Yahoo Finance 4 simple daily habits to become a millionaire
I was asked recently what someone should do if they knew their money life was in chaos but they want to change all that to become a millionaire? I answered that although it’s a big task to change anyone, it is possible to go from chaos (where the chance of building wealth is minimised) to establishing order and getting the snowball of wealth rolling. And yes, you should end up a millionaire.
However, there has to be a commitment to a new way of living.
That’s right. If you live in chaos, you have to live orderly to change that. And by following processes, the end result will be success.
You don’t get richer in a day but through daily habits.
So let me show you what a ‘getting your act together’ plan for day-by-day improvement looks like.
You’re going to have to write down your plan and put it somewhere you can see daily, so it will remind you that you’re changing and will soon be another person when it comes to money.
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I’ve seen many people’s lives in financial chaos a lot. These are the questions our financial planning advisers first ask our clients:
What are your money goals? (Write them down.)
Are you on track to make them happen? (Yes, no or I don’t know!)
What are you prepared to do to make them happen? (Follow my advice!)
This is what our advice often ends up being:
Let’s do a budget to see where you earn and spend your money. (Can we increase your income and/or cut your costs?)
This is what you should be able to save and we’ll ensure you save this in order to build up an amount of money that will be invested to grow your wealth.
Here are the investments that the normal person doesn’t access. It’s why they don’t end up with abnormal amounts of wealth.
Are you paying too much tax? And can the Tax Office help you to invest in wealth-building assets?
What are those investments?
Salary sacrifice allows you to get a maximum $25,000 a year into your nest egg. With salary sacrifice, if your boss puts $7,000 out of your annual wage into super for you, you can salary sacrifice extra money out of your pay up to $25,000 and add it to your super. In this case, the person could add in $18,000! And wages that could be taxed at 19 per cent, 32.5 per cent, 37 per cent or 45 per cent would only get taxed at 15 per cent, before ending up in super. So you get more into super, which will help you get rich. It means you have to make some sacrifices but people who want to be comfortable in the future actually do make sacrifices.
Make sure you’re in the best performing super fund that doesn’t overcharge you. Many comparison websites will help you find the best super funds.
Should you set up a self-managed super fund? This depends on age, how big your super balance is and whether you want to run your own super.
Exchange traded funds mean you can invest in the stock market very easily nowadays. You can, for example, invest in Australia’s top 200 companies in virtually one ‘stock’ called an ETF, which you can buy into with online stockbrokers.
This chart shows you how the S&P/ASX 200 Index has grown over time and an ETF that tracks this Index can help you grow your wealth.
I love this chart. It is complicated but it shows how over 30 years $10,000 became $141,110 and if the starting investment was $100,000, it would’ve grown to around $1.4 million. While $50,000 would’ve been about $700,000.
These big numbers have happened despite dotcom crashes, the GFC, September 11 attacks in New York and Donald Trump’s trade war with China.
These big numbers should be a powerful incentive to change your approach to money and be committed to saving, investing and getting richer.
As I always seriously joke: “If anything is worth doing, it’s worth doing for money — lots of it!”
Are you a millennial or Gen Z-er interested in joining a community where you can learn how to take control of your money? Join us at The Broke Millennials Club on Facebook!
