Millionaires’ Club [9 Pictures of Myself at one of my Sunday buffet lunches (Sheena Ricarte, August 2023)] (5 Articles)
~ Thursday, July 6, 2023 Blog Post ~
“Millionaires’ Club” by Sheena Ricarte, July 1, 2023 [9 Pictures of Myself at one of my Sunday buffet lunches (Sheena Ricarte, August 2023)]
My preferred understanding and definition of “the millionaires’ club” is that comfortable financial status when a person has reached the 1-million (state monetary unit or currency here) mark. It doesn’t matter whether that person is a US dollar, pounds sterling, riyal, ringgit, rupee, dinar, or peso whatsoever millionaire. The point is, the person successfully struck it rich by landing on the 7-figure mark. He has surpassed the 999,999.99 (state monetary unit or currency here) savings level.
The “millionaires club” member may have achieved his financially fortunate status through inherited wealth, self-made wealth, or winning the lotto, which makes himself a parvenu. Aggressive saving and investing habits can also play a significant part in gaining entry into the much-coveted millionaires’ world.
I must say being a part of “the millionaires’ club” is comfortable, especially if the millionaire doesn’t have any debts or has few financial obligations and is financially savvy. Sitting on a 1-million (state monetary unit or currency here) cash pile allows one to plan the future, start a small business, settle any payables, help people who are near and dear to them, take a long and recharging breather or vacation, and have a good night’s sleep. Indeed, the wonderful possibilities are endless when someone is a millionaire.
Again, these advantages are within reach for a “millionaires’ club” member if he doesn’t have too many loans or financial responsibilities and is financially astute. Otherwise, his millionaire status is fleeting. The “millionaires club” member can revert to being a “hundred-thousandaire,” or if he is not financially literate or responsible, he can be a “one-day millionaire.” That is, from riches and then after merely a short period, back to rags or living a hand-to-mouth existence, which is surely awful.
Article #2: 67-year-old millionaire regrets not teaching his kids these 6 top money lessons when they were young (From CNBC)
By Michael Yardney, March 27, 2020
If we don’t teach our kids smart money lessons early on in life — starting from their kindergarten years and into adolescence — they’re likely to make big financial mistakes as adults.
Looking back, at 67, one of my biggest parenting regrets is not prioritizing my kids’ financial literacy. (It’s a bit ironic, given that my entire career has always revolved around personal finance.)
My children are all grown up now, with kids of their own. But if I could go back in time, these are the lessons I would have instilled when they were young:
1. You may have to wait to buy something you want
Kids need to learn that if they really want something, they should wait until they’ve saved enough money to buy it on their own.
The problem is that we all want the best for our children, which is why a common trap for parents is to give their kids everything they feel they missed out on growing up. Trampoline in the backyard? Check. Brand new clothes every season? Check. New toy every weekend? Check.
If that’s your style, what you might end up with is an entitled child with an impatient attitude geared toward instant gratification.
Patience is key. Instead of buying a $20 toy for your child immediately, have them save $5 per week for one month. They will appreciate and value that toy so much more because they worked extra hard to earn it.
2. He or she who dies with the most toys is not the victor
We all like having things. But expectation is a dreadful enemy of money management.
We see so much of how “the other half live” in glossy magazines and on social media. Their lifestyles are glorified, making many of us think that life is all about working hard — just so that we can be one of the “have mores” of the world.
But possessions don’t make for a rich life. It’s the experiences and people — the things that money can’t buy — that make you truly wealthy. In my mind, “true wealth” is what you’re left with if you lose all your money and possessions.
3. The sooner you save, the faster your money can grow through compounding
Using compound interest to grow your wealth relies on more than just money — it relies on time.
In fact, given enough time, compounding (which happens when you earn interest on both the money you’ve saved and the interest you earn) is so effective that Albert Einstein called it the most powerful force in the universe.
When you encourage your kids to start saving and investing as early as possible, they’ll be more likely to secure their financial future.
