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Lifestyle Secrets of the Unsung Millionaire
By: Tara   |    March 21, 2013   |   2 Comments (0) (0)

It’s not just about how you earn—it’s about how you invest

 

There are just over 5 million millionaires in the United States—that’s 1 in 60 people. Odds are, you know one; but it’s even more likely that you’d never know it by looking at them. Most wealthy, successful people don’t live like Donald Trump, on a perpetual rollercoaster of conspicuous consumption and bankruptcy litigation; rather, they live simply, slowly building wealth by bringing in more than they spend. Here are some ways you can become an undercover millionaire yourself.

1. Invest, early and often

Einstein once said, “Compound interest is the most powerful force in the universe.” The ability of money to build on itself if you have the discipline to leave it alone is truly remarkable. If an 18-year-old saves $100 a month for the first five years after high school, those five years of saving can translate into hundreds of thousands of dollars at retirement. By contrast, it would take $70,000 dollars of investment every month to build up the same savings in the last five years of your career.

The longer you have to invest, the easier it will be to weather the economic storms and leverage your wealth advantageously, even when everyone else is battening down the hatches. Warren Buffet made a billion dollars during the stock market crash of 2008, because he had the proper liquidity and leverage.

2. Never put your money on a losing bet

Every dollar you spend on rent is a dollar you’ll never see again; but a dollar sunk into a solid mortgage will come back around, especially if you have the patience and flexibility to wait out a rough market. Remember, neither the stock market nor the mortgage market have ever declined in value over a ten-year period; the winners are the ones who stick it out.

Likewise, a car you can’t afford is one of the worst investments you can make; luxury cars are expensive to drive, expensive to maintain, and bleed resale value every day, as their flashy accoutrements become obsolete. Be especially wary of lease agreements, which will allow you a fancier ride, but rob you of any resale value.

3. Master your vices

Two packs of cigarettes a day costs $400 a month, if we’re not counting medical bills and lost wages due to illness. Depending on how much you drink, partying every weekend can easily cost you hundreds of dollars a month. Lottery tickets and gambling prey on people who don’t understand statistics, to the tune of $100 billion a year in the United Sates. It’s no exaggeration to say that millions of Americans could get out of debt and start generating wealth if they could hold on to some of that cash.

If you want wealth, you can’t afford to throw down half a grand each month on vices—cut back, and start rewarding yourself in other ways.

4. Take care of your body

The average American spends $7,439 on health care annually—and the vast majority of that spending goes to treatable, preventable diseases like lung cancer, heart disease, and diabetes. It’s not just a national problem, it’s an individual one. If you’re eating microwave dinners and fast food because you think it’s cheaper or quicker, think again—the lost productivity and long-term health costs of poor nutrition vastly outweigh the “quick-fix” benefits. Look for vegetarian alternatives to your favorite meals, get a gym membership, and start investing in your own health. You’ll feel better, think quicker, and save thousands of dollars in the long run.

 

Tara Wagner is a staff writer for TechBreach. She has worked from home for over a decade, and loves sharing news and advice with fellow telecommuting moms and dads. She's fascinated by new tech and new ideas; and when she finds time to unplug, she enjoys long hikes in the mountains near her home. She lives in Denver.

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2 Comments on this Article

Jeri commented on April 3, 2013

#3 "Master your vices" is one I preach all the time. I have friends that are always complaining about being broke and fat, yet they waste cash and calories each day on cigarettes, alcohol, coffee, and fast food. Quit smoking, party less, brew your own pot of coffee, and pack your own healthier lunch! One friend took my advice and was able to buy a new big screen TV within 6 months and a new bikini!

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CoLoR349 commented on March 22, 2013

Common sense advise. ABSOLUTELY LOVE IT. Definitely tweeting this one out.

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