I believe that getting advice from an expert in a certain field gives us the opportunity to make wise decisions. Millionaires especially self-made millionaires have the best advice when it comes to the topic of money.
Learning the habits and money saving tips of millionaires gives us the chance of knowing where to invest. This is because millionaires have seen it all when it comes to money, they know about budgeting, debts and how to build wealth, whether it be through a let to buy scheme to build a property portfolio, or through diversifying their income streams.
Here are five money tips from different millionaires.
Having Multiple Streams of Income
Majority of millionaires have multiple streams of income, they can be in farming, finance, real estate and even stock investments. A study that was conducted showed that more than 65% of millionaires had three income streams and 45% had more than four income streams.
We should all know that having one job will never get us to the level of millionaires. Different millionaires also advise us to employ qualified people that can manage our different sources of income so that we don’t end up losing our money instead of making profit.
Spending Money Wisely
Spending money well is a common money tip that most of us fail to follow. We fall into this trap by doing impulse buying and buying stuff that we don’t need so that we can keep up with our family and friends.
Different experts advise that we can spend money in a good manner by ensuring that we; buy our goods in bulk, reduce the urge of wanting spending and live by our terms. Most millionaires maintain a frugal budget.
A frugal budget doesn’t mean buying cheap products but it means spending money on high quality services. A simple way of achieving a frugal budget is comparing prices of different products. Waiting for price drops is also another way of getting a high-quality product at an affordable price.
Creating an Emergency Fund
I always ensure that I have an emergency fund. There is no millionaire that doesn’t have an emergency fund. Unexpected problems like car breakdowns happen in our lives daily and by having an emergency fund we can solve the everyday problem without using our saved money.
The emergency fund also prevents us from taking extra loans. Most finance experts recommend a six-month emergency fund.
The ideal way is ensuring that we have investments spread in different places for example stocks, bonds or the investment plan of our choice. Most millionaires say that they have investments in different places and advise us to do so.
Investments can be for short-term or long-term goals. However, having long term investments is the best because we can depend on that investment in the future. Majority of millionaires advice that real estate investment is the best for long term goals.
Before investing we should also know the risks that we are taking. If chances of losing the money are high then there is no need for investing.
Following the 50-30-20 Rule
The 50-30-20 rule gives us the opportunity of reducing the problems of complicated budgets. We can follow this rule by saving 50% of our earnings, using 30% of our earnings for our common expenditure and 20% for our recreation.
This is a simple rule that most millionaires swear by. It’s also not a must that we follow this rule, we can still look for other ways of managing our budgets in the manner that we don’t feel tightened.
Following money tips from different millionaires is not the only way of learning secrets of wealth creation but it is the best way. The above money tips will help us in learning more ways of managing our money.