Note on the picture above: Usually these kinds of posts have an image of a millionaire with expensive clothing, sports car or a mansion etc. That is not the reality of the majority of millionaires. Continue to read and you will understand what I mean.
1. Live below your means
This means that you don't spend everything you earn each month. Instead you save and invest the difference between monthly costs and income. It also means not buying luxury things such as expensive brand clothing, trips abroad, eating out, ongoing beauty treatments, always the latest technology and so on. At least not in the beginning of your money journey. When you are older and hopefully have built considerable wealth, then you can spend more on these things.
2. Know your numbers
Knowing your numbers is very important to build wealth. Otherwise you don't know how much you own, owe or spend on a monthly basis. The key thing here is to track your net worth. This is the number you get when you sum up all your assets (house, stocks, bonds, etc.) and subtract your debt (mortgage, student loans etc.). This shows the overall health of your money situation and the amount of financial freedom you have.
3. Be organised and delay gratification
In order to build wealth you need at least a basic level of organisation. Meaning that you have documents that helps you keep track of your numbers. You look at them, update them and so on. Millionaires also keep a budget and save up for things BEFORE buying them instead of paying them off afterwards.
4. Focus on buying assets
Instead of buying luxury things they focus on buying assets. This can be investment property (e.g. an apartment or house to rent out), stocks, bonds, mutual funds, land, gold funds, real estate investment funds etc. These assets help them to put money back in their pockets and build wealth.
5. Be frugal
Millionaires who have themselves made their own million/s are most often frugal. This means being aware of what things cost, like food, transport, housing costs etc. They then aim to go for the less expensive alternative to keep their costs low. Keeping your costs low allows you to have more money for investing. Don't be afraid to bargain and hunt for deals. Living frugally also means that you focus on the things you value and save on everything else. Let's say you value traveling, then you can save up for it a long time in advance and then do frugal traveling like home swapping or backpacking.
6. Focus on the long term picture
This is another example of delaying gratification. Stable and safe investing is not really exciting at all and you don't see a lot happening the first 8-10 or so years. Then it can grow really nicely with compound interest or the cashflow of rental properties or some other dividends. The payoff from assets are normally tiny in the beginning of the investing career. The trick is to stay the course the first couple of years, often with a lot of hard work and some sacrifice.
7. Do what others don't want to do
This brings us to the last millionaire habit. They often do what most people don't want to do in the following areas:
They work on a business instead of having leisure time* e.g. weekends and evenings
They get up early in the morning instead of sleeping in
They read instead of watching TV
They do their own cleaning, gardening, beauty services and fixing things instead of paying for these kinds of services (in the beginning of their investment career).
* please remember to also get enough rest otherwise you will get burned out pretty quickly.
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