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Are you really saving money when you are pinching pennies? I certainly do not think so. Many people have mistaken that by pinching pennies, they are being frugal and saving money. However, I think that is certainly not the case and by pinching pennies, you may be wasting more money instead.

There are people who can scout the mall for the best deal by visiting every store available before making their decision. It is smart to find out various deals before making your decision, as it can let you have a feel of the market and available offers. However, you may not be saving money when you took into account of the time and effort you spent searching for the best deal.

Saving A Few Dollars On A Movie Ticket

There was once when I saw one of my friends trying to save a few bucks for a movie ticket. To save a few bucks, he decided to commute for an hour and a half to an old cinema for a movie. Back and forth, it would have taken him 2 to 3 hours of commuting time. On top of that, the cinema is in a rundown condition and it certainly cannot provide him with a very pleasant movie experience.

He might have thought that he had saved a few bucks but in my opinion, he does not.

Spending a total of 2 hours plus to 3 hours of commuting time to a rundown cinema for a movie does not seems to be saving money to me. What about the transport fees? What about the value of your time? What about the overall movie experience?

If you take the cost of transport fees, the value of your time (how much are you earning per hour?) and the overall experience of the movie experience, the pennies you pinch is costing you more instead.

Think About Value, Not Price

Being frugal isn’t about pinching pennies, it is about being smart and getting the best value out of the price that you pay. Let us look at an example here; compare a G2000 shirt that cost $59 and a shirt that cost $29 that you get from some neighborhood store.

If the shirt is of the same quality than getting the $29 shirt is definitely the right choice. But what if the quality of the $59 G2000 shirt is way better than the $29 shirt that you got from the neighborhood store? Which means it looks better and last longer. On top of that, it looks good on you and makes you feel like a million bucks.

The value you will get out from the $59 G2000 shirt is much more than the $29 shirt and suddenly it is not wise for you save the $30 bucks anymore. Paying the additional $30 bucks for the benefits seems to be a much wiser and a more frugal decision.

Be Frugal, But Be Smart

Do not mix up being frugal with pinching pennies and losing value. Look beyond the price and see the value you are getting. It makes more sense to pay more to get more value rather than pinching pennies sometimes. Being frugal is a great habit to have and it can help you to accumulate wealth. The next time when you want to pinch pennies and be frugal, think about the value you are getting to help you make your decision.

Vincent
Frugal Living

Post from: Health Money Success

Are You Saving Pennies And Losing Dollars? – Save Money By Being Smart

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• The Power Of Creating Value (5)
• Personal Development Blog Carnival For 2009 (3)

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Warren Buffett is one of the world’s richest men and he is also one of the best investors in the world. He built up Berkshire Hathaway (a company whose share costs $100,000 per share) from scratch and he became a billionaire through investing alone.

I know that Warren Buffett is someone that I need to learn from if I want to become an excellent investor. I had read countless of his books, learning from the investment moves he made and also his yearly annual report. I had picked up valuable lessons from him and these lessons will definitely be useful to you as it can help you to grow your personal funds instead of seeing it dwindling.

So here are the 5 lessons I had picked up from him.

5 Personal Finance Lessons That Will Help You Grow Your Wealth

1. Spend wisely

Warren Buffett does not have a habit to splurge his money on toys such as big cars or fancy houses. Right now, he still lives in the same 5 bedroom apartment that he bought in 1957. He definitely has the capability (billionaire) to buy any toys he wants, but he simply chose to invest in the money instead.

He is not stingy about money, but he have the habit of thinking how much he will be losing out if he does not spend his money wisely. Because he believe in the power of investing and compounding, he knows that for every dollar spend foolishly, he will be losing the money for investment which he can make at least 20% return annually.

Lesson: Spend your money wisely and do not splurge on toys excessively.

2. No one will care about your money as much as you do.

Throughout his investing years, Warren Buffett does not let anyone handle his money. He checks up individual stocks by himself and makes the decision whether to buy or not.

If you allow other people (financial adviser, financial manager, stock broker) to handle your money, you will need to be aware of whether they are acting for your best benefit or theirs. Most of them have commissions for each investment that you made and sometimes they simply have too much customers on hand that they can’t pay attention to you.

Simply said, they don’t care about your money as much as you do.

