Why the 'millionaire mindset' works and can help you become rich
It doesn’t matter where you started. It matters where you finish
Let’s talk about generational wealth. When you hear that term, you might picture “old money” or a huge fortune that gets passed down through the family line and think, But my family never had that kind of money. How could I ever build that kind of wealth on my own?
Well, here’s some truth. It doesn’t matter where you started. It matters where you finish. It’s never too late to start building a legacy to leave for your future family, so here are four of the most important things you can do now in order to build long-term wealth:
1. Make (and stick to) a budget
Having a monthly budget is a surefire way to stay in control of your money and use your income to its full potential. An easy way to start budgeting is by downloading a free budgeting app (like EveryDollar), where you can enter all your income and expenses for the month and keep track of your purchases.
If an app isn’t your thing, you can do it the old-school way on paper or a spreadsheet. It doesn’t really matter, as long as you make sure every single dollar of your income has a job to do.
NEED TO BORROW MORE MONEY? HERE’S WHAT TO CONSIDER FIRST
2. Live below your means
Believe it or not, the key to wealth-building isn’t a high income. Your income is a tool for wealth-building, and a high-paying job won’t hurt. But what’s even more important is margin (that’s how much you have leftover at the end of the month). In order to have a lot of margin, you need to live on less than you make.
How do you do that? Use your budget to set limits for yourself, and then stick to those limits. For example, the recommended amount to spend on housing is 25% of your income. Or, you might choose to set your housing budget at 15% so you’ll save more. You could buy generic at the grocery store (even if you know you can afford name brand) in order to cut back on food costs.
5 STEPS TO TAKE AFTER PAYING OFF YOUR CREDIT CARD DEBT
It’s all about finding creative ways to save instead of spending all your money just because you can. This is the millionaire mindset.
Before you start investing, make sure you’re completely out of debt and have saved up three-to-six months of expenses in a fully-funded emergency fund.
Then start contributing 15% of your income to a 401(k) if your company offers a match, or open up a Roth IRA. Once this step is complete, you’ll be free to start tackling your bigger savings goals, like saving for your dream house or your kids’ college fund.
GET FOX BUSINESS ON THE GO BY CLICKING HERE
4. Stop comparing yourself to others
You’re more likely to go over your budget and spend money on things you don’t need when you’re trying to keep up with someone else (or someone else’s Instagram feed). That person might look rich, but you have no idea if they actually are rich. They could’ve put all their fancy stuff on a credit card!
It’s always better to have money than just look like you have money. So, take a chill pill, get off social media if you have to, and stay focused on your own financial goals. You’ll be a lot happier, and you’ll reach your savings goals a lot faster.
I sat down with some friends to talk about wealth-building on a recent episode of my show, so check it out for more tips on stacking that cash. You’ve got this!
Since 2003, Anthony ONeal has helped hundreds of thousands of people make smart decisions with their money, relationships, and education. He’s a #1 national bestselling author of "Debt-Free Degree" and national bestselling author of "The Graduate Survival Guide." He recently released "Destroy Your Student Loan Debt." He travels the country spreading his encouraging message to help teens and young adults start their lives off right and people of all ages succeed with money. You can follow Anthony on YouTube and Instagram @AnthonyONeal and online at anthonyoneal.com or facebook.com/aoneal.