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Wealth after all is a relative thing since he that has little and wants less is richer than he that has much and wants more.
- Charles Caleb Colton
Several weeks ago, I met a young roofer who came to give me an estimate for the new roof. What followed in next hour of conversation put me on the cross roads of astonishing facts about this young millionaire in making. He revealed during conversation that he owns four free and clear rental properties, he has very limited debt and he pays himself first.
Wealth is one of the greatest motivators in our life. Hardly, anyone with dreams can live without vivid imagination of wealth.
A stereotypical view of wealth is the “possession of possessions” - Yes, it is believed in general that if John Smith has BMW and if he wears expensive suits, he is wealthy. If John is young enough, he is millionaire in making. What about Rick the roofer ? “Are you kidding me ?”, you may have a giggle.
When stone is unturned, reality is far cry from our perception. Those who chase possessions are being possessed by worries. Worries to keep the lifestyle going when rainy day comes, worries about making others happy. In that rat race, they are not happy. They are the “millionaires in acting”. Who are then millionaires in making ? Let’s unfold some habits of millionaire in making, shall we ?
Habit # 1 - On Income
Millionaires seek unrealized income. Unrealized income comes from sources other than regular pay if you are working and cash flow if you have a business. The secret about unrealized income is in its power to defer taxes. There is no income tax on asset that appreciates yet has no earned income. The roofer I spoke with owns many homes that he purchased, fixed and turned them into rental properties. He mentioned to me that he also owned stocks in several mutual funds. The significance of this habit is that when income is not realized, you can hardly spend it. The unrealized income goes straight to work for yourself.
They live by mantra - “I don’t work for money, money works for me.”
People who never do any more than they get paid for never get paid for any more than they do.
- Albert Hubbard
Habit # 2 - On Goals
These young millionaires have found passion. They are, as this young roofer, working for themselves. They are driven by purpose and goals to achieve financial freedom. I remember, when I worked as an Engineer for GE, I had been forced to have goals for the year that weren’t mine, they were forced upon me by my superior. I worked for the rest of the year struggling to develop burning desire to achieve those goals. These goals were mine only for the sake of earning paycheck. Once I realized that fact, I knew deep inside that, I had to transform my career from wage earner to wealth earner. When you work for yourself, you have to have goals. Without goals, you won’t work for yourself. Is it easy to visualize a young roofer in his dirty uniform to be millionaire in making or a corporate type in his neatly styled suite ?
They live by the mantra - “Once you make a decision, the universe conspires to make it happen.”
Habit # 3 - On Frugality
Frugal, frugal, frugal. They are frugal at heart. They cut out twenty-five- and fifty-cents-off coupons from the week’s supply of newspapers. They are masters of budgeting and planning. They master the art of haggling. They won’t buy what they cannot afford. Their spending habit is driven by “needs” and seldom by “wants”. They do not buy brand name shoes or suits. They do not buy grocery on impulse. They do not drink Starbucks. They plan ahead for their monthly need and only buy what they have on their list. They do not buy new BMW. They know that cars depreciate in first few years. They buy quality used cars at far less price. They are not in business of pleasing others, they are in business of pleasing their inner self.
They live by the mantra - “After all, it is my money.”
Habit # 4 - On Self-reliance
They have incessant drive to set goals backed with congruent efforts to achieve their financial goals. With this comes self reliance. They do not expect a paycheck every two weeks. They develop strong budgeting and planning habits so that they can pay for their own needs. Every millionaire in making has to develop habit of budgeting and planning every expenses. They know that success or failure lie on their own shoulders.
They live by the mantra - “Pay yourself first. Planning is all about stashing money away for retirement.”
Your head is churning. You are about to scream. It’s time to recap. Isn’t it ?
The winner in the “Millionaire in making” is - “One who is self employed, one who has definite purpose in life, one who sets realistic financial goals and works towards achieving them, one who lives within means and, last but not least, one who pays himself/herself first.”
It is the heart that makes a man rich. He is rich according to what he is, not according to what he has.
- Henry Ward Beecher
Other Blogs - Leo Babauta has great article - Financial Zen: How to Get Financial Peace of Mind
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To Your Success,
Tags: budgeting, finance, financial peace, frugal, goals, habits, millionaire, mutual funds, planning, retirement, self reliance, spending, unrealized income, Wealth
Written by: Shilpan on 2008-04-01 at 4:39 amYou can follow any responses to this entry through the RSS 2.0 feed.
Excellent!!!!
#3 is what most Americans have all backwards. They buys things they can’t afford and get to retirement and are swamped in debt to their eyeballs. If you can’t afford it, don’t buy it! It may not be the “cool” thing to do, but when you’re living with plenty at retirement you will be the envy of everyone.
The millionaires in making are just grateful for what they have and evade the “I deserve” attitude that so many get caught up in. They keep things in perspective.