Lessons learned: Invest in your financial education. Others do not care about your money as much as you do.

3. Know what you are doing

There are lots of financial instruments out there that promises you high returns in short period of time. Before you dive into them, ensure that you know what they are before buying. Most people trust others to make this decision (refer to point number 2) and they end up losing their money over their poor investment decision.

It is tempting to earn money in short amount of time but do put in the effort to know what you are going into before buying. There are many people who had incurred huge losses in the recent credit crisis because they do not know what they are buying and they ended up buying junks.

Lessons learned: Always know what you are doing when investing and remember to read the fine prints.

4. Risk of investing

Many people have fears that hold them back from investing. They think that it is risky to invest. Their mind is filled with the fear of risk and losing money, hence they are always on the side line while others are earning money investing.

You need to know the truth. It is riskier for you to place your money in the bank. For the measly interest rate that they are giving you, each dollar you put in is losing money immediately due to the inflation rate. Think about the price of a cup of coffee in the past and Starbucks now.

As Warren Buffett says, “Risk comes from not knowing what you are doing.”

Lesson learned: Overcome your fear of risk in investing. Investing is the only way you can beat the rate of inflation.

5. Think long term

Too many people overestimate what they can achieve in one year and underestimate what they can achieve in ten. Stop looking for ways to get rich quick and start investing now. When you are investing, always keep in mind that it pays to invest long term instead of switching around stocks.

Warren Buffett personally holds his stocks forever if he found a gem. Buying and selling stocks frequently will cost you admin charges and the commissions you have to pay to the stock broker.

“Life is like a snowball. The important thing is finding wet snow and a really long hill.” ~ Warren Buffett

I would like to change this quote a little. Investing is just like a snowball. The important thing is finding wet snow (great investments) and a really long hill (long term).

Lesson learned: It pays to invest early and holds on to your stock.

So do you have any other personal finance lessons that you want to share with me? I look forward to your comments and feedback.

Cheers,
Vincent

Post from: Health Money Success

5 Personal Finance Lessons I Had Picked Up From Warren Buffett That Can Help You Grow Your Wealth and Be Rich

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• Why Bankers Only Lend Money To The Rich? (10)
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• Personal Development Blog Carnival For 2009 (3)

Image courtesy of dborman2

Have you noticed this? The bankers normally refuse to lend you any money when you need it desperately but they will go right to your doorsteps to offer you money (loan) when you are rich (you don’t need the money now). Why is it so? It is because bankers only offer to lend you money when they think that you are qualified (able to repay the loan).

Some people may find it weird and think that why the banks only lend money to people who don’t need the money (the rich), and just refuse to lend it to those who need it urgently. But this is just how the banks work; they only lend money to those who are qualified by their standards so that they can earn profits through the interest.

This applies in our life too. In order to play our game at a higher level, we will need to qualify for it as well. There will be people who complain about life saying that they don’t have the money, time or network to help them get the success or money that they want. But if all they do is complain, they will be stuck at the “lower level”.

It is definitely easier to earn more money when we have the right people or capital to help us along the way. But the issue is this network or capital will not just appear right in front of your face. You will need to qualify for it.

As you can see in the above diagram, the line is kind of stagnant and going upwards slowly but once it reaches the turning point, the growth is exponential. The turning point is the point when you hit the qualified bracket and you have access to all the resources that you need to push for results.

For people who whine and complain about their lack (lack of money, time, skills, experience or money), they are usually caught in a limbo state just right around the starting point of the line. The point I want to drive home here is that instead of complaining that you lack the resources to succeed, put in the effort and time to move forward slowly until you hit the point where you are in the qualified bracket.

It is only once you are in the qualified bracket, you are granted access to the valuable resources (great network, capital, expertise of others) where all the other successful people in your field have.

Nobody is willing to work with someone who has not yet proven themselves. Put in your hard work and crawl to the point where others had seen you effort and results and decided to help you in your journey.

It is going to be a struggle before the turning point but once you reach the turning point, things get easier and you will find yourself playing in the higher levels with abundance of resources. This is why bankers go to Microsoft and while others go to the banker.

To your success,
Vincent

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Post from: Health Money Success

Why Bankers Only Lend Money To The Rich?