4. Put more focus into passive income
Not all income is created equal. Some streams are linear and some are passive.
Linear income is what you get from a job. You might work for an hour and get paid every other week for the hours you worked. That’s it. If you don’t show up for your job, you don’t get paid.
Passive income is when you work once, but continue to get paid over and over again from work that you’re no longer doing. The way to become wealthy is having passive income coming in, whether you go to work or not.
This is how property investors think: Initially they work long hours, save up a deposit, and then invest it. Now their money starts working for them and keeps giving them sound investment returns “passively” in the form of capital growth and rental returns.
5. Today’s debt equals tomorrow’s misery
When we’re young, we tend to think about what will make us happy today, not tomorrow or 10 years from now. Unfortunately, this is what leads many to credit card debt or a lack of retirement savings.
Teach your kids that today’s debt will rob them of tomorrow’s earnings, because they’re sacrificing money they don’t yet have. Limiting debt obligations when you’re younger will mean having more control over your personal finances later on.
6. Luck is made through hard work
Many of us like to attribute the success of others all to “good fortune.” Maybe those successful people were “in the right place at the right time” or maybe they “knew the right person.” But truly successful people do the hard yards to reach the pinnacle of their chosen field or endeavor.
If you can find something you’re passionate about and make a living out of it, you’ll be far more likely to achieve great things, including financial freedom.
Michael Yardney is the best-selling author of eight books, including “Rich Habits, Poor Habits” and “How to Grow a Multimillion-Dollar Property Portfolio.” He is also an investment consultant and the host of the Michael Yardney Podcast. Follow him on Twitter @michaelyardney.
Don’t miss:
- Warren Buffett: This is the №1 mistake parents make when teaching kids about money
- 38-year-old retiree: America, stop wasting your money on these 7 things — if you want to retire early
- Self-made millionaire: This is the №1 way to get rich — and most young people are not doing it
Source:
Article #3: You Could Be a Millionaire and Not Realize It — Here’s How to Find Out (From RealSimple.com)
By Nafeesah Allen, Ph.D., November 5, 2022
There’s more than one type of millionaire — and you just might be one of them.
According to Credit Suisse, at the end of 2020, “the global number of millionaires expanded by 5.2 million to reach 56.1 million.”1 While this report was encouraging news for the global economy, it also reported that an adult now “needs more than $1 million to belong to the global top 1 percent.”
What Makes You a Millionaire, Anyway?
Hitting that coveted seven-figure mark has long been the definition of wealth, but rising inflation and job insecurity seem to keep pushing the goal post further away. As a result, people have gotten equally as creative about defining wealth — and what it means to be a millionaire — more broadly.
Yes, most people who are trying to achieve wealth still want to attain seven figures. But they know that that first million has to lead rather quickly to many more if you’re aiming for long-lasting wealth. Financial coaches Anna N’Jie-Konte and Gary Stewart say that anyone aspiring to the millionaire moniker needs to first define for themselves what kind of millionaire they want to be — and only then chase that aspirational goal.
Ahead, these wealth coaches explain the difference between being a cash-flow, net-worth, or asset-value millionaire, and why it is possible that you could be a millionaire today and not even know it.
There are three primary definitions of a “millionaire.”
“The most basic definition of a millionaire is somebody who has $1 million,” explains Gary Stewart, a financial coach and CPA based in Alexandria, Va. But he says that definition can be misleading when comparing net-worth millionaires, asset-value millionaires, and cash-flow millionaires.
“For example, a cash-flow millionaire is someone who owns assets that pay out (or cash flow) $1,000,000 in a year. An asset millionaire is someone who, if they had to sell everything and pay off any liabilities, would have $1,000,000 left over. A net-worth millionaire is someone who has a net worth of at least $1,000,000. Net worth is a fancy way to say ‘what you own minus what you owe.’ If that amount ends up being $1,000,000+, you’re a net-worth millionaire.”
