A Multi-Millionaire Shares His Advice On How To Become Rich

I read an excellent article today over on MoneyTalksNews.

Stacy Johnson, the creator of the site and a multi-millionaire, shared his top ten pieces of advice for those wanting to follow his path and become a millionaire themselves.

He said these ten rules are “the best of the best” of those that he heard and learned over his 40-year career.

When a successful person wants to share their knowledge, I am certainly listening.

Since I had recently acquired a bunch of John C. Maxwell courses from my local Goodwill, I feel that this quote of his is most appropriate.

“It’s said that a wise person learns from his mistakes. A wiser one learns from others’ mistakes. But the wisest person of all learns from others’ successes.”

Let’s start learning, eh?

1: NEVER SPEND MORE THAN YOU MAKE, EVER.

A recent study from CareerBuilder found that 78% of Americans live paycheck to paycheck.

At best, these people are treading water. Most likely they are drowning slowly.

Why is that? I mean we all have different incomes. Do they earn exactly as much as their neighbors?

I don’t think they do. Yet they live in the same area with similar housing costs and probably shop at the same grocery store.

So why are both of them living paycheck to paycheck but with different incomes? Bluntly, it’s probably not their income that is the problem. It’s because they can’t control their financial spending habits.

Stacy says getting richer every month is as simple as spending less than you make.

2: AVOID DEBT LIKE THE PLAGUE.

Do you know what you have when you don’t have debt? Money!

It’s not complicated people. Putting that vacation on the credit cards and then making the minimum payments
guarantees that you will have to work even longer to pay it off than if you had just saved up the money in the first place.

Paying interest on your debt makes you poorer, earning interest on your investments makes you richer.

Stacy says to only pay interest under two conditions;

• In order to survive
• When you buy an asset that will earn you more than you’ll pay in interest.

3: BUY WHEN EVERYONE IS FREAKING OUT, AND SELL WHEN EVERYONE THINKS THEY CAN’T LOSE.

Economies are cyclical. Always have been, and always will be.

People don’t learn though, and so human nature will cause the majority of people to buy high and panic sell low.

Rich people make their money buying assets when everyone else is in panic mode.

Hmm, that reminds me that we just hit a low of unemployment and businesses are hiring like crazy. I wonder which part of the cycle we are near. (Hint: the higher side)

4: YOU CAN EITHER LOOK RICH OR BE RICH, BUT YOU PROBABLY WON’T LIVE LONG ENOUGH TO ACCOMPLISH BOTH.

“Fake it until you make it” is probably not the best way to handle your finances.

Remember rule #2? Buying those expensive things using debt will make you poorer in the long run.

Heck, most people who make it big still just wear jeans and a t-shirt. Because one you “make it” you really don’t care to display it.

Most people who look rich are actually far from it.

5: LIVE LIKE YOU’LL DIE TOMORROW, BUT INVEST LIKE YOU’LL LIVE FOREVER.

Live life in a full way (which doesn’t have to cost much money), but always be putting some money away for the future. That way you are not sacrificing the future for the present.

Nobody wants to grow old and eat cat food.

6: THERE ARE ONLY SIX WAYS TO GET RICH.

• Marry into money
• Inherit money
• Exploit a unique talent
• Get exceedingly lucky
• Own or lead a successful business
• Spend less than you make and invest the savings wisely over long periods of time.

Stacy says that even if your plan is one of the first five, always do the last one and you are guaranteed to eventually become rich.

7: THE RISKIEST THING YOU CAN DO IS TAKE NO RISK.

Sure, you can invest $250 per month in bank CD’s and earn maybe 3% a year. If you do that for 40 years you will have $230,000.

Invest that same $250 every month earning 12% annually and you will end up with almost $2.5 MILLION.

That 2 and a quarter million dollar difference is huge and a result of taking a chance. Yes, a CD is guaranteed, but after inflation you are hardly even coming out ahead.

You have to take calculated risks to become wealthy. You have to put your money into a situation where it can go down in value. But you have to do it intelligently. Research and study can mitigate the worst of the risk.

8: NEVER MAKE YOUR WELL-BEING SOMEONE ELSE’S RESPONSIBILITY.

Stacy says to never turn over complete control of your money to someone else. He says to learn all you can about finance as it is actually pretty simple when you get down to it.

Seek advice from those in the field, but always control where your own money goes as no one else but you cares more about it.

9: WHEN IT COMES TO INFORMATION, LESS CAN BE MORE.

The news cycle is endless in modern society. The media will blow any tiny thing out of proportion just so they can keep talking. Often, the news will be negative as fear holds human attention better than good news.

If you watch your investments every day you will eventually sell out over some minor thing you read or heard about.

So buy high quality investments and hold them for a long time.

10: TIME ISN’T MONEY; MONEY IS TIME.

You can get more money, but your time is finite.

People often use this as an excuse to spend all their money having fun today.

I see it differently.

The money I am saving today will be used to buy me time in the future as I will no longer have to work to support my family. Investments will do that instead.

I don’t seek to become rich for material sake, but to claim back my limited time.

Stuff or Time?

Wow, ten great tips that will help you grow rich and live the life you want.

As Stacy says, it all really boils down to this: stuff today or time tomorrow. Those who choose the former often stay poor. Those who choose the latter often get rich.

Which one will you choose?