How To Become The Millionaire Of Tomorrow
It has been bandied about that a million bucks isn't what it used to be. That a million dollars just simply isn't a lot money (I even stated that in one of my blog posts). That a million dollars just isn't any type of status symbol anymore. While it is true that with real estate holdings, collectibles, and business valuations that more people are "millionaires", have one million dollars of liquid cash between brokerage and IRA accounts is still far and few between for the X & Y generation let alone baby boomers. Since we live in a super-size society today, I wanted to give you my four Your Smart Money Moves tips on how to be the millionaire of tomorrow.
- Pay Off Your Home. Buying a large home can be one of the big money drainers for an individual to have success to reaching a million dollars of liquid cash. What's more incriminating is that when people refinance, they simply forget that in general they start a new 30 year window. This means it could take you 40 or 50 years to pay off your mortgage. Liquid millionaires recognize the need to pay down their note and get debt free.
- Save. Save. And Then Save. The 10% rule doesn't really even apply anymore. You must get to saving 20% off the top and then build the rest of your life off the bottom. Every time you get a raise, you must force the increase in your savings pattern or the money will find a way out of your checking account. Money always chases something, you just don't want it to be vacations, automobiles, and too many fancy dinners.
- If At All Possible, Avoid Divorce. I would be an advocate for delaying getting married at all if you were even remotely worried about getting a divorce. Divorce is absolutely in my top three for crushing the dreams of becoming a liquid millionaire of tomorrow. Every once in a while, you can have a playboy type business owner who can navigate through a divorce or two, but for most folks the child support, alimony, and other bills simply make the liquid millionaire a difficult pinnacle to reach.
- Buy Used Cars. This is a Your Smart Money Moves theme. I haven't purchased a new car for our family in over 20 years. This simple tip alone can literally add $100,000 or more to the bottom line from down payment savings, depreciation savings, and overall maintenance. Go two to three years old and drive it until the cost of upkeep becomes more expensive than a new car payment.
The Millionaire Of Tomorrow (MOT) is a term you will hear more of over the next decade. These are the people between the ages of 25 to 55 who are building their way up to what is still considered an important benchmarking point for financial success. Don't focus on the net worth millionaire number, but rather what would it take to get to a million of liquid assets so you can make work optional and begin to have your money recreate a stream of income for you. Use these four Your Smart Money Moves tips to help you turn your six figure income into a seven figure bank account.
