Self-Made Millionaires Are Frugal
One thing that many self-made millionaires tend to do is live frugally. Most of them do not actually live like our idea of a millionaire. They save money where they’re able to and live far beneath their means.
They Don’t Overspend on Housing
While most people might imagine millionaires living in luxe accommodations, those who plan to retire early typically opt for more affordable homes in lower-cost areas. They often live in fairly modest housing–but they’re more likely to own their homes outright than the rest of us.
They Live Outside of their Comfort Zone
Even if society puts pressure on them to do otherwise, they’re able to cut back in areas that others wouldn’t dream of giving up in order to later reap the rewards. For example, some millionaires might choose to cut out cable or even go without a car if it suits their lifestyle and saves them money.
They Spend More on Experiences
Instead of spending money on material items, self-made millionaires put more value on experiences, such as traveling and try to truly live life to the fullest. Not only that, but they also put a lot of focus on exercise and keeping themselves healthy.
Early Retirees Take Inventory of their Finances
This means they calculate their entire net worth and estimate how much they spend annually–and make sure they’ll be able to stick to that amount in the future. This circles back to the idea that millionaires are some of the most frugal people you’ll meet; they’re already living as though they are on a fixed income after retirement.
They Set Up Passive Incomes
After retiring early, or even before they stop working, self-made millionaires seek out opportunities where they can create a passive income. That’s income you can earn without having to actively work for it. Some have even used blogging to create a passive stream of income!
Even After Early Retirement, They Try Not to Spend Money
If you get used to living a frugal lifestyle, sometimes the habit continues to stick with you. It’s surprising how much less money you’ll need to spend when you don’t have to worry about buying clothing for work or other work-related necessities.
They Aren’t Motivated by Money
The funny thing about retiring early is that most self-made millionaires realize that they end up thinking less about money than they did before they retired. Instead, they find new sources of motivation, such as working on hobbies that they’re really passionate about.
When they Get Raises, They Don’t Spend It
Whenever self-made millionaires got a raise during their careers, they chose to save the money instead of splurging on something unnecessary. It’s very easy for your lifestyle to inflate right along with your paycheck, so be wise about saving as much as you can.
They Keep Track of Their Spending and Net Worth
Not only do self-made millionaires estimate how much they’ll need to spend annually, they also keep track of how much they’re spending and what they’re spending money on.
Can you state exactly how much you spent on groceries or entertainment last month? Do you know your net worth? These are data points that will help you understand your overall financial health.
They Continue to Increase their Earnings
Just because they’re retired doesn’t mean these millionaires stop earning money. They take the opportunity to invest their money or start a side hustle. They pursue more opportunities for passive income and look for ways to make their money work for them.
They Find Value in Being Happy and Optimistic
Self-made millionaires have the unique opportunity to truly enjoy something they worked so very hard for, unlike those who might win a lottery and think nothing of splurging away their new financial freedom.
Self-made millionaires all share 12 particular habits that helped them get where they are. These are the same habits that will help them maintain their financial independence so they can truly focus on their well-earned retirement, whenever they decide to step back from working.
If you’d like to learn the best way to save for retirement yourself or how to retire the right way, read on!