13 Lessons From Millionaires

Laura Gariepy  Mon, October 21, 2024   GOBankingRates

13 Lessons From Millionaires That Financial Planners Use To Help Others Get Rich

Financial planners have seen it all while working with clients — from financial ruin to financial freedom. Over the years, they’ve learned what separates millionaires from those who struggle to get their monetary footing.

Eight of them shared the insights they’ve picked up from clients in the seven-figure club that they now use to help others build the life of their dreams. Here are 13 of those lessons below, and when you’re done, check out these lessons too.

Create a Financial Plan

Joe Petry, CFP and founder of Mayfair Financial, said, “My wealthier clients have figured out that having a plan can make a big difference. Lower taxes, maximized Social Security, and a sound investment approach can represent a million dollars or more over a 30-year retirement.”

He added, “Having a [financial] plan can also save us from ourselves. Our financial decisions are emotional, whether we realize it or not. A plan can help us avoid trying to time the market or putting too much of our nest egg in one or two hot stocks.”

Limit Debt

Limiting the amount of debt you carry to a mortgage and maybe an auto loan is key to building wealth, said David E. Barfield, CFP and founder of Datapoint Financial Planning, LLC.

However, if you’ve got other types of debt or your current debt prevents you from saving for the future, don’t panic. You can take control by implementing one or more debt repayment strategies.

Maintain an Emergency Fund

Barfield also recommends building and maintaining an emergency fund. That way, you can cover urgent, critical expenses with cash. While everyone’s situation is different, the consensus is that you need at least three months’ worth of living expenses stashed away.

However, if that amount feels impossible to amass right now, squirrel away what you can. Some money in the bank is better than no money in the bank.

Live Below Your Means

“A common trait among millionaires is living below their means,” said Jorey Bernstein, founder of Bernstein Investment Consultants. “To cultivate wealth, focus less on your income and more on your spending habits. Budgeting isn’t about limiting your freedom; it’s about making your money work effectively for you.”

However, as you look for ways to improve your spending habits, be aware that you can slash your expenses too far. If possible, don’t reduce your insurance coverage or skimp on healthcare. Doing so could cost you more money in the long run.

Prioritize Your Spending

“I have a single female multi-millionaire client,” Petry said. “She never had a particularly high-paying job. Her superpower is knowing what things bring her joy and what things don’t. She doesn’t value a big house or lots of new clothes. Cruises are her passion.

TO READ MORE:  https://finance.yahoo.com/news/13-lessons-millionaires-financial-planners-110024932.html