8 Ways Millionaires Become Wealthy

Thomas Stanley, Ph.D. having studied affluence found that there is a pattern which the wealthy follow. Education, planning, work, perseverance, passion, and self-discipline determined who became wealthy and who didn't. On the other hand people who tended to complain, blame and refuse to take responsibility in their life are poorer and never build wealth. Yet, so many people continue to believe wealth is something out of their reach.

“Most people have it all wrong about wealth in America. Wealth is not the same as income. If you make a good income each year and spend it all, you are not getting wealthier. You are just living high. Wealth is what you accumulate, not what you spend.” -Thomas Stanley, Ph.D., and William Danko, "The Millionaire Next Door"

“My national surveys of millionaires have taught me that if you believe you can succeed, the probabilities are greatly enhanced that you will reach or even exceed your goals. The millionaires often indicated that “believing in myself” is a proactive tactic or thought process that works when they employ it. They utilize this process when fear and worry are conjured up by the need to make critical decisions about their career, business, or other economic resources.” --Thomas J. Stanley, Ph.D., "The Millionaire Mind"

Wealth is reachable by everyone, yet so many people believe it's out of their reach, far beyond where their are. This one simple belief keeps them from ever knowing or experiencing financial stability, or even financial freedom. What follows are 8 distinctions that separate the people who build wealth from those who do not. Putting these simple ideas to use in your life can help set you on the path toward becoming wealthy.

1.) Education, Education, Education

There is absolutely no excuse whatsoever to not continue to learn something, anything or to keep up your skills. Reading is the easiest and best way to keep learning. I'm not talking about fiction here, it is all about reading the non-fiction books that will teach you something, skills, but it doesn't mean you can't occasionally enjoy a book of poems or historical stories. Parents should start their children early and encourage them to read and read with them, later in life it will help them to not only get a good job, it also helps them to learn new things they didn't get from formal education, like personal finance. Reading is something easily passed along from generation to generation. It enriches you and the earlier you start, the sooner and more enriched your children will be. Education is something you should never stop or you you become stagnant, and people who are stagnant are standing still will never realize their own wealth.

2.) Choose the Right Occupation

I'm sure you've heard, do what you love and the money follows, works for so many people. The 'Right Occupation' doesn't always mean having a title or working for a particular company, instead, it means the right occupation for you.

Have a good idea of what the affluent do. Of the 80% of the millionaires are self-made individuals, many are business owners, entrepreneurs. Keep in mind that entrepreneurs are 4 times more likely to become millionaires than those who work for others, but not always necessary. There are plenty stories of wealthy people, ordinary people, who worked as a waitresses, sales people, a parking lot attendant – who although not a millionaire are wealthy. There is not one kind of business, or group of businesses more likely to create millionaires. Some millionaires are lecturers, medical professionals, farmers, small manufacturers, and the corner mom and pop store owner. The most important predictor is the characteristics of the owner, than the type of business. It's the winning combination of skills and attitude that allows you to hit the bullseye on the wealth target.

3.) Live Below Your Means, Be Frugal

Frugality is not a dirty word or dirty thing and the sooner you realize this the sooner you begin to build wealth. Many millionaires do not look like a millionaire! The key word is, frugal, being frugal, and living frugal. Wealthy do not go out spending all their money every month. They budget. Frugal is not a bad word or means you have to live like a miserly scrooge or go without. It's all about making better spending choices by creating and following a budget. The typical person in America has caught the affluenza bug [www.pbs.org/kcts/affluenza], being a good consumers making others rich. People have become followers, not leaders. People work hard all day; week and month to make money and then spend it all. Not a millionaire! An interesting note: Millionaires on average claimed their spouses were just as frugal or more than they were. Giving up senseless consumption today, right now, in order to realize wealth and financial freedom tomorrow. There is no reason to live like a pauper, it just means you spend your money more wisely, especially seeing how money can be used to make more money.