[…] Credit:4 Habits of Millionaire in Making Post a Comment […]
Jennifer,
You are right. Sub-Prime mortgage is a good example. As much we blame lenders and government to allow this disaster to happen, home owner shall be held responsible as well. In this country, we make choices. We are not forced to do anything that we do not want to do.
Thanks
Shilpan
Great blog.
Remember that commercial that featured a “successful” young man, with a big house, a nice car, nice suit and a family? Can’t remember who was the advertiser but the guy cheerfully says to the camera “how do I make it? I am up to my eyeballs in debt!”
So, I completely agree that having possessions does not mean someone is rich. It’s just hard to shake off the “keeping up with the Joneses mentality, you know?
Vered,
I agree with you. I’ve seen that ad as well. I believe that millionaires have self control and discipline to live life by set of principles and not by force of emotions to please others.
Thanks
Shilpan
Yes, you have a great post here and a nice blog! I agree with you that those who want to become rich, have another way of thinking and are looking differently at the opportunities which life is giving them. It’s like to be born to make big money. An entrepreneur will always manage his money correctly and will always think how to double his own income. It’s like another style of living!
Thanks, Good Luck!
You are right on the money. An entrepreneur constantly think about growing his/her money whereas lifestyle thinkers consume money as quickly they get their hands on it. Unfortunately, there are more of us who belong in the consumer of money mind category than the entrepreneurial category.
Thanks for the comment. Please visit frequently.
Shilpan
Shilpan!
I just enjoyed reading this one. Resonates a lot with me.
All these qualities you describe bring self realization in the end and this is the peak for Maslow’s Pyramid.
Loved that, definitely worth stumbling
alikl
Alik,
Thanks for the inspiration. I tried to, concisely, convey important habits of millionaire in making. We are seeing lots of fake rich in our life. These people have possessions but they are actually possessed by their possessions.
Thanks for visiting
Shilpan
Shilpan,
Nice work here. My father’s mantra was always “Pay yourself first.” While he never achieved great wealth ( in a financial sense), he did manage to squirrel away a little money here and there to invest. As a result, when he passed away, there was money for my mother to live on and a home that was owned free and clear.
Wealth and success can be defined in ways other than monetary ones though. I think that you hit the nail on the head when you said that having a purpose in life, goals to work towards and the willingness to live within your means is most valuable.
That was a very captivating read.
I agree with everything you’ve put forth in the article, but I think the main reason most people do not own their own business and make “money work for themselves” is mostly due to laziness to learn about finance, and starter money.
I’ve read this book recently called “Rich Dad Poor Dad”, and its synopsis is basically how this kid has two fathers, one rich, and one poor, and what he learns from the two of them. It’s a great book to read if you have spare time.
Lastly, thanks for your contribution, I added your suggestion to my article and gave you a trackback.
Alex
Shilpan,
I enjoyed this post. Above, point #3 is my new mantra: frugal. I’ve been moving in that direction naturally, but I hadn’t put the word to it. I seem to be simply wanting what I have. Not more.
You have a nice blog. I’m going to have to read some more.
@Lori -
You are awesome as usual. I like your tenderness and simple, caring nature. I know you have a great soul.
@Alex -
Thanks for revising your blog post and adding my comments. That was very humble. What I love about blogging is that I am attracting friends for life. That is for sure. Hopefully, we all can learn for each other and become better in life. I know that I already have begun to change for the better.
@Tom -
You have a nice blog. I am impressed with your depth of knowledge on spirituality in life. I know that I have a friend and a true spiritual soul to connect with. I hope that you will subscribe to my blog and accept my friendship.
You all have already made my life amazingly happier. I have made money in real estate but I have to be honest, I was never more happier than I am now. Thank you all…
Shilpan
Hi Shilpan,
I like this statement quote you included:
People who never do any more than they get paid for never get paid for any more than they do.
- Albert Hubbard
In business it’s very true. It always pays to go that extra male and give people a little more than they expected.
Those small acts of kindness go a long way.
Barbara Swafford’s last blog post..NBOTW Credits Energizers For His Success
Barbara,
I am a hotelier by profession. It’s incredible to see some of my employees who complain about their pay yet they are the least productive bunch I have to deal with. I am a fan of Wallace D. Wattles who wrote classic book - Science of getting rich. I keep his mantra - “provide more in use value for the cash you recieve from your customer.” This mantra applies to all the facets of life either as a businessman, an employee or a husband. Thanks for the kind words.
Shilpan
Great article, I agree passive income is vital.
a great fried of mine started buyin stocks at 22 , he’s 60 now. His only criteria was 1) it had to be a fortune 500 co. 20 It had to pay out divedends more than 1.00 a year. He enjoys reciving about 65,00 in dividend income each year.
On frugality . It’s ok to be a good spender but not at ythe expenxe of anther. My boss will haggle anyone down to nothing. Oddly most company’s wont do biz with him. Being a fair buyer creates good relatiuons and faith as well as respect.