Article Table of Contents
- Job Stability
- Steady Savers
- Save The Raise
- Investors
- Not Afraid To Ask For Advice
- Pay Off The Mortgage
- Don't Indulge In Fancy Toys
- Good Credit
- Goal Setting
- Real Estate
A record of 10.4 million households had a net worth of $1 million or more in 2015, according to a 2016 study. That’s indeed a lot of millionaires! But would you really know if a millionaire was standing next door? While your mind may conjure up the jet-setting rich that are the subjects of many over-the-top reality shows, the truth is that you might already know many more people with a net worth of over seven figures.
Every-Day Millionaires
- JOB STABILITY: Against popular belief, there are numerous millionaires who were never handed a trust fund, nor did they make a million dollars overnight during the internet boom. They are people who stayed with one employer for a very long time—sometimes 30 or 40 years. Staying with the same company for many years can offer big time rewards, including a very nice ending salary, significant pension benefits, and fat 401K balances. While it seems allien to think about working for the same employer for two decades or even longer now a days , there are still a number of people who do it, including teachers and other government workers.
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STEADY SAVERS:
The majority of rich retirees began making the maximum contribution to their 401(k)s in their 20s or 30s. Keep in mind that every little bit of dollar you put into your 401(k) is pre-taxed, which is a huge benefit. Additionally, many companies offer matching contributions,which is free money to you. Ensure to check with your human resources department to find how much you need to contribute to receive the match. In 2015, contributions limits have increased by $500, and you can save $18,000 in your 401(k), 403(b), 457, or the federal government’s Thrift Savings Plan. The catch-up contribution limit for anyone who turns 50 in 2015 will also increase, from $5,500 to $6,000 (for a maximum contribution of $24,000). - SAVE THE RAISE:
One of the happiest moments in all of our working careers is the day we’re told we're getting a raise. While its real time easy to go out there and spend the extra money on a new boat or vacation, one trick I’ve seen these savers use is saving at least half of pay raises. Those dollars can end up in retirement or brokerage accounts, compounding, to give you more money later. - INVESTORS:
Millionaires who own stocks normally tend to hold on to their investments for decades (not just years). They let their dividends re-invest over time and thus participate in the long-term growth of the economy. This is what makes them different from “savers,” who only invest in CDs or money markets. - NOT AFRAID TO ASK FOR ADVICE:
Most of the millionaires are not a typical do-it-yourself (DIY) investors. They know what their strengths are, and if their strengths don't lie in investing and financial planning, they leave it up to the experts who do it correctly for them.
- PAY OFF THE MORTGAGE:One key “rich” person move—and a characteristic of the happiest retirees—is to get rid of the mortgage by age 65. This may mean making two or three extra payments every year or paying some bit extra on each monthly mortgage payment. This Bankrate.com mortgage payoff calculator can show you how extra payments can move you closer to a total mortgage free life, as well as how much interest you can save by increasing your mortgage payment.
- DON'T INDULGE IN FANCY TOYS: According to the Spectrem Group, which has been tracking and polling the nation’s richest households for years, “millionaires tend to be conservative with their spending and aren’t out there buying mink coats and jewelry every day.” Very few millionaires own BMWs, Mercedes, $3,000 watches, or $5,000 suits. Nearly 40 percent of the “rich” buy second hand cars.
- GOOD CREDIT: The better your FICO score, the lower the interest rates you will have to pay on your mortgage and car loans. The “rich” do this by carrying very low debt loads.
- GOAL SETTING: Rich people don’t just stumble upon success. They plan out and prioritize their goals and determine how to get there , execute them. Millionaires have indeed a very clear vision of what they want and take the correct steps necessary to get there.
- REAL ESTATE:
Most “rich” people buy homes that are not overly priced or extravagant in rentable areas. They maintain them appropriately or rent them out consistently. They pay down their mortgages and ended up with cash-flowing assets that help to build their net worth slowly over 30 years.
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