So you want to be a millionaire. Well, we all want to be, right? It may seem like a high goal, but it turns out that the underlying principles that millionaires follow when it comes to their money are quite basic. Some of them are totally boring. But obviously they work, so let’s take a look to see what we can learn. These are the 10 money mistakes that millionaires don’t make.
1. Allow emotions to affect your decisions about money
Millionaires have a heart of ice. Just kidding. It’s not that millionaires don’t have emotions when it comes to their finances, they just know how to separate both. How? Making a plan and automating your money. Yes, it’s super boring. They spend time making a plan for their money – paying themselves first and automating their savings, investments and bill payments – so they don’t have to spend time thinking about those things every day. Having a plan prevents them from losing their minds and making irrational decisions when a bear market hits them. Millionaires know that their time and energy are limited, and prefer to use it in other things.
2. Believe they are rich
Most millionaires – at least those who manage to maintain status – don’t go around thinking they are rich and can afford anything. They know that things can change overnight, so they don’t waste their money. Just because they can afford a luxury car or a more expensive bottle of wine does not mean they are going to buy it. They have clear priorities. They spend their money on the things they care about and cut back on what is less important to them.
3. Focus on cost over value
Speaking of frugality … this is important. Millionaires do not care about the cost of something, but about its value. They think long term. They prefer to spend a little more to buy something that they won’t have to replace in a few years. They know how to identify quality products, and buy accordingly.
4. Think that your salary is the only way to get rich
Your salary is not the only thing you need to build your wealth. Millionaires have multiple sources of income. They do not expect to earn millions with a single day of work, understand the importance of diversification and establish multiple ways to earn money. Both actively, through a job or business, and passively, through the stock market. They are always looking for opportunities and know that a salary is just another piece of a larger puzzle.
5. Do not set goals
Setting goals is incredibly useful. If you’re dreaming of something that seems impossible or crazy, that’s the reason to make it a goal. Be specific and write it down. You may have to go a long way to reach your goal, but dividing it into steps that you can measure – a plan – makes it seem more real. Developing a plan is the difference between a desire and a goal.
6. Try to find the right time
When it comes to investing, millionaires know that focusing on the right time is a waste of energy. They do not try to time the market or choose stocks, but instead focus on long-term strategies. They are aware of the importance of time, so they start investing very soon. Again, boredom wins.
7. Think that wealth is a zero-sum game
The fact that you earn more does not mean that someone else has to earn less. Millionaires tend to have a mindset of abundance, they are aware that finding a way to help more people helps them earn more money, and that having more money, in turn, allows them to help more people.
Look at the famous millionaires you know … how did they earn their money? Creating a valuable product or service for many people.
8. Just look for ways to save money
Millionaires can be frugal, but they know that to move forward they not only have to look for ways to save money but also to earn more. This also comes down to the difference between a mentality of abundance and one of scarcity: if they want more money for something millionaire, they will look for a way to earn more money to pay for it, instead of just trying to save as much as they can. Millionaires do not see money as a limited resource, they look for opportunities to have more.
9. Hiding from problems
When it comes to their money, millionaires know how they earn it and how they spend it. They want to know exactly what is happening with their money, the good and the bad since you can only solve a problem if you know it exists. Once you realize that something is not working, you can take steps to improve it.
10. Believe that it is only luck
With the exception of winning the lottery, millionaires know that winning and keeping money goes well beyond luck. Instead of looking at someone with a successful business and thinking, “They’re lucky … I could never do that,” they ask, “How did they do it? How can I do that?” They are curious and want to know how things work to be able to put them into practice themselves.