Yahoo Finance 4 Money Moves Self-Made Millionaires Wish They’d Made Sooner
Self-made millionaires might seem like they’ve reached the pinnacle of financial success, but the journey to get there was likely not smooth sailing.
If you’re looking to make six figures, it can help to learn from those who have forged the path before you. Here are four money moves self-made millionaires wish they’d made sooner, and the advice they have for people who want to gain financial freedom.
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Money Moves Self-Made Millionaires Regret Not Making
From their goals to the way they handle their business partnerships and money, here are the financial moves these self-made millionaires wish they’d acted on more quickly.
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Created Clear and Specific Financial Goals
“I wish I would have gotten very clear and specific about what my financial goals were very early on,” said Jon Payne, CMO for Viking Mergers & Acquisitions, who started and then sold two different businesses for low seven figures each. “While ‘being a millionaire’ sounds nice, the truth is that for many people, $1 million may not be enough to meet their goals.”
Embraced Calculated Risk Early On
“While caution is prudent, hesitation can impede progress,” said Abid Salahi, a self-made millionaire who is the co-founder of FinlyWealth, a credit card recommendation platform that empowers users with personalized financial solutions.
“Early in my journey, I missed out on potentially lucrative investments due to excessive conservatism,” he said. “Learning from this, I now balance risk aversion and seizing promising opportunities. Additionally, I wish I had diversified my investments across a broader spectrum of assets earlier on. A more diversified portfolio mitigated risk and potentially accelerated my wealth accumulation.”
Parted Ways With a Business Partner
“I wish I had bought my business partner out much sooner — even if it cost me more,” said author of “The Everyday Entrepreneur” Rob Basso, who has founded businesses and sold them to large public companies, making millions in the process.
Basso explained that partners can be important, and, at many times, they are needed. However, he said, there is no good time to have a bad partner.
Saved and Invested as Much as Possible
Self made-millionaire Noah Lydiard, who is the founder and CEO of Conductor, which provides world-class creative and production services, has regrets about not saving and investing as much as he could have early on.
He explained that if it was possible for him to travel backwards in time, he would advise his past self that the money he spent on unnecessary things — like drinks and small costs — should be kept.
“Thinking back, if the money from all those evenings at bars during my 20s had been put into investments instead, I am convinced that becoming a millionaire could have happened much sooner,” he said.
Expert Advice If You Want To Become a Millionaire
Here’s some advice from the self-made millionaires if you’re looking to gain financial freedom.
Work Backwards
Payne said that if financial freedom is your goal, he thinks a good strategy is to work backwards to determine the specific dollar amount you want to have in order to achieve your goals, while also considering your investment preferences.
“For example, let’s say your goal is to have $120,000 per year in passive income,” he said. “At today’s 5% savings interest rates, you’d need $2.4 million in the bank. If you put the money into residential real estate, you might be able to get 8%-10% returns and thus would need between $1.2 and $1.5 million.”
Payne further explained that if you can tolerate more risk and are OK with semi-passive income, you can invest in a small business. He said if there’s a manager or operator in place, it can yield significantly higher returns — 25%-30% per year or more — which means you’d only need around $450,000 to reach $120,000 a year in income.
“While those lump sum numbers might sound daunting, they do give you a clear target to aim for,” Payne said. “And it’s not an all-or-nothing scenario, either, you can build up to it over time.”
Cultivate a Millionaire Mindset
Salahi said that, for aspiring millionaires, cultivating a millionaire mindset is of uppermost importance.
“This involves embracing delayed gratification and prioritizing long-term goals over short-term indulgences,” he said. “Developing financial literacy is equally crucial. Understanding compound interest, risk management and asset allocation can empower individuals to make informed financial decisions. Finally, taking consistent action is non-negotiable. Building wealth is a marathon, not a sprint. Small, disciplined steps can yield significant results over time.”
Begin Consistently Investing ASAP
“Starting to invest soon and doing it regularly is very important,” Lydiard said. “If you use compound interest, the sooner you begin, the greater your advantages will be. Making little sacrifices now can result in big benefits over time. I understood this teaching further on my path, but nowadays, I strongly recommend it to all who strive for financial freedom.”
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This article originally appeared on GOBankingRates.com: 4 Money Moves Self-Made Millionaires Wish They’d Made Sooner
