Yahoo Finance 7 unexpected habits of millionaires
If you picked the brains of more than 100 millionaires about how they grew their wealth, chances are you’d learn a thing or two.
That’s exactly what the anonymous author of ESI Money – a blog on earning, saving and investing to become financially independent – did; and he picked up a few lessons he expected to learn, and some he didn’t.
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After interviewing 150 millionaires, here are some unexpected lessons he learnt that he shared in a blog post:
1. Millionaires started out with low salaries
While people might say about millionaires ‘I’d be rich too if I made that income,’ it turns out wealthy people aren’t born with silver spoons in their mouths.
“Many started with very minimal paying jobs out of college and through hard work and talent grew that into a very sizeable income,” the ESI Money post said.
First of all, most millionaires spend most of what they make anyway, and second of all, it’s not as though millionaires have been making $300,000 for 30 years straight.
“Most began with minimum wage jobs (or close) and worked up from there. What we see are the results two to three decades later after a lot of hard work and dedication.”
2. Millionaires save less than you think
How much do you think millionaires save of their incomes? Perhaps 30, or 40 per cent?
“The truth is they save far less than I imagined,” said ESI Money.
“That said, I wouldn’t have thought their incomes were as high as they were either (I would have guessed $100k to $150k), so in the end, the absolute amount saved is probably the same.”
3. Millionaires make common investing mistakes
They fall for the same money mistakes that most other people make, too – and the top pitfall is investing, said ESI Money.
“Millionaires thought they were smarter than most others and thus made a lot of investing stumbles (mostly in the area of picking individual stocks),” the post said.
4. Not a lot of millionaires have budgets
With conventional wisdom saying that the first step to taking care of your money is to know about your ingoing and outgoing expenses, most millionaires actually don’t budget.
“Many sort of track spending and saving, but they don’t estimate and pre-determine spending in a budget.
“The reason? They don’t need to,” ESI Money wrote.
“They make good incomes, save a decent amount, and have plenty left over. They are naturally self-controlled and don’t let costs get out of hand. So why would they need a budget?”
However, before you throw out your carefully crafted spreadsheet, bear in mind that budgeting is most effective at the beginning and end of your career, but once you get settled, you’ll fall into a rhythm.
5. Not a lot of millionaires have wills
You’d think that millionaires have a game plan for their estate and the amount of wealth they have – but, like many average people, most don’t.
6. Not many of them give to charity
This one baffled ESI Money.
“Millionaires are in the position to give substantially, even doing so while they accumulate wealth,” he wrote.
“And yet most don’t. I’m really not sure why.”
However, of course, famous millionaire such as Bill and Melinda Gates, Mark Zuckerberg and Richard Branson are well-known for pledging to donate their wealth, with several wealthy individuals signing up to the <name of pledge>.
7. Most actually check their investment portfolios every day
Experts advise against watching the markets too closely for fear of making knee-jerk reactions, but this is a rule that most millionaires don’t seem to like to follow.
“Millionaires buck this trend with many checking their portfolios daily or at least weekly. And somehow they keep on the right path,” ESI Money wrote.
However, this will depend on the individual, at the end of the day.
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