Thursday, February 25, 2010, AM | Leave Comment
You can be a millionaire if you are making at least $350,000 a year.
The years it will take you depend on how much you save and how much you spend.
If you want to be one and stand shoulder-to-shoulder with your new peers, then spending less than you make is one way to do it.
Statistics tell us that more than a third of all millionaires made their money by running their own business. Another third had a professional practice or worked in the corporate world.
Doing research for this article, I found out a few things and I like to share them with you. The following points show you how an overwhelming majority of the millionaires became what they are today:
Making judicious use of debt
The millionaires would take out loans to build their businesses. They don’t spend it on anything else. They follow strict business ethics.
Avoiding high-interest credit-card debt
The millionaires know how to use credit cards wisely. They use them for the convenience, help build good credit, and prove useful in emergencies.
Leveraging their home equity to finance purchases for the business
The millionaires know home equity must be used to increase their wealth by putting the money into their business. They know at that time that their cash flow could not support the business.
Not tying up their wealth in their homes
Home equity represents very little of millionaires’ total assets, according to TNS. The millionaires always want to have a mortgage to take advantage of the tax deductions for the interest they pay on the loan. [See argument contrary to it down below under In a Nutshell.]
Millionaires are also seemingly not discouraged by failure
The millionaires learn lessons from their mistakes. If and when they fall, they always get up and start with new vigor.
In a Nutshell
There are other folks whose style is quite different for living. They might not be millionaires per say but live quite a comfortable life not only before but during retirement as well.
- They live within their means and are debt free
- They do not buy into the “bigger home” nonsense that went on in the country for sometime
- They accelerate paying off their house as soon as they can [Contrary to some millionaires do]
- They only use credit cards as 30 day cash, paying off their bill in full each month
- If they can’t buy something and pay for it when the bill comes in, they don’t buy it, period.