What I can tell you is that you can become a millionaire on just $56,000 a year.
Yes. You heard me.
So many people think that the title of “millionaire” is only for those celebrities or the occasional person who wins the lottery.
But, that’s just not true.
If you know how to save like a millionaire, then you can become a millionaire on even a middle-class income.
For example, I recently read an article from CNN Money that explains how you can become a millionaire with a salary of just $56,000/ year. They explain that if you save and invest $458 a month starting at age 27, then you will have $1.4 million by the time you retire at age 67.
When many of us think of millionaires, we picture high-powered executives cruising around town in chauffeured limousines. But you don’t need to earn an extraordinarily high salary to join the ranks of the wealthy. In fact, if you play your cards right, you can become a millionaire on a fairly ordinary salary — just $56,000 a year.CNN Money
They chose to use $56,000/year as their example because that was the median household income in 2015.
That means that the title of “millionaire” doesn’t have to be reserved for the Jay Lenos of the world.
It’s also something that you and I can achieve.
Consider this: A 21-year-old liberal arts graduate making an average starting salary of $36,000 would need to save only $25 per week in an IRA to retire comfortably at 65. -The Penny HoarderThe Penny Hoarder
Millionaire Money Saving Tips
Ask any self-made millionaire about money-saving tips and they will talk for hours. After all, they have money because they know how to make it and save it.
The best millionaire money-saving tips involve staying on a budget, buying used, avoiding credit card debt, and investing automatically
Millionaires can be surprisingly frugal. They’re not necessarily big spenders. They live below their means so they can save and invest the difference.Insider
Millionaires Always Self-Educate
Read more. Watch less.
I could also say, “Read more. Spend less.”
The more you watch on TV and the more you scroll on your phone, the less you are learning and the more likely you are to spend money.
The rich would rather be educated than entertained.Business Insider
How Much Do Wealthy People Save?
Wealthy people (including millionaires) tend to save at least 20% of their income.
If you want to achieve financial independence (or even become a millionaire!), make it a game to see how much you can save of your income while not depriving yourself of important things.
Make your coffee at home, pack a lunch, buy used, and quit comparing yourself to others on social media.
Corley recommends putting 20 percent of your monthly net pay, or what you take home after taxes and other deductions, into savings.CNBC
How to Save Like a Millionaire
The most important idea to remember is that anyone on an average salary can save the majority of that salary to achieve financial independence.
Self-made millionaires are wealthy because they save, live frugally by choice, invest, and budget. Saving like a millionaire is less about your salary and more about what you do with your salary.
You have to be willing to tune out those around you who wallow in their overspending.
You have to choose to be different, look past the Joneses, and set your goals.