Almost everything I post has something to do with estate planning or business planning, which shouldn’t be surprising given what I do for a living, right?! Well, I received such an overwhelmingly positive response back from my e-newsletter this week that I decided to post most of it here. Sure, it doesn’t have much to do with estate planning or business planning (except a little bit at the end), but I hope you find it valuable nonetheless like many of my e-newsletter readers did. And if you want to receive my weekly e-newsletter, just contact me and let me know.
Although having a million bucks isn’t what it once was, it’s still a VERY sizable chunk of security that I’m sure any of us wouldn’t mind having. In fact, Reuters recently reported that in 2009, there were 7.8 million millionaires in the United States. Surprising? It was to me.
That’s a lot of people! And the odds are one or two of them are living near you. One of them might even be your neighbor. In fact, the odds are very good that it is your neighbor.
“But, Mike, you don’t know my neighbor. That family doesn’t look anything like a millionaire.”
Well, guess what? The suburban millionaire neighbor called (yes, we go way back) and we had a nice little chat. And here are a few things they shared with me–but apparently don’t want to let out of the bag. (No offense, I’m sure.) I write that in jest . . . actually these are nuggets I’ve garnered from books and articles I’ve read. And let me tell you, I’ve made almost every single one of these mistakes so I’m writing to myself (yet again) and still haven’t put all of them into practice. I hope you find this as helpful as I did.
1. They always spends less than they earn. In fact their financial approach is, over the long run, you’re better off if you strive to be anonymously rich rather than deceptively poor.
2. They know that patience is truth. The odds are you won’t become financially wealthy overnight. If you’re like them, your financial wealth will be accumulated gradually by diligently saving your money over multiple decades. (Don’t forget about your “intangible” wealth either – who you are and what’s important to you! We all have that in abundance!)
3. When you go to their modest three-bed two-bath house, you’re going to be drinking Folgers instead of Starbucks. And if you need a lift, well, you’re going to get a ride in his ten-year-old economy sedan. And if you think that makes them cheap, ask them if they care. (They don’t.)
4. They pay off their credit cards in full every month. They understand that if they can’t afford to pay cash for something, then they can’t afford it.
5. They realized early on that money does not buy happiness. Rather, you need to focus on attaining financial freedom.
6. They understands that money is like a toddler; it is incapable of managing itself. After all, you can’t expect your money to grow and mature as it should without some form of credible money management.
7. They’re big believers in paying yourself first. It’s an essential tenet of personal finance and a great way to build your savings and instill financial discipline.
8. Although it’s possible to gain financial wealth if you spend your life making a living doing something you don’t enjoy, they wonder why you do. Life is too short.
9. They also know that the few millionaires that reached that milestone without a plan got there only because of dumb luck. It’s not enough to simply declare that you want to be financially free. This is not a “Secret.”
10. When it came time to set their savings goals, they weren’t afraid to think big. Financial independence demands that you have a vision that is significantly larger than you can currently deliver upon.
11. They realize that stuff happens, that’s why it’s a mistake if you don’t insure yourself against risk. Remember that the potential for bankruptcy is always just around the corner for all of us and can be triggered from multiple sources: the death of the family’s key bread winner, divorce, or disability that leads to a loss of work.
12. They understand that time is an ally of the young. They were fortunate enough to begin saving in their twenties so they could take maximum advantage of the power of compounding interest on their nest egg.
13. They’re not impressed that others drive an over-priced luxury car and live in a McMansion that’s two sizes too big for their family of four. Little about external “signals” of wealth actually matter to them.
14. After six months of asking, they finally quit waiting for the return of their pruning shears. They broke down and bought a new pair last month. There’s no hard feelings though; they can afford it.
15. They don’t pay taxes and fees which could have been avoided with a simple phone call. They plan ahead before trouble strikes. Oh, and here’s the number they call to keep their family taken care of: (616) 827-7596 (that’s us 🙂)
Michael Lichterman is an estate planning attorney who helps families and business owners create a lasting legacy by planning for their Whole Family Wealth™. This goes beyond merely planning for finances – it’s about who your are and what’s important to you. He focuses on planning for the “experienced” generation, the “sandwich generation” (caring for parents and children), doctors/physicians, nurses, lawyers, dentists, professionals with minor children, and family owned business succession – and he is privileged to do so from a Christian perspective. He takes the “counselor” part of attorney and counselor at law very seriously, and enjoys creating life long relationships with his clients – many of which have become great friends.