These definitions have distinct differences that affect real wealth calculations. Stewart says net-worth millionaires focus most on real wealth, while a cash-flow millionaire typically would “require a ton of money invested, royalties, profits from a business, or income from real estate. Very few people will become cash-flow millionaires because it takes a lot of work to build a business or portfolio of that magnitude,” he explains.
Instead, most Americans are asset millionaires, who own a home that is worth a significant amount of money. Also, they may add retirement and investment accounts together to reach the $1,000,000 threshold. Thus, while it is possible to be a millionaire in all categories, most people would be one kind of millionaire, but not another.
Asset millionaires are rarely ever cash-flow millionaires, since their wealth is held in non-liquid assets. Similarly, net-worth millionaires may never become asset millionaires. Therefore, it is possible to be a millionaire and not realize it, especially if the value of your home or stocks rise without your even knowing it.
Liquidity is why you might not feel like a millionaire, even when you are.
Anna N’Jie-Konte, MBA, CFP, is a Puerto Rican, Gambian-American entrepreneur who spent nearly a decade working in wealth management, advising ultra-high-net-worth families ($5 million+ net worth) how to grow and secure their wealth for generations to come. She says that, similar to reaching a six-figure salary, reaching millionaire status is equally as arbitrary.
“It is not a benchmark of financial success that truly determines whether someone is doing well or not,” she explains. Feeling like a million is enough to live well depends much more on a person’s lifestyle and financial goals.
N’Jie-Konte argues that financial flexibility and liquidity are a huge part of the feeling of financial security. “These are two of the most under-discussed topics in personal finance — to everyone’s detriment,” she notes.
“Two people can have the same $1 million net worth, however, one will be much more financially nimble or able to meet life’s challenges than the other,” N’Jie-Konte explains. “For example, if one person has $1 million in equity in their home and holds a negligible cash or investment portfolio, then it will be quite difficult to access cash for whatever need may arise. Conversely, someone with $400,000 in home equity, $200,000 in a brokerage account, $50,000 in savings, and $350,000 in their 401(k) will have much more flexibility to meet whatever need or opportunity arises.”
Being nimble often gives people a sense of comfort — which varies, of course, depending on their life stage, number of dependents, and the financial stability of loved ones. This is why it is possible to be a millionaire but still feel cash-strapped. In fact, many high-net-worth individuals live paycheck-to-paycheck because of their spending habits, debt, and external responsibilities. And the rising costs associated with inflation are another factor that can reduce spending power.
Defining your millionaire roadmap is easier than you think.
Stewart says that people can look like a million bucks, but still be one step away from losing it all. To seek lasting wealth, he says that ordinary people should chart a roadmap to obtain $1 million+ in assets and zero debt.
“To secure your funds and your financial future, it is crucial to have a rainy day fund for emergencies (because life happens), avoid personal debt like the plague (debt steals your income), and continue to invest in good growth investments,” he advises.
“Do not strive for perfection,” N’Jie-Konte counsels. “Trajectory (moving in the right direction) is much more important than perfection. There is so much shame around personal finance that stops people from making real progress.”
In particular, she says that once you’ve made a choice to prioritize the type of millionaire that you want to be, it is important not to watch the clock. “Humans are inherently impatient and seek instant gratification,” N’Jie-Konte continues. “Building substantial wealth sustainably requires time, consistency, and effort. It will happen slower than you would like at first and, after a while, it accumulates quicker than you could have ever imagined.”
Source:
https://www.realsimple.com/work-life/money/how-to-know-if-youre-a-millionaire
Article #4: How Teens Can Become Millionaires (From RamseySolutions.com)
By Ramsey Solutions, March 14, 2022
If you’re a teenager trying to stay on top of your grades and figure out who you’re going to ask to prom, just the thought of becoming a millionaire sounds like a far-off dream, right? It might even seem impossible — like trying to convince your parents that a brand-new sports car is a perfect first car for a high school sophomore (good luck with that!).
