What’s the first thing that comes to mind when you hear the word ‘millionaire’? A lot of money! Sure, that’s one thing. What’s next? Shortcuts, unethical, and illegal ways. Unfortunately, yes some people think that way, and it's certainly the political climate in this day and age. What else? Inheritance, well, some millionaires come from affluent families. They are extremely intelligent people! Yes, some millionaires have earned a fortune for their extraordinary ideas.
But that’s not all about being a millionaire. There are legal and ethical ways to earn millions of dollars. It’s funny how most people think people become millionaires overnight. Well, that’s not true, many millionaires are self-made, come from humble families, and are not the most textbook representation of intelligent people, but they’re definitely among the most street-smart.
Many people dream of becoming a millionaire, yet it seems so far-fetched that only a few chase it. It’s probably because of the myths surrounding millionaires that people often question their own abilities to become one.
Millionaires think differently, which is why they are where they are. To become a millionaire, you have to think the way they think and plan the way they plan. Here’s how millionaires plan for their financial success.
Investing allows you to grow your assets, leading to more quality time with your family
The earlier you start making money, the better; millionaires have understood this formula because even for investing money, you need money first. According to a survey, 1 in 3 millionaires paid for their college education without taking any debts. This shows two things; first, they had enough college money; second, they consider student loans a roadblock to their financial success.
Working early on in your life can set you apart from others because, by the time you graduate, you’ll already be far ahead in the game by having some dollars in your bank account without any student debts and experience gained from the job market. Many millionaires have used their savings and knowledge from odd jobs to establish their start-ups after graduating. Also, last point on this one, it's important to make mistakes, and it's best to make financial mistakes when you are younger, and the odds are lower, then wait until you are older and have a family and employees who are counting on you.
I made hundreds of financial mistakes when I was in my 20s, long before I had children. These were some of the best education I ever had.
Related article: Cayman Islands Foundation Companies
Compound Interest Of Investments Over Time
Millionaires have embraced compound interest because it’s a powerful tool for financial planning. Let me explain it more simpler, and you’ll see why it’s so important. Let’s say you deposit $1,000 USD in your account with an interest rate of 10%. In the first year, the interest compounded will be on the money you deposited, and your total amount will be $1,100 USD. But the following year, the interest will be calculated on the beginning amount plus the interest, so your total amount will be $1210 USD. So basically, its interest on interest and your money grows faster over the years.
Those who invest early take advantage of early retirement
In the face of economic instability, saving money is not a smart option. Money loses its time value, and it loses its value instantly during a financial crisis. The reason why the net worth of millionaires keeps increasing is that they never stop investing. They focus on increasing their wealth and are always looking for investment opportunities. This doesn’t mean they don’t save at all, but they save to invest and earn more on their savings.
Related content: What Is The Panama Private Interest Foundation?
Enjoying the rewards of investing early
As Warren Buffet says, “Never put all your eggs in the same basket.” You’ll be naïve to turn down the financial advice of the most successful business magnates and investors of all time.
Having one income stream means being utterly dependent on it; if you lose it, you lose it all. Most millionaires have their own businesses, yet they invest their money in multiple streams because they know that the more they diversify their portfolio, the more secure their income will be. So even if their company loses its primary business, they have enough money to start a new company.
Related article: Guide To Setting Up A Trust In The Cook Islands
Being self-employed allows you to spend time with your family
How much can a steady paycheck give you? Not enough to make you a millionaire! Millionaires have ditched the traditional 9–5 jobs and carved their own futures by becoming entrepreneurs. They’ve taken the riskier but more lucrative paths and enjoy more freedom in their work life. By being their own boss, millionaires can choose how to earn money, where to spend it, and how to multiply it using their industry wisdom and expertise.
Being a smart risk-taker can maximize your profitability
Investing your money is risky, but taking calculated risks can maximize your profitability. Millionaires take more risks than the average person, but they’re smart risk-takers because they study the market dynamics before making their move. Most millionaires will tell you that they’ve failed more than they’ve succeeded but constantly learning from their mistakes is what leads them to ultimate success.
One common thing among millionaires is that they seek advice and are constant learners. Most of them are also avid readers who have strengthened their knowledge through books and used it to make informed decisions to minimize risk in their investments.
When young people approach me asking for investment advice, I tell them to spend their money on books, courses, seminars, masterminds, and anything else that will help them build a specialized body of knowledge in a topic that matters to them. Self-education is your path to demanding more money in the marketplace and adding more value to clients and customers.
Related content: The Basics Of How To Get A Second Passport Or A Second Residency
Many millionaires choose to set their assets in the British Virgin Islands to have more money for investments.
Millionaires are tax-savvy and know legal ways to minimize taxes. Many millionaires keep their money offshore because of the tax benefits and alternative investment options it offers and will incorporate their start-ups in countries that don’t tax foreign-sourced income.
I always say that working with an experienced professional is worth their weight in gold. Look for a professional with the skills and experience you need to minimize (or preferably eliminate) your tax liabilities. My work specializes in the offshore market and tax haven countries.
Many people believe that "taxes are the cost of doing business." I completely disagree with this. As a libertarian, my motto is that taxation is theft, and I do not believe governments should have the right to redistribute wealth. Most of the millionaires I have worked with during my career make sure to legally mitigate taxation and do everything they can to pay as little taxes as possible.
Related content: The Differences Between Trusts And Foundations
Dubai is a great oil market country which is rich in investment opportunities.
While many millionaires invest in stocks and bonds, which are riskier, most millionaires prefer investing in assets whose value is guaranteed to increase over time. Real estate is a common choice because prices have increased in the past, and it explains why millionaires have real estate in different countries.
Some millionaires buy houses and rent them out for the additional rental income every month, while others buy the property and sell it when its value increases. Many millionaires purchase property in different countries to tap the growth potential of diverse international markets.
I have wanted to be wealthy as far back as I can remember and have spent a lifetime studying millionaires and the process of amassing capital and wealth. But it was not really a big deal when I finally became a millionaire myself in my 30s. I realized that the money itself was not really important; it was who I had to become to get here that really matters. And if tomorrow I lost it all for whatever reason, I am confident I could make it back in short order because I have the mindset of a millionaire.
For those of you who have built up sizable wealth and are looking at ways to protect it, I suggest booking a call with me to see how I can help.