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4 Ways to Think Like a Millionaire

4 Ways to Think Like a Millionaire

A lot of people think that becoming a millionaire is simply a matter of coming up with a great business idea or working your way to the top of a fortune 500 company. What they don’t realize is that many people who earn upwards of 100k per year are still living paycheck to paycheck.

The road to financial independence is not based entirely on your income, it has more to do with how you think about money. There are four key components to the millionaire mindset. Mastering them isn’t guaranteed to make you rich, but it is certainly going to get you on the right path.

1. Learn the Difference Between Assets and Liabilities

We all know the traditional definition of assets. Things like homes, investments, and cash all add a nice big plus sign to your net worth. However, an asset is not just something that has value. It’s something that adds value.

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Let’s say, for example, you want to buy a car. The car certainly has value, but it will not add a single dollar to your net worth. In fact, it’s going to cost you money. Every month you’ll have to pay for gas and insurance. The car’s value will depreciate as it ages, it’s value decreases every single day that you own it. This makes the car a liability.

If you were a taxi driver, the car would be an asset as it makes you money every day. But for the average consumer, a car is often nothing more than a money pit. Thinking this way will remind you to spend your money only on things that will help you grow financially.

2. Identify Ways to Generate Passive Income

Most people earn their living by working a job. This is an example of an active income. You have to go to work every weekday, if you want to continue to earn. If you stop going to work, you stop making money. Your wealth is limited by how much you can work.

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For most people, generating passive income is a simple matter of making some financial investments. Investing in the right stocks or bonds can earn you interest every month, without requiring any direct involvement on your part. Many millionaires look for other sources of passive income, for example investment properties that are rented out through a management agency.

Another example would be investing in online or offline businesses. Remember, you don’t necessarily have to invest money. You can also invest time. Creating a business that runs on its own, like a website, will require a little more work up front. But once the work is completed, it’s a set-and-forget system.

3. Don’t Let Yourself Be Influenced by Fear

“Buy low, sell high” is a common colloquialism used in reference to business. This can pretty accurately sum up nearly every piece of business advice you’ll find online.

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Remember the economic collapse of 2008? Financial publications would have had you believe that anybody investing in the stock market during this time was simply a fool! And yet for the three years following the recession, the average annual gain was a whopping 11.9%

Billionaire investor Warren Buffet said it best himself: “Be fearful when others are greedy, and be greedy when others are fearful.”

4. Live Below Your Means

It doesn’t matter if you make $20 thousand per year or $200 thousand, it’s important that you live below your means. People have a natural tendency to start spending as soon as their income increases, but you have to save whatever money you can. Start today.

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Even if you can only save $10 per month, it will be a start. Next time your income increases, whether it’s from a raise or one of your investments, try to add this money to your savings, instead of spending it upgrading your lifestyle.

The thrill of material possessions fades rather quickly. But one day, you’ll be presented with an opportunity. Maybe the perfect house for you to start a family in, or maybe a chance to invest in an up-and-coming business. When opportunity strikes, you want to make sure you have the financial resources to take advantage of it.

Featured photo credit: Sebastien Cosse via flickr.com

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Josh MacDonald

Internet Entrepreneur

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Last Updated on April 3, 2019

How to Nix Your Credit Card Debt in Less Than 3 Years

How to Nix Your Credit Card Debt in Less Than 3 Years

Debt is never a fun thing to be in. But, there are many actions that you can take that will help you rid yourself of the burden of debt once and for all.

By coming up with a set plan, eliminating your debt can feel much easier than constantly thinking about it.

This post will provide some tips on how you can do this to help you nix your credit card debt in less than 3 years.

Hint: there are ways that are easier than you think.

1. Consider Consolidating Multiple Credit Cards If Possible

This may not be applicable to you, but if you have multiple cards – it is something to consider. Keeping up with multiple bills is time consuming.

It will depend on the balance you have on each. Consolidate ones you can but do not do it to the point that you get too close to the maximum limit. Also, it is ideal to pick the card with the lower interest rate.

Consider if there are any fees or alternatively, rewards, with transferring a balance to another card. Watch out for fees. Note that some cards offer rewards for transferring a balance to them. This is extra cash that can help go towards paying off your debt.