But guess what? Reaching millionaire status is actually more realistic than you might think. That’s right, you (yes, you) can become a millionaire someday. And if you’re already asking questions about what you need to do to get there before you even have a high school diploma, congrats — you’re way ahead of the game!
You might not realize it, but the choices you make today will have a huge impact on where you’ll end up years from now. It’s going to take some hard work, but reaching the million-dollar mark is possible. Here’s how!
A Millionaire’s Best Friend: Compound Growth
Here’s a little secret: Compound growth, also called compound interest, is a millionaire’s best friend. It’s the money your money makes. Seriously. But don’t take our word for it — let us introduce you to our friends Jack and Blake and tell you about their adventures with compound growth.
When Jack turned 21, he decided to start investing $200 a month every year for nine years. At age 30, he decided to stop investing altogether. But his friend Blake started when Jack stopped, investing $200 a month every month starting at age 30, all the way until the ripe old age of 68.
So at age 68, who do you think had more money in their account? Let’s do the math.
At the end of nine years, Jack invested $21,600, didn’t invest another dime, and ended up with close to $2.35 million at age 68. Let’s say that again — $2.35 million! That’s the power of compound growth, friends.
And Jack’s friend Blake invested a whopping $91,200 over the course of 38 years. At age 68, he had built up $1.3 million, but he never caught up with Jack.
So how did Jack do it? He didn’t invest nearly as much as Blake did but ended up with over $1 million more. Compound growth can turn more than $20,000 invested in nine short years into almost $2.35 million over 38 years! Try our compound interest calculator that will do the calculations for you.
You Can Be a Millionaire
When you think of the word millionaire, what comes to mind? An older couple zipping their way up the coast to their summer beach home? Superstars like Jay-Z and Beyoncé with their cool clothes and private jet?
We get why you might think that at first. But guess what? There are 22 million millionaires all over the country, and most of them probably look more like that nice couple next door than the “Queen B” herself!1
Here are some fun millionaire stats from The National Study of Millionaires that will bust the image you might have of what a millionaire is:
- 79% did not inherit a dime of money on their way to a million-dollar net worth. That means they worked and saved their way to wealth.
- 62% graduated from public state universities and another 8% attended community colleges. In other words, you don’t need an Ivy League education to be successful and become wealthy.
- Only 31% had an average annual salary of $100,000 or more over the course of their careers. And about one-third of all millionaires never had a six-figure salary in their life! Mind. Blown.
- 94% of millionaires live on less than they make, compared to 55% of the general population.
The big takeaway is this: Anyone in America can become a millionaire. And the earlier you start, the better. In fact, the study found that “if members of younger generations are diligent over time, they can become net-worth millionaires in their own right.” It’s time to get started!
What You Can Do Now to Set Yourself Up for a Millionaire Future
On top of compound growth, you have another advantage your parents and teachers don’t have: more time. You see, time and compound growth go together like Taylor Swift and catchy song lyrics. Together, they can make you a millionaire!
How much will you need for retirement? Find out with this free tool!
But the decisions you make now while you’re still in high school and once you’re in college will either set you up to build wealth quickly or set you back years financially. Here are some things you can do right now to set yourself up for success.
1. Say “No!” to Student Loan Debt
You can choose to not go into any debt — not even for college. That decision alone will put you light-years ahead of your peers by the time you graduate.
Think you might want to go to that fancy private school? Think again. Sure, you might look good when you’re wearing the sweatshirt, but is it really worth it? (Trust us — it doesn’t matter as much as you think it does.) The worst thing you can do to your future is get buried in payments before you’re even out of your parents’ house!
Here are just a few ways you can get ready to pursue a debt-free degree right now:
- Apply for as many scholarships and grants as you can.
- Choose an affordable state university that offers you the most financial aid.
- Commit to working a part-time job when you’re not in class.
- Live off campus or continue living at home with your parents while you go to school.
