20 Millionaire Secrets of Your Rich Neighbours

Last year, the Credit Suisse Research Institute said there were 1,117,000 people in Canada who were worth more than a million US dollars, with over half a million more to come by 2021. That means that there’s a good chance you might have a rich neighbour or two. Time Magazine shares their secrets.

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1. They Spend Less Than They Earn

The truly wealthy know that it is better to be rich but not look it than to look rich but actually be poor.

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2. They Are Patient

Unless you win the lottery, wealth seldom comes overnight. Becoming rich takes years of working hard, saving and investing wisely.

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3. They Choose Economy

One way of saving money is to choose the less expensive option. Many rich people have frugal habits, like wearing regular old chain store clothes rather than designer labels. Billionaire Warren Buffett famously still lives in the five-bedroom house in Omaha, Nebraska that he bought in 1958.

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4. They Pay Their Credit-Card Bills

Rich people know that racking up credit-card debt is a sure way to lose you money. They pay their bills in full every month and if they can’t afford to pay for something in cash, they don’t buy it.

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5. They Focus on Financial Freedom

The wealthy have learned, sometimes the hard way, that money alone can’t buy happiness. However, financial freedom can really raise your happiness levels.

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6. They Know What Financial Freedom Means

Financial freedom isn’t dependent on how much money you make. It’s about being debt free, having enough to do what you really want to do and having control over your finances.

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7. They Understand the Virtue of Having a Second Job

Having a second job or at least a second source of income helps you become rich in less time. Moreover, it helps prevent you from overspending out of boredom.

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8. They Manage Their Money

Managing your money wisely will help you make your wealth grow. Rich people aren’t reluctant to get expert advice when it comes to finding the best ways to manage their finances.

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9. They Pay Themselves First

To pay yourself first doesn’t mean that you go out and buy everything you want before you pay the bills. It means that when you get your paycheque, you first set aside a portion of it for savings before you pay anything else. This will help you develop good financial habits and you’ll have something to help you through a rainy day.

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10. They Enjoy What They Do

Of course, you could slog your life away at a job you hate but why would you? Most rich people make their money doing something they enjoy.

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11. They Know the Importance of Planning

Without a plan, you set yourself up for failure. Simply wanting to be financially free is not enough; you need to have a definite plan that will help you gain control of your finances.

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12. They Don’t Rely on Luck

For a handful of people, luck has played a role in their road to wealth. For most, however, wealth came with sheer hard work and careful planning.

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13. They Think Big

To be financially successful, you need to think big. Your goals need to be significantly bigger than what you can deliver on right now. This will motivate you.

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14. They Know That Hard Work Can Make Up for Mistakes

Many rich people have made financial mistakes, sometimes with disastrous consequences. However, through hard work they managed to rebuild their wealth and make up for those financial mistakes.

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15. They Have a Contingency Plan

Life has a habit of throwing curveballs and these can wreck your finances if you don’t have a back-up plan. Rich people realize the value of good insurance to protect them against events that can threaten their financial future.

Related: 10 of the biggest myths about rich people.

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16. They Start Early

The sooner you start saving and planning for the future, the more your wealth will have grown by the time you reach retirement age. In addition, it’s easier to learn new, good financial habits when you’re young.

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17. They Know That if You Can’t See it, You Can’t Spend it

Having cash in hand is convenient but it also becomes infinitely more tempting to spend your money on things you don’t really need. A good way to remove the temptation is to have savings and retirement-fund contributions deducted automatically from your paycheque and to adjust these deductions as you make more money.

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18. They Don’t Really Need to Work

Most rich people don’t really need to work, although many of them do because they love their job. They’ve paid their debts years ago and what they make now is simply topping up the coffers.

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19. They’re Not Impressed by Flashiness

Although they can afford ostentatious shows of wealth, the world’s richest people often live surprisingly low-key lifestyles. They live according to what they need and none of them have ever needed a house with golden toilets.

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20. They Know When to Cut Their Losses

Rich neighbours know that sometimes it’s better to just cut their losses than to sweat the small stuff.

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