Practices of Self-Made Millionaires
I teach high schoolers in a small city in South Texas. I recently got the writing bug, which is why I am here now giving some insights and also trying to earn money with this side hustle, because, I don’t know if you’ve heard, teachers at public schools in Texas make very little money… as in living paycheck to paycheck. So it came as a surprise to me to find out in the report from Ramsey’s 2022 National Study of Millionaires that teachers were listed in the five careers that produced the most self-made millionaires (?!?!) along with engineers, accountants, management, and attorneys. What is going on?!
There are nearly 22 million millionaires in the U.S. that account for 8.8% of the country's adult population.
Most people tend to think that those millionaires stem from family and generational wealth, but Ramsey's study determined that 79% didn't receive any inheritance from parents or other family members, but instead were self-made. Further research showed me that self-made millionaires have the discipline to turn their dreams into reality. Common practices of self-made millionaires include consistent saving and investing, goal-oriented planning, continuous learning, strategic networking, and risk management.
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Consistent Saving and Investing. High net worth individuals good money habits. Consistently saving and investing their money. They have a discipline set aside a portion of their income for savings and investments. This habit regardless of market conditions. I've learned that a general rule of thumb is to set aside 20% for savings, retirement, and investments, if you are in your 30s.
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Goal-Oriented Planning. They set clear financial goals and develop a plan to achieve them. They regularly review and adjust their plans to ensure they are on track to achieving their goals.
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Continuous Learning. High net worth individuals understand the value of continual education. This includes expanding their financial knowledge. This also serves their next employment opportunity. Long gone is the idea of getting that job right out of college and sticking with it until retirement. Instead, they are willing to move to the next opportunity for growth.
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Strategic Networking: They understand the importance of networking and building strong relationships with other successful individuals. They seek out mentors and surround themselves with other high achievers to learn from and be inspired by.
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Risk Management: They are proactive in managing risk, and accept that with higher returns comes higher risk. They diversify their investments, use financial advisors, and take steps to protect their assets through insurance and other risk-management strategies.
Following these strategies are a good start, my main takeaway is that most self-made millionaires (94%) live below their means. Over 75% report that they have never carried over limit balances on credit cards. This is completely contrary to the idea of keeping up with the Joneses. Self-made millionaires do just that - oppose the idea of keeping up with the Joneses.
Some Self-made millionaires buy cars and use them long-term. They rarely go out to eat (polls show that they spend less than $200 per month at restaurants). They refuse to be suckered into “bad debt” such as credit cards, car loans, and personal loans. Furthermore, one-third of all self-made millionaires never made six figures for any year of their entire lifetime; they just continued to live below their means. I suppose that if I live by these rules then it is actually possible for me, a high school public teacher, to become a millionaire!
One of the things I like about this side hustle is I get paid to do research on things that will help me and my family get our finances on the best track. Thankfully, I also get to work with the mad scientists like Sean, Gloria, and Dan behind the scenes on all the money knowledge, which helps me realize that I am ready to start my journey of becoming a self-made millionaire. I will keep you posted!! In the meantime, if you have questions, or are already at the self-made millionaire status and need help with management or planning, be sure to drop us a line at Nest. We are here to help.
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