Millionaires have more than bulging bank accounts in common. Picture: iStock
Millionaires have more than bulging bank accounts in common. Picture: iStock

The secret to becoming a millionaire

A man who spent years interviewing millionaires has discovered a common personality trait most of them share.

The man, identified only as "John", runs his own personal finance website, ESI Money.

For the past few year, John, who is a self-made millionaire himself, has been picking the brains of 100 other rich people to discover their secrets.

He found that most don't have a budget - not because they are fabulously wealthy, but because they have high levels of self-control which means they are completely unnecessary.

In other words, millionaires are often disciplined and sensible with their cash, and are not prone to splashy, spontaneous spending.

And they also tend to spend a surprisingly small proportion of their wealth because of that self-control.

"This was probably the biggest surprise for me. I would have guessed that 75 per cent-plus would have had budgets," John wrote.

"In reality 46 of the 63 asked do not have a budget.

"While it was not expected, the reasons millionaires don't need a budget makes sense - they make a lot and have self-control.

"In other words, they make a tonne, spend only a portion of it, and have plenty left over."

John stressed while it was far from a scientific survey, he believed the statistics were very telling.

Want to be a millionaire? Better start working on your self-control. Picture: iStock
Want to be a millionaire? Better start working on your self-control. Picture: iStock

And he said it mirrored his own personal experience, with he and his wife sticking to a budget in the earlier years when they had less wealth, and eventually ditching it after adopting frugal habits.

"A budget is great for the early phases of a financial plan, but if you can grow your income and develop self-discipline not to spend, it's not vital to your success later on," he wrote.

The blogger also found millionaires tended to be excellent savers as well, with the median millionaire spending $US90,000 ($AU124,000) per year while earning a $US250,000 ($AU345,000) income - a saving rate of 64 per cent.

He noted that millionaires usually start low but then grow their savings with time.

"If you want to grow your savings, start anywhere (even if it seems too small) and build over time. As it grows, so will your net worth," John wrote.

John, who claims to have retired at age 28 with a $US3 ($AU4.1) million bank balance, said the millionaires he has interviewed also tended to check their investment portfolios daily - a habit which was actually often a dangerous one for those of us with poor self-control, as it can lead to overtrading when the individual gets spooked by market trends.

"And yet millionaires get away with this habit. It's likely because the self-control that makes them such great savers also aids their investing," he wrote.

"So while they may watch their investments daily, they don't panic when things go wrong and make tough situations worse."

He said they also usually made only simple and low cost investments.


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