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14 Unique Thoughts About Money that Every Millionaire Has

14 Unique Thoughts About Money that Every Millionaire Has

I’m sure you’ll admit that money pre-occupies most minds most of the time. Yet research shows that money and finances are one of the toughest things to crack. You need only look at the wealth distribution statistics to see the financial plight that most of society finds themselves in. The results? Well, quite clearly, financially wealthy people are in the minority.

Logically, we can only conclude that they are different from the average Joe Sope. Be it their thoughts, speech or actions – they are different. In this post, I want to highlight 14 unique thoughts about money that makes millionaires different.

1. They know money is abundant

Millionaires live in an abundant frame of mind. To them, nothing is limited or scarce. Whilst most people scramble around – doing things they hate – because they believe money will run out, millionaires know that money will never run out.

2. They know money is the root of all good

Whilst most believe “money is the root of all evil”, millionaires know that money is the root of all good. Money solves problems. Money gives you the power to bless others. Money changes lives. Money brings pleasure. Money liberates. In the right hands, money is the root of all good.

“What material success does is provide you with the ability to concentrate on other things that really matter. And that is being able to make a difference, not only in your own life, but in other people’s lives.” – Oprah Winfrey

3. They know money comes from Value Add

Millionaires know that the number one ingredient that attracts money is problem solving. When you solve problems, you add value to other people’s lives. When you add value, people are willing to pay you bucket loads of cash – happily so.

4. They know earning more outweighs saving

Most financial gurus will tell you to “save as much as you can”. That’s why most of society spends 40 – 45 years of their lives working to save for retirement. Whilst the benefits of saving are undeniable, millionaires know that your ability to earn more money is far more important than your ability to save.

5. They live within their means

In modern day society, we suffer from consumerism. It suffocates us to a point of no return. There’s nothing wrong with spending money. But there’s something crazy about spending money you don’t have. Millionaires budget. Within that budget, they understand the importance of spending less than you earn.

6. They know that time and money have little correlation

Passive income is a millionaire’s secret. By definition, passive income is earning money without you physically being present. Whilst the majority of people hustle and trade their time for money, millionaires trade and leverage their brains and assets for money.

7. They know that calculated risks are not optional

“Playing it safe” with your money is a sad way of living your life. Being stupid with your money is also a pathetic way of living life. But somewhere in the middle, lies a sweet spot. And millionaires know this. They take financial risks, in a measured and calculative way.

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“Brave people don’t live forever, but cautious people don’t live at all.” – Richard Branson

8. They choose action not lottery

Whilst hard work and hustling every day is not a priority, waiting for the lottery winnings isn’t going to crack it either. Millionaires act. They believe in action that positions them to make money. The majority of society believe in the lottery, and hinge most of their financial success on luck. We all need some stroke of luck. Millionaires need a stroke of luck, too. But the difference is this: for them luck finds them on the path of action.

9. They value life experience over formal education

Life is a great teacher. It teaches you stuff that formal education will never teach you, especially when it comes to making money. It’s no surprise that most educated people are employed by ‘drop outs’. Millionaires realize that you learn more about money in the real world than you do through formal education.

10. They value education over entertainment

Although millionaires value life experience over formal education, they don’t – for one second – under-estimate the importance of education. They read books. They read current affairs and stay abreast of issues.

Sadly, the majority of society are soaked in entertainment. From television to movies, entertainment occupies a large chunk of their time. Over weekends, it’s parties and clubs – all in the name of entertainment. Millionaires know that money and habitual entertainment are an unhealthy combination.

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“Poor people have a big TV. RIch people have a big library.” – Jim Rohn

11. They know you don’t need money to make money

Millionaires use the power of leverage. I’ve already mentioned that millionaires know that there is an abundance of money. Just because you don’t have money, it doesn’t mean that there isn’t money. In addition I highlighted that money is generated when you add value to people’s lives. When you solve problems, people are willing to pay you.

These two factors alone mean that if you have an idea that can solve problems and add value to other people’s lives and there’s someone out there with an abundant supply of funds, you are in a position to make money.

Focus on solving problems and creating ideas. That way, you’ll move from the notion of “you need money to make money” to “You need ideas to make money”. And millionaires know this.

12. They know money is a magnet

With money, you are able to attract things and people – both good and bad. When you value money, you attract good. When you disrespect it, you attract negative aspects. Millionaires know the magnetic power of money and how it can elevate your life to levels you could never reach without it.