4.) Choose Financial Independence over Faking Social Status

People who are wealthy run highly efficient operations both in business and in their own home. Most live in average neighborhoods, dress reasonably, and drive average cars. They're not interested in keeping up with the “Jones” - because the “Jones” don't exist and they certainly aren't wealthy. It takes more energy to pay for a big mortgage, upgrade to the most recent flashy model car, or wear the latest fashions. The wealthy don't do any of these things. Many millionaires do not live a status lifestyle often advertised or presented in movies, they live a very average, ordinary life.

5.) Spend Your Time, Energy, and Money To Build Wealth.

Although the road to becoming a millionaire takes a frugal life, they pay well for training and advice, and do their own investment planning. It doesn't mean they don't rely on others to help them, it means they make more informed investments. They hire a good CPA and attorney, mentors and coaches. They continue to learn to identify and invest in assets that produce income. The wealthy spend money when the investment will protect or grow their assets. Millionaires also know the details: How much is spent each month on food, clothing, and shelter. They keep a budget. People who are Not wealthy say they don't have time to plan. The wealthy make time to plan. The big shocker: The average millionaire spends 8 ½ hours each week planning their finances, while the non-affluent spend maybe 4 ½ hours each week, or less, going financial planning. How can 4 more hours each week impact your financial future? The extra time allows you to make better choices. It's only 2 hours each week. Not a lot of time when you think about the results, wealth.

6.) Teach your children to be financially self-sufficient.

Children who grew up learning to be financially self-sufficient, learned to be disciplined and intentional with their money had an easier time at gaining wealth and maintaining it. Robert Kyosaki, author of Rich Dad Poor Dad, didn't cave in when his son at 16 asked for a car, even when the neighbor's kids were being given cars by their parents. He gave his son $3 thousand, a subscription to the Wall Street Journal, and some books on investing in stocks. Now Rich Dad's son watches more CNN than MTV. He has the motivation, and is getting an education that will provide him for a lifetime, well beyond his first car purchase. This is exactly what you need to do!

Far too many children are given video games and things which occupy them in ways that will never benefit them. If, instead, parents sat them down, set up a financial plan and helped them save their money toward a specific goal, to buy a video game, they will spend much less time playing it and much more time learning to or earning money. It is a shift in focus. Instead of just giving children things, teach them how to earn and save toward having the things they are interested in owning.

7.) Don't Get Support from Your Parents After You Move Out

Parents, if your children seem lazy it is because you haven't motivated them. You haven't taught them to be anything else. Parents have to get over the idea that they need to “give” their children a better life! Parents certainly can help them pay for higher education, but nothing beyond that. Start at an early age by having them work for their allowance. That's right, make them work around the home, but don't turn them into slaves or you'll be teaching them the wrong thing. Sounds painful doesn't it? Teaching how to earn, keep, and invest money is the only way they will get it. Wealthy parents do not, or cannot, provide ongoing economic support to their children. The results are clear: The more dollars the adult children receive, the fewer they accumulate or learn to invest. Those who are given less, or no money at all, are more motivated to accumulate more on their own. An amazing fact: 80% of millionaires are first generation millionaires; they have made their money on their own, in their lifetime. Many of these folks have been immigrants to the U.S., starting out with minimal cash on hand. Work hard, educate themselves and generate wealth. That is the is the “American Dream,” not how much money you can spend on stuff.

8.) Turn Knowledge Into an Income

Find a niche that makes you happy to increase your income. Follow where the money flows, and look for opportunities. Why not take what you know to help fund your financial future? A few suggestions: Investment advice, business training, create software, tax advice, legal, tie fishing lures, medical, dental, recycle, health, create a green business, or teach others about being green. Education is a top priority. People pay well for products and services that protect and grow their assets. Remember many of the wealthy are self-employed entrepreneurs. Even a hobby can be turned into an income producing venture as long as the money earned is reinvested in making more money.

NOTE: The affluent attribute their wealth to being honest with all people as the most important characteristic in their business, tied with being well disciplined in their saving and investing strategies. The vast majority of the wealthy were not stellar students, or born into money. They made it through following a few simple principles, being consistent and goal oriented. Don't lose sight of where true wealth and happiness comes from along the way.

Read "The Millionaire Mind" by Thomas J. Stanley, Ph.D.

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