We believe in you (and your future). Don’t get caught up in the lie that the only way to go to college is with debt. You can chase after your dreams while leaving student loan debt in the dumpster.
Our documentary Borrowed Future uncovers the dark side of the student loan industry and shows you how you can forge a better path for your future — one that doesn’t include graduating with a mountain of student debt. Watch it today!
2. Stay Away From Credit Cards
Once you step onto a college campus, get ready. You’ll be bombarded by grinning credit card representatives trying to convince you to fill out credit card applications in exchange for a free t-shirt or a slice of pizza. This is a trap, people! Run (don’t walk) in the other direction!
The sad part is that many teens fall for this schtick and end up creating a financial mess for themselves. More than half of college students (53%) are using credit cards to buy stuff, and about 40% say they currently have at least $1,000 in credit card debt and 14% say they already have a balance of more than $5,000.2 That’s just dumb.
Don’t jeopardize your financial future by buying stuff you can’t afford to impress people you barely know. It’s not worth it.
3. Live on Less Than You Make
The struggle of the broke college student is real. We get it. But you don’t get a pass on being financially responsible just because you’re in college. You can still have fun in college — just be smart about it!
Now is the time to learn how to make a budget and stick to it. Making a budget might sound boring and restrictive, but a budget doesn’t take away your freedom — it gives you freedom to give, save and spend how you want to.
4. Don’t Take Big Risks With Your Money
Some of your classmates might post about buying cryptocurrency on social media or try to convince you to get in on the ground floor of some exciting “investment opportunity.” Don’t take the bait!
Millionaires see investing as the primary tool for building wealth and securing financial peace. They keep things simple, save consistently, and stay away from big risks.
Here are the facts: 80% of millionaires say that investing in an employer-sponsored retirement plan like a 401(k) was the main way they reached millionaire status.3 Meanwhile, 74% mentioned investing outside the company plan, and 73% said the habit of saving money regularly was a key factor.4
For now, focus on graduating college debt-free — no student loans, credit card debt or car payments. Once you’ve started your career and are ready to get started with investing, make sure you connect with a financial advisor — someone who can teach you all about investing and help you pick and choose the right investments for your portfolio. Our SmartVestor program makes it easy to find qualified investment professionals who can serve you.
5. Follow the Baby Steps
If you want to win with money, you have to have a plan. And the plan that has helped folks all over the country build wealth and become millionaires over time is Dave Ramsey’s 7 Baby Steps. This is a plan that works!
What exactly are those Baby Steps? We’re glad you asked! Here they are in order:
- Save $1,000 for your starter emergency fund.
- Pay off all debt (except the house) using the debt snowball.
- Save 3–6 months of expenses in a fully funded emergency fund.
- Invest 15% of your household income in retirement.
- Save for your children’s college fund.
- Pay off your home early.
- Build wealth and give.
As you probably noticed, there are some steps on there you might not be ready for yet. And some you can skip completely — like debt! Like we said before, your goal right now is to make sure college is paid for. And since you’re still living under your parents’ roof, a $500 emergency fund will be enough for now. If you’ll spend the next few years focused on those goals, nothing will hold you back from building wealth like a millionaire!
Want to learn more? Dave’s new book, Baby Steps Millionaires, will show you how millions of Americans have become millionaires — and how you can become one too! Grab your copy today to learn how to bust through the barriers preventing you from becoming a millionaire.
This article provides general guidelines about investing topics. Your situation may be unique. If you have questions, connect with a SmartVestor Pro. Ramsey Solutions is a paid, non-client promoter of participating Pros.
Article 5: Secret Millionaires Club (TV series)
Sources and other references:
https://www.firstfinancial.org/youth-young-adults/millionaires-club/
https://m.imdb.com/title/tt2111011/
https://m.imdb.com/title/tt2111011/mediaindex/?ref_=tt_mv_close
https://www.millionairesclub.org/
https://www.ramseysolutions.com/retirement/how-teens-can-become-millionaires