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Saving Money

Our school education does not teach us much about handling money in life and this has caused most of us to enter the working society without much knowledge on how to handle our own money. I noticed that there are people who are working for 20 to 30 years in the society yet they do not have any savings at all. If they were to get retrenched, they couldn’t survive even up to a month and that is something that we definitely want to avoid.

My Story

When I was younger (around 13 – 18 years old), I am always spending more money than I earned. This means that my bank account is always near the zero mark. Any allowance from my parents or paychecks from my part time work just ended up with me spending it on food, clothes and entertainments.

Somehow it seems like the older I get, the more I spend. When I was 13 to 16, I spent much of my money on the internet gaming cafes playing online games with my friends and when I was around 17 to 18, my expenses rose and I found that I was spending more than what I could afford.

I started to play pools, singing karaoke, eat at restaurants, frequent the clubs and chasing girls. All these are costly activities and my allowance from my parents was not adequate to sustain my spending. I picked up a part time job to help me sustain my spending and also hoped that maybe I would have some excess money so that I can save a little. However as my income rose, my expenses went in the same direction.

As I had started to read personal development books during that time, I became frustrated about my lack of savings. I began thinking of what will be the best way to increase my savings and I came up with the idea of opening a new bank account.

I thought that if I am spending from the same account where I am saving money, I will be tempted to spend all of what is available in it. However if I were to have one account for savings and another account for expenses, then the amount of money in my savings account will definitely be increasing as I will not be spending any money from it. It was like an “Aha!” moment to me and I went off to create my new bank account.

I thought that if I have only a single bank account and all my savings are in it while I am also spending from the same account, I am going to be tempted to spend all the available money in that account.

I started to deposit money into my savings account monthly and never spend a single cent from it. After a few months, I finally had some savings and up till now it is always increasing as I save regularly and never spend from it.

Lesson

Having a new bank account meant for savings only is a way that has work well for me. If you do not have much savings and you want to know what is the simplest way to do it, follow this formula.

1. Create a new bank account  meant for savings only.
2. Deposit a minimum of 10% of your income into your savings account monthly.
3. Do not draw any money out of your savings account.

I have done it and saw my savings increased from nothing to something and I believe you can do it too.

Vincent
Personal Development Blogger

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Post from: Health Money Success

How To Save Money (The Simplest Way)

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Value

What is value exactly? I define value by how useful something can be to others who need it. Creating value is an important skill and also skill that we must master in order to create an abundance of wealth.

Why Do We Need To Master The Skill Of Creating Value?

If we are able to create huge amount of value and provide it to others, they will be willing to pay huge amount of money for it because the value you created help them to solve a problem or make their life easier.

For example, if you are person who need to work on the go and there are 2 cellphones and one of it is an iPhone which cost around $1k and the other is a Sony Ericsson k750i which cost around $100 bucks, which will you choose to buy? Most probably the iPhone instead of the k750i. So why the iPhone?

You chose the the iPhone even though the price is higher because it is able to provides more value to you. It can help you keep track of your appointments, check your email on the go, log into Facebook, surf the web and also provide the user with the cool factor of owning an iPhone.

The Sony Ericsson k750i does not provide as much value to you because it is just standard phone which allows you to call and receive phone calls, SMS and some other basic functions and it would be crazy if you are going to pay $1k for the phone.

This show that your value determines your income and if you are able to provide a higher amount of value to others, you will be able to receive an abundance of wealth because others are willing to pay handsomely for the great values you had created.

How To Create More Value

Set Your Goals

Setting goals is an important step and this is the key step in almost to achieving everything. Always remember that what you can’t see, you can’t reach.

Write down what is your current income now followed by the amount you wish to command. With this goal in mind, search out for people who are able to command the amount of money that you wish to earn and learn from them.

It will be great if they can be your mentor and guide you towards your goal or you can learn from them by studying them closely and observe what they are doing to provide huge amount of value and how you can model after them.

Excellence

One simple method that we can use to create higher value is to always have the mindset that strive for excellence. There are people who always just get by in life with the “just pass” attitude. They aim for 50 marks instead of a 100 marks and normally those are the people who settle in mediocrity.

If you want to create higher value, you must first commit to the attitude of excellence and strive for the best you can be. Here is an example…

Example: Insurance Agent A

1. Do enough to hit target.

2. Work from 9 – 5.

3. Closes deal and never follow up.

4.Wait for leads.

