1. PAY YOURSELF FIRST.
- Whenever we got a check for our birthday or Christmas, my mom always told me, “Pay yourself first.” She wanted me to keep some of that money for myself for later. We always put our checks in our bank account, and then took out the amount we wanted to spend instead of just cashing the whole check.Now as an adult I still pay myself first. Ten percent of every paycheck goes into my 401(k), and another 10 percent goes into my IRA. I don’t even see that money in my checking account because the funds are automatically withdrawn. I never miss the money, and my accounts are growing. I’m only 38, but I’m close to having $1 million saved.
2. DON’T’ PUT ALL YOUR MONEY IN ONE PLACE
- My older brother always told me never put all of my money in one place. The first time we traveled together on an airplane by ourselves, he put a $20 bill in my shoe, another in my back pocket, and a fifty in my suitcase. I don’t even think I owned a wallet.This practice has stayed with me over the years. I have an amount of money in a money market savings account, an amount in a Roth IRA invested in mutual funds and a 10-year deferred annuity with an income rider for my retirement income.
3. LOOK FOR OPPORTUNITIES
- “Get a paper route,” my dad told me whenever I asked him for money. I think he started saying that to me when I was four. Problem was, I lived in the country where the houses were too far apart for me to bike. “Doesn’t matter,” he said. “If you look hard enough, you can always find an opportunity.”He was right. I did get a job, feeding my neighbor’s sheep when they were out of town. Word spread, and I started my first small business. By the time I was 18, I had over $10,000 saved.
4. SAVE BEFORE YOU SPEND
- My grandmother had this old yellow tin with a picture of a lemon on it that she kept on the kitchen counter. In that tin, she put the money she was saving. “This is for our trip to Italy,” she would say, tucking in a five dollar bill. As a kid, it excited me every time I thought about that tin, and everyone in our family put money into it. I’m sure she must have emptied it out a few times and put the money in the bank, but what stayed with me was that grandma never bought anything unless she had saved up for it first.
5. LIVE BELOW YOUR MEANS
- I had a financial planner for a dad, and he told me that the only thing I had to do if I wanted to save $1 million was to live below my means. It didn’t matter if I was a school teacher, a plumber, or a truck driver, if I lived below my means, I could become a millionaire.He showed me how to do it. Whenever I got a paycheck, we divided it up into three parts: an amount to save, an amount to give, and an amount to spend. I used my “give” money for birthday presents for my family and friends. I used my save money to buy my first car. I’ve never been in debt, and I saved my first million before I got married.
6. SAVE MONEY TO MAKE MONEY
- My grandpa always used to say, “A penny saved is a penny earned.” On the weekends he would give me a pair of scissors and the Sunday paper and pay me 10¢ for every coupon I cut out. I used to get excited when I found the dollar coupons.A lot of people I know spend more money when they save money because they feel like they got a bonus. I don’t look at it that way. Every dollar I can save is a dollar that I can put to work for me earning interest. I’m always looking for ways to scoop up more money to put into my interest-bearing accounts.
7. DON’T PUT OFF TOMORROW WHAT YOU CAN DO TODAY
- When I was a kid, I watched a bunch of men in suits come and take away our family cars. My dad was rich and had a lot of speculative investments in real estate and oil. His financial advisor warned him about these investments and told him he needed to get out of them. My dad knew they were risky and he kept saying, “I’ll wait until the end of the year.” Then he said, “I’ll wait until I hit the $2 million mark.” Then he said, “I’ll wait until I’m 60.” He kept putting it off, and then one day, he lost it all.