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13. They know making money is a process

There’s no such thing as “overnight success”. Millionaires will tell you it took years to become an overnight success. Genuine millionaires have invested time and effort to eventually generate the ideas that make them millionaires. They have made sacrifices that most are not willing to make.

Becoming a millionaire is a process. Cheat the process at your own peril.

14. They know that money should never steal your peace

Ultimately, millionaires know that money is a resource that liberates. But, it should never steal you peace. It should never be chased at the expense of your health, relationships and other important areas of your life.

Conclusion

As I conclude, I think of Andrew Mason, founder of Groupon – a coupon and discount site. Groupon generated the largest revenue in a 12 month period for a start-up company. Founded in 2008, it generated approximately $350 million in 2010.

What was Mason’s ingredients? Simplicity and value add.

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He harnessed the power of collective buying. He created a win-win solution where customers save a ton of money, businesses gets an influx of customers, and Groupon takes up to 50 percent of the cut.

Where money is concerned, millionaires think differently. Apart from lottery winners and criminals, making millions is no fluke. You have to think, speak and act in a way that reflects that you are not mainstream. Go out there and cash in on your thoughts.

More by this author

Peteni Kuzwayo

Peteni is the founder of Run For Wealth. He shares about entrepreneurship and productivity tips on Lifehack.

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Last Updated on September 2, 2020

How to Set Financial Goals and Actually Meet Them

How to Set Financial Goals and Actually Meet Them

Personal finances can push anyone to the point of extreme anxiety and worry. Easier said than done, planning finances is not an egg meant for everyone’s basket. That’s why most of us are often living pay check to pay check. But did anyone tell you that it is actually not a tough task to meet your financial goals?

In this article, we will explore ways to set financial goals and actually meet them with ease.

4 Steps to Setting Financial Goals

Though setting financial goals might seem to be a daunting task, if one has the will and clarity of thought, it is rather easy. Try using these steps to get you started.

1. Be Clear About the Objectives

Any goal without a clear objective is nothing more than a pipe dream, and this couldn’t be more true for financial matters.

It is often said that savings is nothing but deferred consumption. Therefore, if you are saving today, then you should be crystal clear about what it’s for. It could be anything, including your child’s education, retirement, marriage, that dream vacation, fancy car, etc.

Once the objective is clear, put a monetary value to that objective and the time frame. The important point at this step of goal setting is to list all the objectives that you foresee in the future and put a value to each.

2. Keep Goals Realistic

It’s good to be an optimistic person but being a Pollyanna is not desirable. Similarly, while it might be a good thing to keep your financial goals a bit aggressive, going beyond what you can realistically achieve will definitely hurt your chances of making meaningful progress.

It’s important that you keep your goals realistic, as it will help you stay the course and keep you motivated throughout the journey.

3. Account for Inflation

Ronald Reagan once said: “Inflation is as violent as a mugger, as frightening as an armed robber and as deadly as a hitman.” This quote sums up what inflation could do your financial goals.

Therefore, account for inflation[1] whenever you are putting a monetary value to a financial objective that is far into the future.

For example, if one of your financial goal is your son’s college education, which is 15 years from now, then inflation would increase the monetary burden by more than 50% if inflation is a mere 3%. Always account for this to avoid falling short of your goals.

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4. Short Term Vs Long Term

Just like every calorie is not the same, the approach to achieving every financial goal will not be the same. It’s important to bifurcate goals into short-term and long-term.

As a rule of thumb, any financial goal that is due in next 3 years should be termed as a short-term goal. Any longer duration goals are to be classified as long-term goals. This bifurcation of goals into short-term vs long-term will help in choosing the right investment instrument to achieve them.

By now, you should be ready with your list of financial goals. Now, it’s time to go all out and achieve them.

How to Achieve Your Financial Goals

Whenever we talk about chasing any financial goal, it is usually a two-step process:

  • Ensuring healthy savings
  • Making smart investments

You will need to save enough and invest those savings wisely so that they grow over a period of time to help you achieve goals.

Ensuring Healthy Savings

Self-realization is the best form of realization, and unless you decide what your current financial position is, you aren’t heading anywhere.

This is the focal point from where you start your journey of achieving financial goals.

1. Track Expenses

The first and the foremost thing to be done is to track your spending. Use any of the expense tracking mobile apps to record your expenses. Once you start doing it diligently, you will be surprised by how small expenses add up to a sizable amount.

Also categorize those expenses into different buckets so that you know which bucket is eating most of your pay check. This record keeping will pave the way for cutting down on un-wanted expenses and pumping up your savings rate.

If you’re not sure where to start when tracking expenses, this article may be able to help.

