We often wonder what it is we don’t do that millionaires do? We sometimes think millionaires become millionaires due to luck or some favorable circumstance. Well, I am here to tell you otherwise. Millionaires do several things we don’t do, but should be doing.
Here are a couple of key things you should be doing.
Learn about money.
It’s unfortunate but our school system does not teach much, if anything, about personal finance. It’s even worse in college, where students are bombarded with credit card offers on a regular basis. You need to become financially educated. Learn as much as you can about eliminating debt, saving, and investing by reading books, going to seminars, on the internet, etc.
Learn to recognize opportunities to make money.
Here is a quick example of how I am always on the lookout for new business opportunities.
During breakfast this morning I was speaking with another right-of-way agent who is friends with a jazz musician. He told me how the musician had developed a piece of software to manage bands. I asked how it was selling?, Not very well, he said. I asked if his musician friend would be interested in talking to me about licensing or selling me the software. We have a call this weekend.
Based on questions I asked, I know the software is not being marketed properly. The name of the software is all wrong, he’s not doing any affiliate marketing, no Adworsd campaigns, etc. If the software is good I know I can make money on it. I will keep everyone in the loop on this one.
Buy assets, not liabilities.
An asset puts money in your pocket, a liability takes money out of your pocket. A car, and a boat are liabilities. Not only do they go down in value the minute you take possession, they cost money to maintain.
A mutual fund, a well-run business, an IRA, a rental property are assets as they put money in your pocket. Some believe, as I do, that your house is a liability and not an asset as we are sometimes led to believe. A house is only an asset to the mortgage company.
Delay Satisfaction
The poor and middle-class do not know to delay satisfaction. They want things now and are willing to get into debt to get it. The rich will wait to get things or will buy assets that generate income so they can buy the things they want. The rich don’t get into debt.
In conclusion, make it a point to follow the above and you too can become a millionaire.
6 responses so far ↓
1 Russell // Oct 26, 2005 at 10:45 am
It is very important to learn about money, especially young. That’s why I’m here!
Good luck on the business oppurtunity! I can’t wait to hear more about it and how it turns out!
On the note of rental property, it’s too bad they aren’t a bit cheaper for younger individuals to get into.
2 Ray // Oct 26, 2005 at 11:45 am
Russell, Thank for your comments. Also check out this post that I just put up.
3 Empty Spaces // Oct 27, 2005 at 1:36 am
I couldn’t agree with you more on every single point.
I spent 6 months convincing my wife that our house was a depreciating liability and that we should sell it. it went down 20k during that period, but i still made out like a bandit.
I’ve spent the past several years educating myself about money and investing and its paying off hansomely. I find myself being treated to lunch by wealthy business owners who would like to invest but don’t know how or where to start.
I don’t have any debts or balances other than mortgages on my rentals. I constantly tell my friends who suggest I should upgrade my TV from a 19 inch that if I had another thousand bucks, I’d buy another house!!!! besides, when I can lend money at 36%, buying stuff seems like such a waste!
4 Hector and Marisol // Oct 27, 2005 at 8:02 pm
Hey Ray and Tami what you doing? I like………….
5 Alexander Kintis // Oct 28, 2005 at 3:07 pm
About mutual funds, aren’t the returns not even noticable? I mean, investing 1K and getting maybe earning 20-100 a year later, is nothing - in my eyes. Same with stocks, the returns are so low and you only make out well if you invest a ton of money and a stock does well - and that’s not even true 100% of the time.
I don’t have much experience in that area of finance, but from what I’ve heard, there are bigger returns in real-estate. Am I wrong on this?
If you can, please comment on both, because if you make a valid argument regarding stocks/mutual funds, I’ll take a look at my options and see what I can afford.
Thanks.
6 Ray // Oct 28, 2005 at 6:59 pm
Alexander,
Mutual funds, with a good track history average about 15%. You are right in that you do need a lot of money to make a sizeable return, but keep in mind that mutual funds are just another tool to bring about wealth. I find that mutual funds, if you pick the right ones have less risk, than single stocks. I stay away from single stocks, too much of a gamble. Mutual funds spread the risk and are professionally managed.
Also for someone who doesn’t have the tolerance for real estate, and if they are young, (early twenties) can put $100 per month into a mutual fund and when they are ready to retire will have quite a large sum of money.
Real estate has bigger returns, but it depends also on what type of real estate investment you do. Flipping houses has a very good return, holding real estate is also a very good strategy.
You know the old saying, “Don’t put all your eggs in one basket” It surely applies to investments also.
Regards
7 Mutual Funds Debt // Mar 10, 2008 at 6:07 am
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