Example: Insurance Agent B

1. Set higher goals than his original target.

2. Proactive and generate leads through various methods.

3. Conduct seminars on financial planning.

4. Regularly follow up with clients to ensure their needs are met.

5. Write books on financial planning and insurance.

6. Create detailed plans for potential customers.

Result: Agent B earns $20k per month while Agent A earns $3k per month.

If you were to choose an agent to meet your financial needs, which agent are you going to appoint? I believe agent B will be the one you would choose because of the higher value he can provide you and the agent is also creating other things that are of great value (writing books and seminars on financial planning) that contribute to his monthly income.

Parting Words

Regardless of your career, you can always provide more value by having an attitude of excellence. By consistently seeking ways you can provide more value to others, this will ultimately lead you to have a higher income.

Cheers
Vincent
Blogging Towards Excellence

**P.S**Do you think value is directly proportionate to your level of income? What do you think a blogger could do to increase his/her value to their readers?

If you like this article, it will be great if you can digg, stumble or bookmark it in de.li.cious. Remember to subscribe to my blog via Email updates or RSS feed so that you won’t miss out on my upcoming articles. (It is free!)

Hit Your Goals Home

Post from: Health Money Success

The Power Of Creating Value

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Personal Development Carnival 2009

There are great response for my first personal development carnival which consist of articles ranging from health, finance and personal growth. I had complied the submissions and categorize it into 3 topics, personal development, personal health and personal finance. Have a great read for this weekend.

Personal Development

Wally Bock presents Writing your way to success posted at Momentor.

Jason Koeppe presents Devloping A Positive Attitude – It?s All How You CHOOSE To See Things posted at Z-Synergy Zurvita Reps Team Blog.

admin@survivinginfidelity911.com presents What to Do When You Suspect Infidelity posted at Signs of Infidelity.

Wally Bock presents Personal Development Made Simple posted at Momentor.

Louis Burns presents Crafting Mental Movies For Others posted at NLP Marketing Blog.

Coach Gray presents Happiness: A Difficult Choice (Part Two) posted at Coach Gray.

JE Gonzalez presents Personal Deconstruction, by JE Gonzalez posted at JE Gonzalez.

Language Learner presents How to Learn English as an Adult posted at Learn English.

Personal Health

Alvin Hopkinson presents Foods for High Blood Pressure – 6 Healthy Tips to Control Hypertension posted at High Blood Pressure Treatment & Medication Reviews.

Living Healthy presents An Oldie but a Goodie posted at Cory Albertson.

Tony Huynh presents Why and How I Broke My Addiction to Caffeine at LimitlessUnits.com posted at LimitlessUnits.com.

Alvin Hopkinson presents Relief From Gout – How to Gain Comfort posted at Relief From Gout – How to Gain Comfort.

Caffeine Addicted Maniac presents Does Caffeine Raise Your Blood Glucose Levels? | My Caffeine Addiction posted at Caffeine Addiction.

Matthew Evers presents Treating Allergies At Home posted at Treating Allergies At Home.

Personal Finance

American Entrepreneurship presents Understanding the Functions of Management posted at American Small Business News.

apply4-credit presents Your Divorce and Your Credit Are Your Prepared? posted at Apply4-Credit.

Matthew Paulson presents Figure Out Your Magic Number: The Amount You Need Savedt o Live Your Ideal Life posted at American Consumer News.

Have a great weekend!

Cheers
Vincent
Personal Development Blogger

Post from: Health Money Success

Personal Development Blog Carnival For 2009

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Image courtesy of grilledahi

Myths About Being Rich

When I say the word millionaire, what pops up in your mind? I believe that you must be thinking that a millionaire must own a yacht and, live in some mansion and even drive a Ferrari. I believe that the media had influenced us to have all this mental images in when we think about millionaires, but it is not 100% true.

Most of the self made millionaire are actually frugal and they do not splurge their hard earned money on liabilities. Instead, they protect their capital and also invest it intelligently to make their money work for them instead of them working for the money.

In my pursuit of being wealthy, I am observing closely how the rich behave and what are their money habits. By observing their behavior, we can unlock the mystery of why the rich get richer and the poor get poorer.