2. Pay Yourself First

Generally, savings come after all the expenses have been taken care of. This is a classic mistake when setting financial goals. We pay ourselves last!

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Ideally, this should be planned upside down. We should be paying ourselves first and then to the world, i.e. we should be taking out the planned saving amount first and manage all the expenses from the rest.

The best way to actually implement this is to put the savings on automatic mode, i.e. money flowing automatically into different financial instruments (mutual funds, retirement accounts, etc) every month.

Taking the automatic route will help release some control and compel us to manage what’s left, increasing the savings rate.

3. Make a Plan and Vow to Stick With It

Learning to create a budget is the best way to get around the uncertainty that financial plans always pose. Decide in advance how spending has to be organized

Nowadays, several money management apps can help you do this automatically.

At first, you may not be able to stick to your plans completely, but don’t let that become a reason why you stop budgeting entirely.

Make use of technology solutions you like. Explore options and alternatives that let you make use of the available wallet options, and choose the one that suits you the most. In time, you will get accustomed to making use of these solutions.

You will find that they make it simpler for you to follow your plan, which would have been difficult otherwise.

4. Make Savings a Habit and Not a Goal

In the book Nudge, authors Richard Thaler and Cass Sunstein advocate that, in order to achieve any goal, it should be broken down into habits since habits are more intuitive for people to adapt to.

Make savings a habit rather than a goal. While it might seem to be counterintuitive to many, there are some deft ways of doing it. For example:

  • Always eat out (if at all) during weekdays rather than weekends. Weekends are more expensive.
  • If you are a travel buff, try to travel during off-season. You’ll spend significantly less.
  • If you go shopping, always look out for coupons and see where can you get the best deal.

The key point is to imbibe the action that results in savings rather than on the savings itself, which is the outcome. Focusing on the outcome will bring out the feeling of sacrifice, which will be harder to sustain over a period of time.

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5. Talk About It

Sticking to the saving schedule (to achieve financial goals) is not an easy journey. There will be many distractions from those who are not aligned with your mission.

Therefore, in order to stay the course, surround yourself with people who are also on the same bandwagon. Daily discussions with them will keep you motivated to move forward.

6. Maintain a Journal

For some people, writing helps a great deal in making sure that they achieve what they plan.

If you are one of them, maintain a proper journal, where you write down your goals and also jot down the extent to which you managed to meet them. This will help you in reviewing how far you have come and which goals you have met.

When you have a written commitment on paper, you are going to feel more energized to follow the plan and stick to it. Moreover, it is going to be a lot easier for you to track your progress.

Making Smart Investments

Savings by themselves don’t take anyone too far. However, savings, when invested wisely, can do wonders.

1. Consult a Financial Advisor

Investment doesn’t come naturally to most of us, so it’s wise to consult a financial advisor.

Talk to him/her about your financial goals and savings, and then seek advice for the best investment instruments to achieve your goals.

2. Choose Your Investment Instrument Wisely

Though your financial advisor will suggest the best investment instruments, it doesn’t hurt to know a bit about the common ones, like a savings account, Roth IRA, and others.

Just like “no one is born a criminal,” no investment instrument is bad or good. It is the application of that instrument that makes all the difference[2].

As a general rule, for all your short-term financial goals, choose an investment instrument that has debt nature, for example fixed deposits, debt mutual funds, etc. The reason for going for debt instruments is that chances of capital loss is less compared to equity instruments.

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3. Compounding Is the Eighth Wonder

Einstein once remarked about compounding:

“Compound interest is the eighth wonder of the world. He who understands it, earns it… He who doesn’t… Pays it.”

Use compound interest when setting financial goals

    Make friends with this wonder kid. The sooner you become friends with it, the quicker you will reach closer to your financial goals.

    Start saving early so that time is on your side to help you bear the fruits of compounding.

    4. Measure, Measure, Measure

    All of us do good when it comes to earning more per month but fail miserably when it comes to measuring the investments and taking stock of how our investments are doing.

    If we don’t measure progress at the right times, we are shooting in the dark. We won’t know if our saving rate is appropriate or not, whether the financial advisor is doing a decent job, or whether we are moving closer to our target.

    Measure everything. If you can’t measure it all yourself, ask your financial advisor to do it for you. But do it!

    The Bottom Line

    Managing your extra money to achieve your short and long-term financial goals

    and live a debt-free life is doable for anyone who is willing to put in the time and effort. Use the tips above to get you started on your path to setting financial goals.

    More Tips on Financial Goals

    Featured photo credit: Micheile Henderson via unsplash.com

    Reference

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