If you’re a new graduate taking your first steps into the adult world, here is the most important financial advice I can offer: Develop a millionaire mindset.
This absolutely does not mean making wealth your life goal. But thinking like a millionaire will help you build a solid financial foundation to support you in reaching your life goals.
First of all, let me define “millionaire.” A millionaire is someone with a net worth of $1 million. That amount generates an income of around $30,000 a year. In today’s world, that’s not even close to lavish-lifestyle wealth.
You probably know several millionaires. If you don’t think of them as rich, it’s most likely because they practice the millionaire mindset. Here’s how you can develop it, too.
1. Spend like a millionaire
The No. 1 common denominator of wealth accumulators is frugality. Millionaires shop sales, clip coupons, read labels, compare prices and bargain.
People who build wealth usually don’t wear designer clothes, drive luxury cars, live in extravagant houses or shop at Neiman Marcus. They typically wear jeans bought on sale, drive used Toyotas, live in middle class neighborhoods and shop at Walmart.
There’s no place in a millionaire mindset for credit card debt. Pay cash for everything but your home. Use a credit card only for convenience and pay it off every month. If you ever find yourself unable to pay the full amount, cut up your card. Pay off the balance as quickly as you can, and then don’t use a credit card for at least one year.