If you are interested to know how millionaires live, I am very excited for you! Millionaires are the most successful people of our time and money is their ultimate passion in life. The lifestyle and spending habits of a millionaire has become a source of attraction and admiration to many. To understand how millionaires live we need to look at three areas: The millionaire’s spending habits, investments and attitudes towards money.
Whether you’re a millionaire or aspiring to be one, it’s always interesting to see how other millionaires live. Your own preferences for living might be completely different from those of other rich people. Some millionaires have a few houses scattered around the world, others prefer to travel as much as possible, and some even work from their own homes. Let’s take a look at how six millionaires live.
They’re frugal.
Frugality — a commitment to saving, spending less, and sticking to a budget — is one of the wealth factors that help millionaires build wealth, according to Sarah Stanley Fallaw, the director of research for the Affluent Market Institute and an author of “The Next Millionaire Next Door: Enduring Strategies for Building Wealth,” for which she surveyed more than 600 millionaires in America.
Many of the millionaires Stanley Fallaw interviewed stressed the freedom that comes with spending below their means.
“Spending above your means, spending instead of saving for retirement, spending in anticipation of becoming wealthy makes you a slave to the paycheck, even with a stellar level of income,” she wrote.
They save a lot of their income.
Being frugal and living in an affordable home enables millionaires to save. They recognize that income isn’t enough — they have to save what they’re making.
John, who runs the personal-finance blog ESI Money and retired at 52 with a $3 million net worth, has interviewed 100 millionaires over the past few years and found that the median millionaire spent $90,000 a year while earning $250,000 in income — a 64% savings rate. Saving it, he said, allows for investment.
While this savings rate might be slightly off because of things like not counting taxes as spending, the main takeaway, he said, is that millionaires “save a large portion of their income.”
If you make $250,000 and spend $250,000, “you are no better off at the end of the year,” he wrote.
They take on a side hustle.
Many millionaires favor moonlighting, or taking on a side hustle, according to Stanley Fallaw, who said it’s a good way to explore options while remaining employed full time.
“Those who are able to create multiple opportunities to generate revenue, who can translate hobbies into income-producing activities, will be successful at becoming millionaires next door in the future,” she added.
John also found that millionaires develop multiple streams of income, enabling them to grow their net worth exponentially, he said.
They invest in low-cost index funds.
According to John, millionaires also tend to use the same simple investing strategy: investing in low-cost index funds.
“The high returns and low costs of stock index funds (I personally prefer Vanguard as do many millionaires) are the foundation that many a millionaire’s wealth is built upon,” he wrote.
Experts agree that investing in index funds is a winning strategy when playing the stock market for two reasons: They’re broadly diversified, eliminating the risk of picking individual stocks, and they’re low-cost. Even Warren Buffett champions the strategy.
They put more energy toward personal-growth activities.
Millionaires also spend more time focusing on personal growth. They spend roughly 5 1/2 hours a week reading for pleasure and nearly six hours a week exercising, while the average American spends two hours and 2 1/2 hours on those activities, according to Stanley Fallaw’s research.
“Successful individuals are keenly aware of how they spend their resources, including their emotional and cognitive resources,” Stanley Fallaw wrote.
Similarly, Thomas C. Corley, the author of “Change Your Habits, Change Your Life,” spent five years researching the daily habits of 177 self-made millionaires and found they devoted at least 30 minutes every day each to exercising and reading. Millionaires tend to read three types of books, he said: biographies of successful people, self-help or personal development, and history.
They think more.
Corley also found that self-made millionaires are thinkers. The rich tend to think in isolation, in the mornings, and for at least 15 minutes every day, he said.
“Thinking is key to their success,” he wrote. “They spent time every day brainstorming with themselves about numerous things.”
He said they asked questions such as “What can I do to make more money?” “Does my job make me happy?” “Am I exercising enough?” and “What other charities can I get involved in?”
They ask for feedback.
Millionaires seek feedback to help improve themselves, according to Corley.
“Fear of criticism is the reason we do not seek feedback from others,” he wrote. “But feedback is essential to learning what is working and what isn’t working. Feedback helps you understand if you are on the right track. Feedback criticism, good or bad, is a crucial element for learning and growth.”
It allows millionaires to change course and experiment with a new career or business, Corley said. “Feedback provides you with the information you will need in order to succeed in any venture.”
They prioritize four relationships.
But millionaires can’t build wealth without the help of others.
Chris Hogan, the author of “Everyday Millionaires: How Ordinary People Built Extraordinary Wealth — and How You Can Too,” studied 10,000 American millionaires — defined as those with a net worth of at least $1 million — for seven months and found they achieved their seven-figure status with four key relationships: a coach, a mentor, a cheerleader, and a friend.
Corley emphasized the importance of having a mentor in particular.
“Finding a mentor puts you on the fast track to wealth accumulation,” he wrote.
They’re more conscientious.
Most millionaires’ traits and habits tie into conscientiousness, which has a strong correlation to net worth, according to Stanley Fallaw.
“Many of the behavioral components that impact net worth, regardless of how old we are or our income levels, including frugality, planning, and responsibility, tie into this personality characteristic, and help us understand why it is so critical in the creation and maintenance of wealth over time,” she wrote.
Similarly, Jude Miller Burke studied 200 self-made millionaires for three years and found that they tended to be conscientious and displayed the trait at a higher level than less successful people.
They understand delayed gratification.
Millionaires spend most of their lives sacrificing temporary pleasures for long-term success. They have no problem buying an older used car, living in a modest neighborhood and wearing inexpensive clothes. They don’t care about keeping up with the Joneses.
Millionaires spend most of their lives sacrificing temporary pleasures for long-term success.
These decisions allow them to do things like save for retirement and college, and build up a large down payment for their dream home. They realize that instant gratification is fun—but delayed gratification is so much better. Today’s sacrifices set them up for tomorrow’s success.
They budget.
Your budget is your plan. And you can’t build a million-dollar net worth without a plan, people. Success isn’t an accident. You are in charge of your own wealth-building.
You can’t build a million-dollar net worth without a plan.
Just like you build a house by starting with the foundation, you build wealth by starting with the budgeting basics. And then you keep following them. When you’re making a lot of money, you don’t stop managing it, right?
Average millionaires have made a habit of budgeting every month. They know what’s coming in and what’s leaving their bank accounts. If you only remember one thing, it should be this: Budgeting is the key to winning with money. It’s telling each dollar where to go at the beginning of the month instead of wondering where it all went.
They set ambitious goals and act on them
Self-made millionaires put their ideas and dreams into action, whether that’s starting a business or achieving other professional or personal pursuits. This determination is a common driver among many who made their millions without an inheritance.
They have mentors
Many self-made millionaires are quick to admit that they cannot possibly know how to do everything. They reach out to others who know the ins and outs of different types of saving and investing, tapping into the best minds on each subject for perspective and insight. That certainly pays off.
They are not afraid of failure
Millionaires understand the benefits of learning lessons through failure. However, the risks they take are thoroughly calculated and each scenario played out. Once they commit to something, they give their all.
They understand the value of time
Time is money, and millionaires know this all too They quickly learn how to manage their time, and they know that there is no reason to trade time for money.
Conclusion
Many, many millionaires live in a way that is far removed from the common perception of how affluent people live. Many of them drove old cars that were kept running through frugality and ingenuity. NONE of them lived in expensive homes and communities, and instead chose modest dwellings and neighborhoods. And only a small percentage of them could be considered flashy or ostentatious in their lifestyles.