The Poor Man Way Of Spending Money

The first thing when a poor man get his salary is thinking what he can spend his salary on to get instant gratification and it is a drastic difference from how a rich man spend his money.

The poor spend their money that they earn on liabilities instead of assets. Liabilities are things that take money out of your pocket and some examples would be the 42 inch LCD TV, home theater set or the Gucci handbags. Once the money are spent on liabilities, it is gone and the there will not be any opportunity of utilizing the money to make it work for them. This is why the poor get poorer.

The Rich Man Way Of Spending Money

How about the rich man way of spending money? When they have the money, they do not seek instant gratification and get themselves a Ferrari. Instead they are doing it the other way round. They constantly seek out assets that will help to grow their wealth.

This is the big difference between the rich and the poor. They always pay themselves first and are always finding ways to create passive income. If they keep spending their money on assets that help them to grow their wealth, they can only get wealthier and wealthier.

My Story

I was consistently broke in the past because of my poor money habits. I splurge on liabilities instead of assets and I can remember that my savings was always near the zero mark. It was until one day that I was so fed up of myself and my bank account that I begin to take action.

I started to read up books on personal development and finance and spend lots of time researching on how to become wealthy. Having done my research and equipped with my new knowledge, I begin to create budgets, track my expenses and got myself into the world of investing.

Gradually I can see my savings increase and it makes me just more thirsty for knowledge to increase my wealth.

I am seeing my friends splurging on night clubs, booze, LCD TVs and many other liabilities and it is definitely not the way I want to be like. Instead, I was slowly picking up assets like stocks and educating myself in personal finance, all this for the sake of financial freedom, because I know how much it hurts to stick to a 9 – 5 job and how valuable freedom is.

Parting Words

Start today, pay attention to what you are buying and minimize spending on liabilities. If you have debts, make a plan to clear off you debts first before the interest actually eat you up. Whenever you get your salary, make it a habit to pay yourself first and make it a consistent contribution of at least 10% of your salary into your savings account.

Having 2 bank accounts really help here. Allocate one for spending and another for savings. Make sure you do not touch your savings account and you can see it grow.

Spending your money on personal education is important as education is an asset that will increase your wealth . People can take away your physical assets but there is no way to take your knowledge away from you. Do not think that education is expensive because ignorance is even more costly. Start to invest in seminars and books to improve your financial literacy and see your money in the bank account grow.

Last but not least, take action. With all the knowledge in the world, without taking action, acquiring knowledge is just a waste of effort.

Cheers
Vincent
Personal Development Blogger

**P.S**Do you track your expenses? Do you have frugal habits? Share with us about some of the ways you use to track your expenses. See you in the comment section.

If you like this article, please digg, stumble or bookmark it in de.li.cious. You can have my latest articles sent to your email by subscribing to my blog via Email updates or RSS feed so that you won’t miss out on any of my articles. (It is free!)

Post from: Health Money Success

How To Spend Money Like The Rich

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Times Of Uncertainty

In this time of uncertainty, news of recession and mass jobs layoff are appearing a bit too frequently in the papers. The question today is how do you look at this recession? Is it a catastrophe or is it a blessing in disguise? How about jobs? Is losing your a job a bad thing or a good thing?

In my previous post I wrote about how to change disasters into meaningful events, so one of the worst disaster many may find is that they are losing their job or the job they are currently holding are not giving them enough security and it may be gone any time.

Losing Your Job

First of all, losing your job isn’t really a bad thing.

“What??? You must be crazy Vincent!”

No, I’m for real. The modern world education had conditioned us to think as an employee and not as an employer. They taught us all the skills that are needed to excel in helping your boss and the investors to be rich and wealthy instead of us. Everybody and anybody instead of us, does it make sense to you?

If we are an employee, we are helping somebody we didn’t even know to get rich but we are not even helping ourselves. Do you ever have the feeling of doing most of the work and in the end the amount of money flowing into your pockets are pitiful compared to what your boss and the investors are taking. So maybe losing your job is not a bad thing after all because this is a wake up call for you to start looking at alternatives.

10 Things To Do If You Lose Your Job

1. Get support

No doubt you will be caught in despair when you lose your job. Find your family members or friends who are supportive and talk to them. Pour your heart out and share with them your feelings. They may help you to keep a lookout for opportunities and you do not need to keep the whole thing to yourself. Let out your feelings and get yourself back to your normal emotional state before embarking the journey of finding a new job.

