Many articles on retirement planning suggest that you “need” $1 million to retire safely. we know that’s not true. There are as many ways to retire with confidence as there are people. (Use the Boldin Retirement Planner to find your way.)
However, reaching $1 million is a big goal and often a desirable milestone. And depending on your goals, you may need to save quite a bit for retirement.
Here are 14 myths and some tips on how to become a millionaire.
The millionaire myth: you have to be born rich
There is no doubt that making money is easy if you currently have money, came from money, or inherited money.
However, it is not required. It’s not that common. According to Fidelity Billionaire Outlook studythe majority (82%) of millionaires are self-made. They did not inherit money. They made their own wealth.
Hint: What millionaires inherited from their parents were values. Author Thomas Corey Rich Habits: Daily Success Habits of Wealthy Individualssaid, “more than 95%.” [of millionaires] They said they have been taught to take responsibility for their actions, respect the law and other people’s property, work hard for what they want and improve themselves every day. ”
- Learning how to build wealth and sharing your values with your children will be a powerful legacy.
The myth of the millionaire: As long as your salary is high, you’ll be fine forever.
You may have read the seemingly pitiful sob stories of families making $350,000 a year who say they’re “just getting by.” Maybe you just rolled your eyes and moved on. Maybe you can relate to their story too.
When you’re making a lot of money, it’s easy to spend a lot of money. If you live in certain parts of the country, pay private school tuition, and have expensive hobbies, you can quickly burn through a very high salary. .
Most people find it surprisingly easy to spend the money they earn, no matter how much it costs.
The average millionaire earns a decent salary. The median household income for millionaires is $200,000. However, the secret to becoming a millionaire does not necessarily lie in high income. It’s all about how much you can save.
Hint: According to research by Fidelity, on average, billionaires save 31% of their salaries. However, the sooner you save up your money, the easier it will be to reach millionaire status thanks to the magic of compound interest.
For example, if a 20-year-old saves $200 a month until retirement, he or she will have about $1 million at age 65 (considering past earnings). If a 50-year-old contributes $1,500 a month, a 65-year-old contributes only half that amount.
- But regardless of your age, saving money is the path to becoming a millionaire.
The myth of the millionaire: it’s all luck
Certainly, getting lucky can be a factor in becoming rich. After all, success requires taking some risks. As the saying goes, “fortune favors the brave.”
But the risks billionaires take are usually carefully calculated. And becoming a millionaire isn’t necessarily about how you make money. That means allocating a significant portion of your income to savings. There is nothing lucky about saving and investing (smart, low-cost investments). That’s purely sensible.
Hint: Here are 23 smart and easy ways to significantly increase your savings.
The millionaire myth: You must earn all your money before you retire
Indeed, most of us worry about running out of money in retirement and ask, “Will my savings really last?” But maybe we’re all asking the wrong questions. Retirement doesn’t necessarily have to be a time when your assets decline.
In fact, you can improve your financial situation during your golden years.
Hint: Check out these tips on how to become a millionaire after retirement.
The millionaire myth: you need to have a degree from a top university
When you think of a billionaire, you might think of a Harvard-educated lawyer or a Stanford MBA. Higher education increases your chances of earning a higher salary, but it does not increase your chances of becoming a millionaire.
According to the now classic book, millionaire next door According to Thomas Stanley, only 8 percent of billionaires have a master’s degree, 8 percent have a law degree, and 6 percent have attended medical school.
The myth of the millionaire: They work for big banks, law firms, and technology companies
Yes, there are many millionaires who made their money working for large companies.
But 66% of billionaires own their own businesses, according to Stanley. Entrepreneurship seems to be the surest path to millionaire status. And most billionaires actually have multiple sources of income.
Hint: Corey’s research reveals that billionaires are rough hustlers. They often have multiple sources of income, with 65% having at least three different sources. Learn more about passive income and starting a business after 50.
Hint: Real estate side hustles and investments are popular among millionaires. Let’s take a look at eight ways to invest in real estate.
The Myth of the Millionaire: Success Comes Easy and Early
How old do you think most billionaires are? You might think they all fit the mold of young technologists like Mark Zuckerberg, who started Facebook while in college.
