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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 June 26, 2020

25 Easy Tips on How to Save Money Fast

25 Easy Tips on How to Save Money Fast

“How to save money fast?” This is the question asked by all of us not in the top 1% of rich people.

If you are looking for ways to drastically reduce your expenses immediately, first look at what you need to spend money on every week. And I mean really need.

You don’t really need to order in food. You don’t really need to buy expensive perfume.

Building from that, you can work out how your regular expenses can be reduced.

As for irregular expenses, they can also be deceptively costly in the long run. Once-off buys can also be tackled with some prudent planning and a little extra research.

And remember: a budgeted lifestyle does not mean a bad or boring one!

But first, understand what budget you can cut down on daily:

  • Regular expenses for the average adult (can be trimmed but not eliminated):
    • food
    • rent/mortgage
    • cell phone
    • insurance
    • socializing/entertainment
    • transportation
    • hygiene products
    • household bills
  • Irregular expenses for the average adult (can be eliminated or cut down a lot):
    • travel
    • clothing
    • medication (*depends)
    • grooming (hair, nails etc.)
    • gifts

Now, let’s dive right into the 25 ways to save money fast:

Save Money on Food

1. Bring a stock of food to the office/work

Instead of popping out for an overpriced salad and a smoothie, leave a set of basic utensils at the office as well as a stock of non-perishable goods such as tinned fruit, tuna, rice crackers and so on (try to avoid the junk food and this can turn into a pretty great diet!).

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Stocking up means you won’t forget or say “I didn’t have the time” when you rushed out to work in the morning.

2. Buy the store-brand version

Many basic foods, such as bread and milk, will taste exactly the same as their branded alternatives. Go for stuff with minimal additives and preservatives. Meat in a tube is probably insanely unhealthy!

3. Eat cheaper cuts of meat

Learn how to tenderize and flavour cheaper meat and fish, and save on the (typically) most expensive item on your grocery bill.

4. Have group dinners

If 10 friends put $5 each in the kitty, it’s pretty easy to make a giant lasagne and get refreshments, as well as hang out with your favourite people.

Save Money in Transport

5. Get a bicycle

Save on gas money and bus/metro fares with this underrated mode of transport.

6. Use public transport and/or don’t get taxis

Some places can only be reached by car. But as a good practise, check your public transport website and see if any routes pass nearby where you need to get to. Walk as much as you can.

7. Find the cheapest gas

Regularly check out where the cheapest gas can be bought.

Save Money in General Shopping

8. Shop online

Not only will you save on the gas or transport fares from going to the shopping mall but you will also find better deals

9. Sell your old stuff

Get your unwanted belongings up on eBay ASAP and earn a few dollars.

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Here’re more ideas for you: 25 Things to Sell to Make a Lot of Money

10. Bulk buying stores

For regular non-perishable/slow perishable purchases such as toilet paper, cat food, pasta, washing powder and so on, do an epic stocking-up trip to a co-op or equivalent (my mum used to go to a place that restaurants buy from).

Be wary of supermarket “deals”, as some have been found to be fraudulent after working out a simple calculation.

11. Become a flea market/car boot sale/street market guru

You can find original gifts and develop good negotiation skills at these places.

12. Generic brand medication

More often than not, the generic version of paracetamol and other basics work the same as the branded version.

13. Choose deodorant, not perfume

It blows my mind when someone drops $70 on a bottle of spray. Stick with a nice deodorant, and not only will you smell just fine but you’ll be sweat-free as well!

Cut Down on Household Expenses

14. Printing

Ink is one of the most expensive substances in the office and coloured ink is doubly so. B

e more efficient and choose black and white, and if your printer doesn’t have a print-both-sides options, just print odd pages first, re-insert the paper and print even pages.

Expand the margins of what you are printing as often as you can to save on paper.

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15. Minimize SMS and phone calls

A combination of a free chat service such as WhatsApp and a free call service such as Skype can reduce your bill to nothing (so long as you have a decent Wifi connection).

16. Shop around for insurance

Most people don’t spend enough time searching for the best insurance deal.

Keep a watchful eye out for deals and new competitors in the market.

17. Try re-negotiating your rent/mortgage

If you have built up a good credit history or a good rapport with your landlord, then chances are a frank chat about needing to tighten your spending could result in lowering your payments. You’ve nothing to lose from trying.

18. Don’t get a TV

Invest in a computer/laptop and an internet-only package. You can watch more (and often better) entertainment on the web, and skip the advertisements as well.

19. Pool your internet bill with a neighbour

My apartment building is basically a big old house split into three apartments. There are five of us in total. We pool the internet bill, making it crazy cheap.

Save Money in Socializing, Entertainment And Travel

20. Have house parties

Instead of paying for overpriced drinks, set up a series of in-house get-togethers with your friends. Everyone takes a turn, so it’s not always your house that needs cleaning.

For sound insulation, hang heavy drapes on the walls and windows. For music, invest in a good second-hand set of speakers which you can connect to your computer. Let Spotify or Grooveshark playlists do the rest.

21. Open festivals, meetups and events

It never fails to surprise me how much underground stuff goes on around me for free or for very cheap. Find out who runs the blogs and websites that list all the less well-known cultural activities.

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22. Volunteer

If you can’t pay for a ticket, volunteer and get to be there anyway.

23. Housesit

There are multiple housesitting websites offering you the possibility to avoid paying hotels and skip the discomfort of crummy hostels.

Save Money on Hygiene and Beauty

24. DIY beauty

French manicures, pedicures, waxing, eyebrows… pretty much all of these can be achieved at home (and done well) with some practise. There are plenty excellent blogs and YouTube tutorials to help.

25. Fewer haircuts/volunteer at a trainee hairdresser

If you can’t bear the risk of a trainee touching your locks, learn more ways to manipulate your hair as it grows and get haircuts sparingly. Women’s haircuts are outrageously priced in many cities.

Bonus: Effective Money-Saving Tips for Everything

Here’s a summary of what you can generally do to save more money:

  • Share/pool resources. Organize a neighbourhood sharing scheme, common resources for your apartment block or with your friends. Not everybody needs an individual lawnmower.
  • Buy energy-saving everything. The easiest way to lower your bills – replace those lightbulbs!
  • Buy in bulk. Be sensible about it (i.e. make sure you have space!), and drastically reduce weekly expenditure.
  • DIY. Skill up using YouTube tutorials on plumbing and many other essential services so you never have to pay for simple problems again.
  • Research a lot before making a decision. Most money-wasting is the result of poor preparation and planning. Don’t shirk this part just because you don’t like it!
  • Use your network. Your network is full of resources that can ease the pain of budgeting. Ask for help.
  • Stop and think. Do I really need it?

Unfortunately, there are some things that require plain ol’ giving up for the time being. This can include high-cost sports such as skiing, the latest versions of some technologies, the finest brands of food/drinks, premier seats at the opera and most other indulgences.

What is important to remember during lean times is that when you look back on your life, it will be the experiences that stand out, not the extra comforts.

Living on a budget can teach you a lot about how much you can really get out of your paycheck. We only live one life, so make the most of every penny you earn!

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Featured photo credit: Unsplash via unsplash.com

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