The money mindset and traits of self-made millionaires
So Over Debt had a guest post that listed out traits of millionaires:
- Millionaires Possess Self-Motivation and Drive
- Millionaires Save Their Money
- Millionaires Invest in the Stock Market
- Millionaires Are Frugal With Their Money, and More Frugal With Their Time
They have self motivation and drive
While I like reading these posts to see how I benchmark against these self-made folk, I am always cautious to point out that you don’t always have to be an entrepreneur to make money and/or become a millionaire.
Anyone in any kind of job, can have “self motivation and drive”, it isn’t just business owners.
I know this sounds odd coming from a self-employed person, but I honestly believe I would act the same in either setting — I’d probably just have more of an incentive to make my own business grow better and faster than someone else’s 😉
Also, not all business owners become millionaires. I think the stats are that 90% of new businesses fail before their first year is up.
Food for thought.
They save their money
If they didn’t, how would they become rich?
The article points out that they save about $39,000 a year.
Again, I’d like to point out that they make a damn good income to be able to save that much a month.
We should also consider that this means they save $3250 net a month, which is guesstimated at $6500 gross earnings a month.
Then if you think about their living expenses on top of that, they must earn at least another $4000 gross ($2000 net) to cover what they spend.
In total, their earnings are about $10,500 a month to net $5250, assuming they spend $2000 on expenses each month, to be able to save $3250 every month.
Not everyone makes that kind of money, but everyone CAN set their own savings goals based on their own personal net income each month.
I personally set a goal like that for myself — I net about $7500 a month, and I’m aiming to save 50% to 75% of it ($3750 – $5625), or as much as possible.
I always play around with the budgets and I estimate “what if” scenarios so that I can estimate how far I can go and how much slack I have to still be able to meet my goals.
They invest in the stock market
The article makes a point that they invest during and after a recession (e.g. 2008).
I’ve done something similar, putting most of my cash reserves (emergency fund) into the stock market. I’ve seen some decent returns as a result, and I am optimistic the market will continue to pick up.
They’re frugal with their money and their time
I don’t think that they’re Trent Hamm (of The Simple Dollar) frugal, but they do watch their expenses closely by making sure their food budget doesn’t spiral into the thousands.
My idea of being frugal is watching what I spend each month but not beating myself up over losing 2 seconds of oven heat and wasting $0.02 a minute.
The only things I do that would be remotely frugal, are things that I do because it’s the healthier and better choice for me, not because it’s cheaper.
List of “frugal” things I do, but not just because of what it costs me:
- No dryer sheets — Did you know that they have animal fat in them to give that silky feel?
- No detergent — I don’t see the difference with or without, and I think the harsh chemicals weaken the fabrics
- No hair dye — The chemicals are awful and they burn my skin
- No hair products — Except for shampoo (without it, my hair produces a lot of dandruff)
- No nail products — Short, clean, trimmed; I don’t need polish or anything fancy on them
- Haircuts twice a year — Am trying to grow my hair longer and it doesn’t really get wonky
- No perfumes — Tried, but then my skin started reacting to it & bugs were biting me
I have yet to think of a word for that — I am partial to: “being spending-conscious” rather than “frugal“, because I don’t really think that I’d qualify to be able to hang with that crowd.
For instance, I know when I get crazy in my spending and I have to rein myself in, but I also remind myself that I do save a big chunk of my net income and I am more than financially stable for my age.
They also don’t seem to watch a lot of TV (pointless?) and I only watch TV if I’m about to fall asleep and I need something to numb my brain.
I will however, admit to watching a LOT of TV shows, but I choose WHEN to watch them (as purchased iTunes episodes for instance, or streaming them online) rather than having the TV schedule define my life and staying up until 10 p.m. just so I can watch ‘Castle’.
If that’s what millionaires do, then we’re on the same page!