2. Do not take it to heart

When the company is restructuring or laying off people for the reason of cost cutting, do not take it too personally. It is a good time for reflection but do not allow this set back to shatter you totally. Believe in your ability and having good confidence really help during this time.

3. Expand Your Every Dollar

To ensure that your savings can last you through this tough time, it will be necessary to expand your every dollar. Buy things in bulk or get your groceries when they are on discounts. Avoid big ticket items and have your budget plan in place to avoid over spending.

4. Reflect

A good time for reflection. Spend some time to think about your current skills level and abilities. What do you need to do to excel in your field and what are the actions that are needed to accomplish that?

Ask yourself what do you really want to do. Is this job really the ideal job for you? One question that will help you in answering this would be, “If I can live my life over again, will I be doing this?” The answer of this question would be the key for finding what is the job that you really love.

5. Update your resume

How long have you updated your resume? Is it covered with cobwebs? Dust it and get back to work. Update you resume and decorate it with your recent personal achievements. Seeing your personal achievements can make you feel that you had accomplished things in the past and it also help to make you feel confident that you can get things done.

Always remember to put in your contact details like home telephone, emails, cell phone number and fax number if you have it. Lastly, having your referee’s details ready definitely help too, provided you have good relationships with them.

6. Network

Finding companies through the newspaper and internet sites are good ways to find new jobs and it is also important to have a good network to increase your probability of finding a job soon. Find out more about seminars, community events or your local networks and get involved. These are great places to meet new people and get new contacts.

7.Stay Well Groomed

Have you notice that in the movies, people who lost their jobs are always untidy and not well groomed? Maybe it is the negative state they are in and the amount of stress they are facing that are causing them to look fragile and untidy. If you are the employer, will you hire someone well groomed and full of energy or someone who look tired and untidy?

The answer is obvious, so stay neat, tidy and mind your posture. Your posture can tell others a lot about yourself.

8. Stay Motivated

It can be frustrating and disappointing when the jobs you applied were rejected. Stay motivated and focus on the positive side that there are lots of role out there in the market that you can fit into and provide value. Just stay positive until you find your role.

9. Upgrade Your Skills

This is one of the best time to keep your skills up to date in your current niche. Read up books, take up seminars or attend courses to improve yourself. When you have the skills that provides value, your new employers will have more reasons to offer you a better salary.

10. Create other streams of income

Having multiple streams of income will ensure that you will not face the same scenario again. The worst thing about losing your job is the lost of income and having the mortgage and bills to pay. Having multiple streams of income will ensure that you will have the money to pay your bills even when you lose one source of your income.

You can start by maybe leveraging the internet to sell stuff through eBay, writing books or learn more about investing. Robert G.Allen’s Multiple Streams of Income: How To Generate A Lifetime Of Unlimited Wealth will show more examples of how to create other sources of income.

Summary

Be calm to handle this situation and stay positive during this period. It can be tough but eventually you will find your new job that can get the money rolling in for you again. Most importantly, find ways to ensure that you do not face the scenario of losing your income again. Thanks for reading and if you like this article, how about subscribing to my blog to get my newsletter delivered to you.(It is free!)

Vincent
Personal Development Blogger

**P.S**Do you have other streams of income that you can rely on? Do you upgrade your skills on a consistent basis? Do drop a comment and I will see you in the comment section.

If you like this article, please digg, stumble or bookmark it in de.li.cious. Why not subscribe to my blog and have my articles delivered free to you? You can either subscribe via RSS or Email updates. (It is free!)

Post from: Health Money Success

10 Things To Do If You Lose Your Job

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Myths of a Millionaire

Think of a millionaire lifestyle now. So what did you think of? Super cars? Fancy restaurants? Or owning an island?

Whenever we think of a millionaire, images of them driving super cars, dining at the finest restaurants or owning the huge property with a castle built on it are generated in our mind. Yet how much truth are there in these pictures? I believe the media and fairy tales have shown us too much false images of the guys in the “Super Rich Club”.

