Much has been written about the traits and habits of the vastly wealthy, and how they amassed their wealth. But, if you do further research, you will find that the most affluent among us keep and grow their financial assets with the time-honoured, tested and completely doable methods of analysing their budgets and living beneath their means.
Below, we have listed the five best personal finance tips from the world’s wealthiest:
1. Start young: Carlos Slim Helú, a Mexican businessman who was ranked as the richest person in the world in 2007 and then again from 2010 to 2013, advises that the sooner you start managing, saving and investing your money - however limited - the better off you will be in your old age.
2. Live humbly: Nothing drains your wealth faster than living in a house that stretches your monthly budget to the max. In this situation, just one small financial hiccup can throw your budget into stress and force you to raid retirement funds. Billionaire Warren Buffet still lives in the same house he bought in 1957 for $31,500.
3. Distinguish needs from wants: Most personal finance tips stem from this bit of wisdom, and those who want to preserve their wealth would do well live by this maxim. For example, avoid buying the most expensive car you can afford, or needlessly upgrading it every year. Ingvar Kamprad of Ikea drives a 10-year-old Volvo, and Walmart billionaire Jim Walton drives a 15-year-old bakkie.
4. Insure against risks: Bankruptcy or other financial hardships can result from being unprepared in times of disaster, for example; the death or disability of the breadwinner can put a family under immense financial strain. Brett Wilder, qualified financial planner, author of The Quiet Millionaire and millionaire himself, advises consumers to protect against such risks through insurance to protect their wealth. However, he cautions that many people either fail to get adequate insurance or pay too much for it because they don’t understand it.
5. Budget, budget, budget: Self-made millionaire and blogger Jen Smith recommends tracking how much you spend each month to evaluate if you are living within your means and where you can cut back. Ms Smith also that maintaining a good credit score is fundamental to becoming and staying a millionaire. "A good credit score can save you thousands of dollars over the course of your lifetime," she says.
In most cases, becoming a millionaire is a not about luck, it’s all about a measured approach to building wealth over time. Almost anyone earning a reasonable salary can become wealthy; it starts with making the decision to be proactive about your money and sticking to a plan.