How do the very wealthy manage their money?

It’s no secret that millionaires have distinct manners , thinking approaches , and ways of living than the average person. Those thinking are important when it comes to the methods of managing their money. They have a different way of thinking that literally helps them earn even more money by taking wise financial decisions like the following ways :

1. Understand how to distinct between wants and needs.

Millionaires also know how to distinct between wants and needs. We all have those moments when we would like a new house, pair of shoes, car, or apartment . But, are they indispensable? Instead of spending money on things that aren’tuseful , millionaires put that money towards important items that will help increase their wealth.

3. Focus on the long term goals.

As Timothy Sykes, the Penny Stock Millionaire, says in Entrepreneur,

“Long-term goals take a minimum of one to five years to accomplish. Long-term goals are excellent motivators. They enable you to look beyond the moment and put into perspective why you are spending your time today as you are.”

Your daily habits should make you follow your long-term goals, and if they do not, your goals need to be changed in some way. The new approach may be adjusting your habits in some way, or probably cutting out or reducing non-critical tasks and including to do list that will help you in the future.

4. Have many sources of income.

After getting some financial security, millionaires start to look for other methods to bring in money. Why? Because they understand that their main source of income could unexpectedly dry-up.

5. Automate investments.

There are robo advisors on the market and other methods to automate investments, such as deducting percentage of your paycheck and placing it into a e-cash retirement account, but millionaires also invest so commonly that it’s becomes a habit. They know how and when to take benefit of a chance , as well as how much to invest, apparently without blinking an eye. But they have tried this investment approach often enough that they gain a definite expertise about investment approaches.

6. Have a monthly budget.

By following a budget, millionaires can see how much money is coming in and how much is going out. This helps them to build a spending plan so that they can afford their needs and avoid wasteful expenses. There has been at least one study that says many wealthy people do not have a budget plan per se, but the very wealthy take into consideration where their money is being spent .

7. Are prepared for crisis

Millionaires have a rainy-day fund set aside. They realize that there may be time when they’ll have an emergency , like losing their job or an unpredictable family death. Instead of taking credit , they have the money saved up to take care of themselves until the emergency is over. Many bad things can be avoided by being ready with an emergency fund. I personally advise that you have 12 months cash sitting in the bank so that if you face a crisis , you’re good.

8.Invest in projects they understand

Warren Buffett and the legendary stock investor Peter Lynch have offered the recommendation that you should “invest in what you know.” It’s a habit that millionaires have practiced because when they understand how a company produces revenue and profitability, they have a unfair advantage

9. Don’t spend more than you can earn

Keep tracking daily , monthly , and yearly expenses — just like almost millionaires do.

You’ll instantly comprehend that you’re wasting money on items that aren’t needed or can be bought at a better rate.

12. They avoid debt

They don’t borrow any money and and try to ot use credit cards — unless it’s an investment to enhance their business or start a new company. In other words, if they don’t have it, they’re not going to spend it. They do without — instead of than spending what they don’t have.

13. They get financial advice

Millionaires aren’t afraid to ask for assistance — exclusively when it comes to money management. Just because they built a social network or invented great things , doesn’t mean that they know how to invest or save their money. They ask a financial advisor or accountant for assistance and increase their wealth.

Source :https://parkcircletrust.co/articles/finance/77