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Having one or two cards can make nixing your debt much simpler than keeping up with the balance of a bunch of cards. Keeping track of paying the minimum towards a bunch of cards is time consuming. Spend the time to consolidate instead to make the overall process simpler going forward.

My tip: Have one main credit card. Have a second one that you use for necessities – such as groceries or gas – that offers rewards for those purchases (a lot of cards do) and set the second one on auto-pay. You should be able to pay off a smaller amount on auto-pay if it is a necessity. If you think you cannot, then you may need to cut down a lot on expenses.

Why do I suggest doing this? Having one thing set to auto-pay is one less thing to think about. One less thing to waste time on. Same idea with consolidating to one main card. Tracking down too many is a hassle.

2. Try to Pay the Full Balance You Spent Each Month at the Very Least

You need to pay off the amount you are spending each month when that bill comes in. This is the amount you spent THAT month.

Do not let the debt keep accruing while you work on paying any unpaid debt that has accrued. It will become a never-ending battle. Try as best as you can to be current on paying for each month’s expenses when that month’s bill comes out.

If this is a strain, consider why. You may need to cut expenses. Or you may need to consider other cards. Or look at where this money is going.

3. Pay Extra When You Can – Every Small Amount Counts

This cannot be emphasized enough. If you are looking at a lot of credit card debt, it can look daunting, but each extra amount that you can put towards the debt will really add up – no matter how small it is.

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It does not just reduce the principal amount that you have left to pay off, but it reduces the amount that is collecting interest. You will always save money with that reduced interest.

4. Create a Plan on How to Pay Extra

Back to the main point, having this plan is giving you one less thing to think about.

This plan should be a plan that works for you. If it does not work for you, your spending habits, and your views on debt, then it will not be an effective plan.

For instance, if a set plan of an extra $50 (or another amount that you know you can afford) works for you, then do that. Set that aside every month and pay that extra amount. Treat it like a bill. Choose an amount that works for you and pay it like clockwork as though it was a bill you had to pay each month.

Little amounts will not nix it entirely, but they will help tackle it and having a set plan can make it less of a chore. Creating a new plan of how much to put towards it each month is an unnecessary added stress.

5. Cut out Costs for Services You Do Not Use

If you are signed up for subscriptions that you do not use because of some free trial or for some other reason, cut it out. Your overall financial position will look better.

In turn, that will make cutting your credit card debt easier. Look at your statements to find these expenses. If you do not use them, you may forget you are paying some unnecessary amount each month. Cutting it out can really add up in savings that you can put towards other needed expenses.

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6. Get Aggressive About It

Consider these points:

Depending on the interest and the level of debt, you may need to give up a few indulgences. For example, instead of ordering delivery or going out to eat, cook at home. Everything adds up.

Other things may be more of a sacrifice. It may be a trip you wanted to go on, or a daily latte habit you’ve picked up. In these instances, consider how important it is to you and if it’s worth the sacrifice. And if it is a costly expense, think whether you can wait to indulge.

Cutting an extravagant expense can really help make a dent in your overall debt. Try not to add to debt when you are trying to pay it off. It will be a never-ending battle. Make it less of a battle with these tips and it will feel easier.

Bottom line: Do what you can to make this process easier for you. Implement steps that do this. It takes time now, but will help overall. Also, keep track of your spending and paying down of your debts. Which is the next point.

7. Reevaluate Your Progress at Set Intervals

Doing a regular check-in can help you see your efforts pay off or maybe indicate that you need to give this a bit more effort. If you check every 3-6 months, it will not feel so much like a chore or feel so daunting.

By doing this, you will be able to better understand your progress and perhaps readjust your plan. Bonus: if you see it pay off, it will feel great to do this check-in. You will get there.

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Finally (and most importantly)…

8. Keep Trying

Do not get discouraged. Pushing it off will make it worse. Just keep trying.

Once your debt becomes lower, each monthly payment will reduce the balance more. Why? You are paying less towards interest. It will be a snowball effect eventually and it will become much easier to manage. Just get to that point. And know once you do, it will feel easier and motivating.

Start Knocking out Your Debt Today

The best way to eliminate debt is to get started right away. Begin by implementing the above steps and watch your debt just melt away. Try out some of the above strategies and see what works best for you. Soon you’ll be on your way to a debt free life.

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Featured photo credit: Pexels via pexels.com

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