Nobody can guarantee any one path to making millions, and once you have a lot of money, there is the problem of keeping it. While there are plenty of rags-to-riches stories out there, there are also plenty of rags-to-riches-and-back-to-rags stories. You can’t control the economy or bouts of bad luck, but you can control some things, like not spending uncontrollably or putting all of your money in only the highest-risk investments. Keep reading for tips on how to make the most of the money that you have even if you weren’t born with a silver spoon.
Have the Right Mindset
The first thing you should keep in mind is that a million dollars is not necessarily that much money. Before you dismiss this as hyperbole, keep in mind that being a millionaire does not mean having stacks of cash lying around but $1 million in assets. There are places in the United States where the median house price is $500,000, which means that half of the houses cost even more than this.
If you add a retirement account worth the same amount, that will mean a person could remain in their home and fund twenty years of retirement at $50,000 per year—and remember that if the median house price is high, the cost of living is as well, and what will $50,000 be worth in a decade? This also assumes that there will not be any major medical or other costly emergencies. The point here is not to plunge you into despair. Most homes are not worth half a million dollars. The point is to think about money realistically and start to get a better sense of what financial security means to you.
Look at Your Assets
In fact, when you think about it like this, you might decide you would rather sell your big house in a hot market and move to an apartment, particularly if you do not need the space. You could potentially invest that money elsewhere. You may have other valuable assets that you are not aware of as well. For example, if you bought a life insurance policy for the benefit of your children and they are adults now, you might be able to sell it. You can review a guide about a life settlement and how to sell your policy. This may be helpful if you feel that your financial security continues to decline after retirement or simply as a way to boost your savings. Do make sure you understand any tax implications involved in selling your assets.
Saving and Investing
Being frugal is one of the most important things you can do. The other is investing wisely. Millionaires are usually not the people with the flashy cars and latest fashions. It is true that your car can define your lifestyle however many millionaires opt for less expensive options in favor of keeping more money in bank. They tend to spend modestly, and you should too. Wild stabs at getting rich quick through investments is not the way either although you can certainly use some cash that you don’t mind losing for this. Instead, you should diversify your investment portfolio across a variety of low, medium and higher-risk investments, and some of your money should be in no-risk interest-bearing accounts.