Self-made millionaires have a lot in common besides a million bucks and a fat wallet. Do you want to be the millionaire next door? Which neighbor of yours is a likely candidate? The one with the brand new car? Biggest house on the block? Well, could be but not likely.
Who is likely the millionaire next door in your neighborhood? Likely the neighbors that follow simple habits that start with investing in themselves.
Invest in Yourself, Education
First and foremost, I’m not talking about an advanced college degree. In fact, I know several millionaires that never attended college at all. But, they told me they spent time reading books on finances at an early age and continued doing so. They also adopted the habit of learning something new about building wealth every week.
Funny thing is, they all have a library card and often check out audio books online. Education is key. There are an unlimited number of resources available to educate yourself, such as:
- Go to the library (browse the financial, real estate, and personal development sections)
- Read financial articles, magazines, and blogs (I do this every morning using Google News)
- Learn a new skill or enhance your existing skills
- Increase your earning power through continuous education and training (then ask for a raise or get a better job)
If your employer isn’t investing in your personal development, consider finding a new employer. My first three employers sent me to a slew of personal development classes and they paid for it! Subsequently, I decided to continue learning new skills on my own. Using YouTube videos and blogs, I taught myself WordPress, CRM, SEO, email marketing, PowerPoint, Microsoft Publisher, Access, financial modeling, and so on.
Repetitive in your face advertising makes you believe, “I want that” and “I need it now” – the millionaire next door says, I don’t. They separate their “needs” from their “wants” and defer purchases. Millionaires do their homework and research similar products at a lower cost before they buy, and they buy used. They buy new only when the price is right. They use coupons and discount codes to get a better deal or they don’t buy. In addition, they don’t buy at all if they haven’t reached their monthly savings goal. Why? Because they are millionaires after all.
How Long Will a Million Last in Retirement
Research by Go Banking Rates indicates it will last a lot longer in some states than others. In my home state of Virginia, they say it will last around 19 years.
- Annual groceries cost: $3,880.71
- Annual housing cost: $10,395.63
- Annual utilities cost: $3,756.52
- Annual transportation cost: $4,156.51
- Annual healthcare cost: $6,611.54
- Total annual expenditures: $51,572.04
- How long $1 million will last in savings: 19 years, 4 months, 17 days
SOURCE: Research by Go Banking Rates – How Long $1 Million in Savings Will Last in Every State
NOTE: Can you live on ~$52,000 per year in Virginia? Personally, I don’t think that’s a reasonable budget for most retirees. The assumptions used by Go Banking Rates to calculate the cost of living per state are not clear but assume the cost of living is reduced by the average social security benefit (say, ~$1,500/month or $18,000/year). Adding in the social security results in a expense budget of $70,000/year; a bit more realistic for retirees in Virginia IMHO.
Kiplinger Article: 9 Secrets of the Millionaire Next Door