Research has shown otherwise. 80 percent of the millionaires generated their wealth in one generation and on average, millionaires live a decent lifestyle instead of the luxurious lifestyle that we thought of. Most of the millionaires are frugal and they may be driving a normal 1.6L car instead of a Ferrari.

Case Study: Warren Buffett VS Michael Jackson

Warren Buffett

Warren Buffett is one of the world’s richest man and he is unique among the billionaires as he generate his wealth purely by investing.

Buffett is extremely frugal and is always protecting his capital. He buy clothes off the rack instead of having it tailor make and drive his own car instead of having a chauffeur. He is still living in the same house he bought 50 years ago for $31,500.

He is a classic example and role model for us to follow in order for us to become a millionaire.

Michael Jackson

Michael Jackson is one of the most famous people in the world and he make a great name for himself in the music industry. He has made millions and splurged millions.

He once spent $6 million in a single store(I’m really curious what he really bought there) and he live an extravagant lifestyle. He bought a piece of land near Santa  Ynez, California and built Neverland Ranch which consist of Ferris wheels, movie theater and an exotic menagerie at a cost of $17 million.

He got into some financial issues and ran up debts by millions. Neverland Ranch was closed as a cost cutting measure in the end.

He is a great star with great talents, what let him down is his poor financial management skills.

Lessons

First of all, we had debunked the myth of millionaires must live in big houses and have chauffeurs driving them around. We can see that Buffett simple lifestyle got him to where he is today so choosing him as your role model isn’t a bad choice.

In Michael Jackson’s case, we can see that the false image of millionaire is doing him more harm than good. Splurging, extravagant lifestyles and not making profitable investments are the reasons for his downfall.

8 Habits of a Millionaire

1. Frugal lifestyle – In order to grow our wealth, we need to make sure that we are thrifty and not spending more than what we earn. If we are making $5000 per month and spending $10,000 per month, how is it possible to accumulate wealth? It is just like a pail with a hole and water is leaking non stop!

2. Cut off debt – Try your best not to get in debt but if you are in debt now, do your best to clear them up before the interest devour you. As we know compounding interest can help us earn great money but if the interest is growing in debt and going against you instead, it can be fatal.

3. Delayed Gratification – Most of the people cannot get rich because instant gratification always caught up to them. They want to enjoy the benefits now instead of having the patience to wait for future benefits. As a result, they splurged their money on things like cars and designer bags that give them instant gratification. If you are able to fight off your need of instant gratification and have a greater patience for future benefits, money will multiply into a great fortune sooner than late.

4. Being responsible – How well your wealth grow depends on you. It does not depends on your boss or others. Taking charge of your life and change the circumstances in your life if you need to. Be responsible for you own wealth and take 100 percent responsibility for it. You can complain and whine about not being in the “lucky sperm club” that are born with a golden spoon in the mouth, but that is not going to help.

5. Love and respect money – Some people tend to have a bad impression about money, with terms such as “money is the root of all evil.” I believe in the opposite instead. I believe that the lack of money is the root of all evil. So many times tragedies happened because of the lack of money. There will be people who also think that being rich will bring them lots of problems but even if you are poor, you are facing problems too, so why not face problems with a fat wallet instead?

6. Invest in yourself - Keep learning and always be willing to invest in yourself. Only by keep on learning and improving, you can then provide more value which means getting better money. Why the master always earn more than the apprentice? It is due to the difference in education and experience.

7. Be proactive – Proactive people tends to make things happen. If there are no opportunities for proactive people to make money, they will go and create their own opportunities. By far, I believe this is a very powerful attribute to have as being proactive can help to overcome any obstacles in life. Reactive people are always waiting for things to happen to them and they have no control in their life. **Note: Things rarely happen for reactive people.

8. Habit of doing more – By doing more than you are expected to, you will slowly gain recognition for your ability and you will find that there are going to be more opportunities that comes knocking on your door. If you have a $5000 sales target to hit and you are always giving in $10,000 sales figure. What do you think will happen? Your boss will recognize your talent and you can expect to be the first to get the pay rise rather than your colleagues that are doing just fine. Even if your boss did not recognize your effort, I believe that other companies does!

Do you have any other traits that you think millionaires should have? What are the traits that you possess now and what are the traits that you wish to acquire? Remember to share your thoughts at the comments section.

Cheers
Vincent
Personal Development Blogger

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