We’ve all heard of self-made millionaires. People like Mark Zuckerberg who became the youngest billionaire, Steve Jobs who turned Apple into a global sensation and Warren Buffet who still continues to work at age 83. They weren’t born with a silver spoon in their mouths but they did have an advantage that they used wisely to get to where they want to be.
Maybe your dream is not to be a multi-millionaire or to see your name on the Forbes list. Maybe all you want is financial freedom. Whatever it is you desire financially, the key is correct money management. There are no better people to learn them from than self-made millionaires. Below are six lessons about money that should try to incorporate in your life if financial freedom is what you want.
Set a Goal
As the saying goes, you won’t know where you’re going unless you have a destination in mind. Same goes with your finances. You need to have a goal in order to know your course of action. Some would say you have to set huge goals but we’d advice you to stick to realistic and doable goals while also not shortchanging yourself.
When setting goals, be specific as much as you can. For example, don’t say you want to earn more money this year. A much better way to put it is to say, I will earn £100,000 this year.
Work for Yourself
To be truly financially free and maybe become a millionaire along the way, you need to work for yourself. That doesn’t mean you should quit your job now. But it makes sense to consider going into business if you want a source of income with endless potential.
Most self-made millionaires, for instance, do not have just one source but several businesses because they never rely on only one flow of income. In other words, don’t merely rely on your income to get by. Find other ways to widen and increase your stream of income to be financially free.
Pay Yourself First
Unlike the poor, self-made millionaires don’t think about their income as something they should spend. Instead, they see money as tools for savings and investment. Before spending the paycheck you haven’t received yet, get on board with the financially free people who pay themselves first. A good rule to follow is to set aside 10% of your income for savings. If you can’t handle 10%, start small then. The point is not about how much you save but it’s about developing a saving habit.
Live Within or Below Your Means
Even if Warren Buffet can afford to buy a castle, he continues to live in the same house he bought for $31,500 in 1958. He may be one of the richest people in the world but he stays frugal because that’s just how self-made millionaires roll. At the end of the day, frugality coupled with hard work and smart investing is what will get you to your bottom line.
So live within your means. If you can, live below your means. Whatever money you don’t spend on unnecessary things, you can save and invest for the long term.
Invest for the Long Term
Another distinction between the poor and the rich is the latter’s ability to look beyond the now. While most of the world focuses on earning one paycheck after another, self-made millionaires invest for the long term. Even if they won’t see the dividends for 25 years or longer, they continue to save and invest month after month because they look at the long term benefits and never the short term hurdles.
If you want financial freedom then this is one habit you need to strive to develop. It’s going to be hard but it’s all worth it as what all self-made millionaires will tell you.
Connect with the Right Peoples
Another lesson we all should heed from self-made millionaires is to surround ourselves with like-minded people. Connect with people who have the same goals as you. Hang out with millionaires if you know some then learn from them. You can’t learn the ins and outs of making money, after all, unless you learn and emulate people who’ve been there and done that.