Do It Yourself Millionaires
I have to admit I am a sucker for those home improvement shows where some good looking woman drops into a wreck of a house and renovates the thing in one thirty minute episode. Having renovated a few homes and done more than my share of “projects” I know nothing gets done in thirty minutes and nothing gets done right the first time. And the only good looking woman that helps me out is my wife. But I watch the shows anyway out of envy and do pick up a tip once in awhile.
I also look for financial DIY tips and Fidelity came up with ten regarding millionaires. Actually they are not tips but characteristics. Some I agree with and some I don’t. And they don’t relate only to millionaires, they relate to anybody that is making it or, more importantly, wants to make it. Here are the ones I agree with. If you want to see the other ones, call Fidelity.
First, the rich don’t think they are rich. Most act like the wolf is still at the door and shop accordingly. They do so because the vast majority came from middle class backgrounds. Watching your spending at all times is the key to financial success.
Secondly, they took risks and borrowed money to do so. I don’t dislike debt. I dislike what people do with it. I consider debt to be great for 1) buying a car to get to a job where you make money to pay off the car, 2) buying a house but a house you can afford to pay for out of your cash flow and 3) starting a business. If you can convince somebody to lend you money to start or buy a business, you probably have a pretty good shot at success.
Thirdly, rich people know how to work the tax system. Not through fraud but by owning their own business. Half the millionaires in this country own their own business. And they deduct everything because they are taking a lot of risk and the tax code rewards risk. See that cup of coffee you are drinking? Deductible, if you own your own business. And you can get the breaks even if you start out part time while keeping your day job. Of course, there are limits but that is why you hire a good tax accountant to keep you out of trouble.
Fourth, most successful people were B students. At best. Boy, was I glad to read that one.
Fifth, and most important, successful people are happier. Depression and mental illness for wealthy people is way below the norm. The same goes for physical health. Being broke is not good for your health and it is hard to have a bright outlook on life if you’re carrying around $30,000 worth of credit card debt at 25%. One analyst put it this way—“It’s the freedom that money buys.”
Or as Albert Einstein put it, “The lack of money is the root of all evil.”