Millionaire | wealthymatters

The Would-be Millionaire’s Pledge

February 15, 2011 14 Comments

By starting early, and socking away small sums in conservative investments on a regular basis, a person can get pretty far ahead in life.The important thing is to start as early as possible to give compounding a chance to work it’s magic.(For more on how compound interest works,refer to this post:https://wealthymatters.com/2011/01/24/compound-interest/. And for an estimate of just how small an amount you need to put aside on a regular basis to become a millionaire,check out the calculator here:https://wealthymatters.com/2011/01/26/want-to-be-a-millionaire-calculator/)

So if you’d be a millionaire later in life why not take the following pledge and get started?

I will pay myself first always.No excuses.
I will take advantage of all low-cost government,employer,and other private group benefit schemes .
I will stick to the budget and goals I set for myself.
I will spend less than I make each year. I will not get into unproductive debt.
I will make my credit-cards and other sources of free money earn for me.
I will read more books on personal finance and implement the wealth-building strategies I learn.
I will shop around , consider alternatives and negotiate before making purchases.Iwill time purchases to get more for my money.I will not saddle myself with unnecessary crap even if it’s dirt cheap.

The above pledge is modelled on the basis of the original here : http://postgradagenda.wordpress.com/2011/01/27/how-to-become-a-millionaire-sort-of/ .I really wish I had this level of awareness so early in my life.It would have brought more focus to my earlier efforts.

Filed under Tool Kit Tagged with Compound Interest, How to be a Millionaire, How to be a Millionaire Calculator, Millionaire, Millionaire's Pledge

Learn Wealth Building From The Millionaire Next Door

February 14, 2011 35 Comments

Do you want to be a millionaire? Then perhaps you should start by studying the habits of millionaires….. And this book is just the right place to start.

If you check lists of the best financial books of all time, you’re bound to find several that include The Millionaire Next Door: Surprising Secrets of America’s Wealthy. Written in 1996 by professors William Danko and Thomas Stanley, its main premise is that people who look rich may not be wealthy; they overspend — often on symbols of wealth — but actually have modest portfolios and, sometimes, big debts. On the other hand, many actual millionaires tend to live in middle-income neighbourhoods, drive economical cars, wear inexpensive watches, and buy suits off the rack.

Following are some of the gems of wisdom found in the book that the authors Danko and Stanley have gleaned from their thousands of surveys of millionaires.

#1: Income Does Not Equal Wealth
Yes, higher-income households tend to have more wealth than lower- and middle-income households. But the size of a paycheck explains only approximately 30% of the variation of wealth among households. What really matters is how much of the income is invested. On average, millionaires invest nearly 20% of their income.

Danko and Stanley even offer a “simple rule of thumb” formula for determining whether you have a net worth that is commensurate with your income:

Multiply your age times your realized pretax annual household income from all sources except inheritances. Divide by 10. This, less any inherited wealth, is what your net worth should be.

Those in the top quartile of wealth accumulation are prodigious accumulators of wealth (PAWs), according to Danko and Stanley. Those in the bottom quartile are under accumulators of wealth (UAWs).This formula also helps in sorting out the millionaires/millionaires-to-be(PAWs) and the millionaire-lookalikes(UAWs).Here is a calculator to do this calculation easily:https://wealthymatters.com/2011/01/17/am-i-wealthy-calculator/

#2: Work That Budget Read more of this post

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8 Habits of Millionaires

January 30, 2011 2 Comments

Here is a to – do- list that can make almost anyone a millionaire.The operative word is millionaire as in a person with a few crore rupees.This list does not require a person to be specially talented with money.All that is required is the will to become a millionaire and the discipline and persistence to stick to doing small things repeatedly till you master them.You won’t get to live the life of the Rich and Famous but you and your family will be comfortable later in life.

Earn to Invest, Not Earn to Spend

The first skill you need to master is to learn to control your impulses and delay gratification.Just force yourself to postpone buying unnecessary things for longer and longer periods .Allow yourself to buy those things only when you have saved up and invested a certain amount of money first.After a while you will find it easy to first invest money and then spend the remaining.If you have debts, force yourself to invest first , pay your EMIs and then spend, in that order.

Have a Plan and Work the Plan

Then use this calculator https://wealthymatters.com/2011/01/26/target-crorepati/ to figure out how much you need to save and start putting it away monthly to make your first crore.To find the best interest rates refer to this post https://wealthymatters.com/2011/01/19/interest-rate/ .Now that you know how much to put aside and where you need to do it,you have your basic plan in place to become a millionaire.

Develop Many Income Streams

A person can work only that hard and that long and only at that many jobs in a day to make money.So its important to start acquiring assets that make you money.So ,for example, you will have to consider buying a good mutual fund or some good dividend yielding shares.

Understand your Finances

Also you need to be aware of exactly how much you are making, how much you need to save and learn to develop a budget for spending.You need to know how to evaluate how your investments are doing.For that you can take the help of this post https://wealthymatters.com/2011/01/26/cagr-calculator/ .The more you know the more you can make out of your investments and the less people can cheat you. Read more of this post

Filed under Tool Kit Tagged with compounding, crore, delayed gratification, Develop Many Income Sources, discipline, Earn to Invest, Habits of Millionaires, impulse control, Manage Risk, Millionaire, persistence, plan, RandomBlog2011, Studying Ways to Make Money

Want to be a Millionaire ? Calculator.

January 26, 2011 3 Comments

A million dollars is about 4.6 crore rupees.It is still not such a small amount but then again it’s not a figure we can’t wrap our minds around.A millionaire has a net worth of a million dollars not including the price of his/her primary residence.These days helped by inflation and the vast universe of opportunities available many many people are joining the Millionaire Club.So why be left behind?Here is a calculator to show just what you need to do to become a millionaire. http://www.religaremf.com/want-millionare-calculator.aspx .Just clarify your goals,work out the exact course of action you need to follow and stick to the plan.Voila, one fine day you will be a millionaire!