Anna Schremmer - Family Consumer Science

 

What Does It Take to Become a Millionaire?

One of the hardest struggles in life is money. There never seems to be enough. So how do you become a millionaire or billionaire? Have you ever heard the one about the billionaire who lives in a modest home?

That billionaire is Warren Buffett, who Forbes estimates has a $75.6 billion net worth. His house? It’s not a sprawling 30,000-square-foot beachfront mansion. No, he lives in a quiet Omaha neighborhood in a $850,000 home that he bought for $31,500 in 1958.

Sure, for most people, living in an $850,000 home is a pipe dream. But if you think about a house like that being occupied by the second richest man in the world . . . it’s pretty surprising, isn’t it?

Warren Buffett could buy any house in the world (with cash!), but he chooses to live in a modest, relatively small home in Omaha. Why is that?

It’s a surprising fact that, according to Thomas Stanley’s book The Millionaire Next Door, “more than 80% [of U.S. millionaires] are ordinary people who have accumulated their wealth in one generation.” The book goes on to say that most millionaires don’t look the part. Most live in normal, middle-class neighborhoods and drive modest cars.

So what can you learn from these millionaires (and even billionaires like Warren Buffett) who don’t live the stereotypical life of a millionaire?

1. They’re avid readers.

President Harry Truman once said, “Not all readers are leaders, but all leaders are readers.” In The Millionaire Next Door, Stanley says that the average millionaire reads one nonfiction book per month. One of the reasons millionaires become millionaires is because of their constant desire to learn.

2. They understand delayed gratification.

In other words, the average millionaire has spent most of their life 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. Keeping up with the Joneses isn’t a priority for them.

Those lifestyle 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. 

3. They stay away from debt.

The idea of “debt as a tool” is foreign to the average millionaire. If they want something they can’t afford, they save and pay cash for it later. Debt is the biggest obstacle to building wealth. Run from it every chance you get.

4. They budget.

Your budget is your plan, and you don’t build a net worth of a million dollars without some sort of 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. The average millionaire has made a habit of budgeting every month. They know what’s coming in and what’s leaving their bank account.

5. They give.

The everyday millionaires who live down the street, the ones you don’t even realize are wealthy, are some of the most giving people you’ll ever meet.

Whether it’s tithing at church, donating to a meaningful charity, or just giving to friends and family on occasion, these people have a caring spirit.

This idea that wealthy people always live in ivory towers and wear $500 jeans is a myth. Being successful with money is as simple as living a modest lifestyle that follows a few basic principles.

The more of these habits you follow, the more successful you’ll be with money. Just ask Warren Buffett.

 “Knowledge for Life” provided by Phillips-Rooks Extension District #5 and K-State Research and Extension.