“The Millionaire Next Door” an exclusive book that elaborates about the basic and special behaviors of the millionaires, is written by author Thomas J. Stanley. To write down his book he interviewed more than 500 millionaires and researched their habits. During his surprise, he was surprised to know that, these millionaires are frugal, most of them were less interested in spending on luxury items. In fact, they were more interested in spending on investments and other things that grow their net worth.
While researching on the habits of millionaire’s he came to know the fact that about 80% of the were first-generation affluent and were self-made through a combination of their habits, incomes, and investments.
In his books, he has very clearly explained about habits of millionaires. Especially he has explained that three money habits that successful self-made millionaires avoid at all costs. Let us know about these three habits.
Credit Cards Are Less Preferred By Them
As per Stanley’s research, the self-made millionaires don’t prefer an exclusive card with a high fee, rather they prefer lower-fee credit cards. Well, the reason behind this can be, the elite cards like platinum and gold credit cards have nice perks for traveling and spending, but at the same time they also often have high fees.
He found that only 6.2% of millionaires he surveyed had the Amex Platinum, and fewer had other high-level credit cards, while 59% of millionaires surveyed had a lower-fee Visa card, and 56% had a MasterCard credit card.
No Large Gifts for Their Children, No Financial Support As Adults
Millionaire parents, just like other parents, believe education is important for wealth-building, but most wealthy parents and grandparents also know where to draw the line with supporting adult children.
He has written in his book that supporting adult children didn’t benefit either group. He wrote that parents who provided some kind of help to adult children had significantly less wealth than those parents of the same age, income, and occupational cohorts whose adult children were economically independent.
However, we can waive out those millionaire parents who give only sporadic, large gifts to their children. Like some parents help their children get home, while some parents gifted their children income-producing real estate.
They Don’t Spend Hours Managing Their Investments
In his book Stanley has written that the prominent part of a millionaire’s wealth strategy is, trading in the share market and investing in mutual funds.
However, these millionaires don’t have a bad habit of touching their investments or analyzing their portfolios very often. Millionaires tend to buy and hold investments for many years, allowing their investments to both appreciate and fall into a different category than excludes them from higher short-term capital-gains taxes. Simply millionaires follow a simple strategy while investing, they start investing early, and take it for the long-term. For most millionaires, investing is a simple, hands-off process.