However, the average age of a billionaire in the United States is 62, and about 38 percent of billionaires are 65 or older.
And mid-late success is especially true for entrepreneurs. According to Global Entrepreneurship Monitor (GEM)the highest rate of entrepreneurship around the world has shifted to the 55-64 age group.
Furthermore, the era and high growth entrepreneurship studyThe study, conducted by MIT in collaboration with the U.S. Census Bureau, analyzed 2.7 million people who started a company between 2007 and 2014. People over 50 are twice as likely to be highly successful — defined as companies in the top 0.1% of companies that are 30 years old.
Hint: Click here for more information on starting a business after age 50.
The myth of the millionaire: they don’t have to worry about anything
The biggest concern for most billionaires is one you can probably relate to: health. Being healthy and being able to afford medical care is their biggest concern.
Any other concerns?
- how to spend time
- How to leave a meaningful legacy (impact, not money)
- their future financial security (see below)
Hint: Calculate how much your medical expenses will be after you retire. Boldin Retirement Planner lets you get personalized quotes for health care, Medicare, and long-term care before you turn 65.
Hint: Plan what you want to do after you retire. Below are some resources.
The myth of the millionaire: They know everything about their future.
A Fidelity survey found that billionaires are highly worried about their financial future. Across the categories of retirement savings, debt management, real estate values, income levels, and investment returns, 68% of millionaires are satisfied with their current situation, but fewer are confident about their financial future. It was only 17%.
Hint: Use the Boldin Retirement Planner to play out worst-case scenarios and stress test your retirement plan to gain confidence that you’ll have the money you need, when you need it.
Millionaire myth: They all work with financial advisors
Only one-third of billionaires surveyed by Fidelity work with a financial advisor. Working with an advisor does not necessarily reduce stress for high-net-worth individuals. What makes a difference? Financial literacy.
Millionaires who are less stressed believe they are knowledgeable about investing and in control of their finances.
Hint: Take control of your own financial future. Get a better understanding of your money with a comprehensive retirement planner. Even if you use an advisor, tools like Boldin Retirement Planner can help you check the health of your advisor’s recommendations and find opportunities on your own.
Considering hiring an advisor? Work with Boldin Advisors’ CERTIFIED FINANCIAL PLANNER™ experts to identify and achieve your goals. Book your free discovery session.
The myth of the millionaires: They’re all financial masters
According to Spectrem Group, 58% of millionaires admit they have a lot to learn about investing.
But they save and invest.
Hint: Stock picking and day trading are not the tried and true path to becoming a millionaire. You can invest in index funds with a long-term buy-and-hold strategy in a simple way.
Hint: Corey discovered that “self-made millionaires have a habit of saving.” You should too.
The Myth of the Millionaires: They All Live in New York City
Although there are millionaires all over the United States, New York is not even in the top five states with the most billionaires. According to Phoenix Marketing International, the states with the highest percentage of millionaires are New Jersey, Maryland, Connecticut, Massachusetts and Hawaii.
Hint: Run your own race to get rich. It doesn’t matter where you are or what you do.
The Myth of the Millionaires: They All Drive Luxury Cars
What car do millionaires prefer? It’s not a Tesla. It’s not even a Mercedes. It’s not even a Lexus. guess what? Billionaires drive Fords more than any other type of car.
Hint: Think twice before spending money on luxury items. It’s okay to splurge, but start by splurging on your savings. If that’s covered, enjoy!
Also, think about how to spend money on happiness rather than status. Check out 11 ways to spend money to be happy.
The myth of the millionaire: they spend their free time
Millionaires don’t usually lounge around the pool or hit the links. Hard work is important, and billionaires often love their jobs. In fact, billionaires are usually older; 80% of them are still employed.
Hint: Can you really increase your savings by cutting expenses and delaying retirement by a year?
Are you on track to make $1 million? Is that enough?
Use the Boldin Retirement Planner to see your current net worth, the value of your assets over your life expectancy, and whether you’re on track for a secure future.
It’s not scary. There are multiple options to improve your prospects for wealth and security.
As shown above, work, multiple sources of income, consistent savings, and wise spending are the keys to becoming (and staying one) a millionaire. Use our planner to see how any or all of these strategies can change your financial fortunes.