Millionaires don’t just wake up to find themselves millionaires. It takes a lot of hard work to become a millionaire. On the other hand, becoming background doesn’t need any hard work. You can loose ten years of hard work in the twinkle of an eye. That’s why some millionaires don’t last. We gathered these few tips to prevent you from falling into that pit.
- They didn’t track their spending.
It takes a lot for money to come in, but for it to go out, you might not realize until you’ve spent a huge chunk. It’s good to have a monthly budget, most especially when it comes to personal spending. It’s of utmost importance to track every penny you spend on taxis, lunch, bottled water, goodwill etc. if you calculate how much you spend on little purchases, it might sum up to a million.
When you have a monthly budget, and track your spending, it will be easy to know how much you spent on what, and how you could spend less, or more if necessary. Millionaires at the verge of going broke, don’t track their spending. They can’t even tell you where the money they withdrew from the bank went to. Their bills end up in the trash without them giving a glance at it, or having second thoughts.
- They made pricey and emotional purchases.
Just because you can afford it, doesn’t mean you should go all the way spending money for the sake of it. I’m not saying you shouldn’t spoil yourself. It’s important to, but how often. Say you had a bad day why not figure out a way to get back to your normal self, instead of going on a shopping spree, or giving yourself an expensive spa treatment. How often will you do that?
One interesting thing about the millionaires who stay rich is that many use coupons, look for the best bargains, and cause a scene if they’re overcharged. Then, they’ll turn around and go on a luxurious European vacation or purchase an item like a massive diamond ring.
- They didn’t have multiple streams of income.
Author Thomas C. Corley’s five-year study of self-made millionaires discovered that a majority of them have multiple streams of income. In fact, 65 percent of the millionaires he studied had three streams of income, while 35 percent had four streams.
“Having multiple income streams makes a lot of sense,” says Corley. “When one stream is negatively affected by systematic economic downturns, of which you have no control, the other streams can come to the rescue and help you survive the downturn, without seeing your lifestyle dramatically affected.” This also means that you follow the rule of, “not putting all of your eggs in one basket.”