How to get Financial Freedom: Self-Made Millionaires Approach towards Saving Money
Certain habitual traits are very crucial for the achievement of financial freedom. Actually, most self-made millionaires are accustomed to these traits. And by continuously practicing these traits they have achieved their financial freedom. Saving money is one of the same traits that self-made millionaire practice and the one you should also learn to follow their lead.
But the good news is that you can learn how to save money and behave like a self-made millionaire. Learning these traits will prove to be essential ingredients for achieving financial freedom.
Learning and exercising these habits is the real secret to becoming a millionaire.
Habits of Self-Made Millionaires
Self-Made Millionaires Are Careful and Calculated
The most commonly observed habit of self-made millionaires is that they spend each penny with great care. They really get the value out of every dollar they spend. Saving money is their top priority through which they have achieved their financial freedom.
If they have an option to lease something they need, they never go for buying it. If there is an option for renting, they never go for lease. And they even don’t go for renting, if there is an option to borrow.
For example, most rich people don’t go for buying a new car. They wait for the car of their choice to get 2-3 years old. Once its value is sufficiently depreciated they search that car in the market and thoroughly inspect it mechanically. When they are satisfied with the condition of the car, they negotiate as much as they can and then buy. After buying, they use that car for enough time before they consider replacing it.
Self-Made Millionaires Know How to Save Money
Self-made millionaires develop the habit of saving money and identifying good opportunities for investments from an early age.
How can you do it?
No matter how much money you make, It’s entirely up to you that you save money or not. It all depends upon your lifestyle choices. By making only a slight downgrade to your lifestyle, you can start saving 20 percent of your total earned money. As you know that human beings are creatures of habit, so once you develop the habit of saving money, You’ll get comfortable living with only eighty percent of your remaining money.
To some people, the idea of saving 20% of their income may sound unmanageable because of their financial circumstances or very low average income, or any other reason. In that case, they may start by saving only 1% of their earned money. Because the important thing here is to develop the habit of saving money.
Useful Tip for Saving Money
Let’s say that you’re earning $2000 per month. In this case, you need to start saving $20 out of it and living on the other $1980 from today. By doing this you’ll not even have any noticeable difference in your lifestyle, but you’ll get on the right track to to achieve your financial freedom.
To make it a permanent habit you can even open a separate account, which will be your “financial freedom” account.
This must be only a one-directional account in which only your monthly savings are deposited but nothing comes out of it.
After some time you need to start increasing your saving percentage as per your suitability.
The Big Purpose of Saving Money:
The purpose of saving money is to get your financial freedom as soon as possible.
Once you develop this habit, you’ll need to gradually keep increasing your saving percentage until you go up to 15-20 %.
Within 1 Year, You’ll see that living on the other 85-80 % of your income doesn’t hurt you because of the two reasons:
- The change in your lifestyle will be so gradual that you won’t even notice
- You’ll be happy about the fact that, now you have a rainy day fund.
If you are to achieve financial freedom one day then only saving the money is not gonna do it for you. Robert Kiyoski in his book “Rich Dad, Poor Dad”, suggests that “Savers are Losers” and for the right reasons.
So, Once you have saved up enough money then, you need to constantly look for investment opportunities. The moment you get one you need to carefully evaluate it and jump into it. And keep on doing it until you reach your big purpose of “financial freedom”.