Yahoo Finance I’m a Self-Made Millionaire: 8 Things I Do To Make Sure My Wealth Never Runs Out
Whether you’re a millionaire or just saving your first few thousand dollars, you’ll want to implement ongoing strategies to protect and grow your wealth over a lifetime. After all, you don’t only want to earn that money, you want to make sure to keep it and expand it.
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GOBankingRates spoke to two self-made millionaires about their principles for safeguarding and perpetually expanding their fortunes. Here is their invaluable advice on maintaining wealth for the long run.
Never Spend the First Derivative of Income
Bryan Clayton built the lucrative landscaping platform, GreenPal. But Clayton emphasizes his key to lasting wealth is never touching the initial money earned.
“Never spend the first derivative of income,” Clayton advised. “Before I even think about fancy purchases or vacations, I channel the money into income-generating assets — real estate, stocks, businesses. Anything that puts money back in my pocket.”
Once assets are acquired, they fund and support Clayton’s lifestyle. But the priority is always reinvesting earnings first.
“Want a new car? Cool, but first, let’s buy a rental property that pays for that car. The rent covers the payments, making the ride essentially free,” Clayton explained. “Kid on the way? I’m investing in commercial space that’ll cover the expenses.”
This cycle of buying assets that in turn pay for daily costs and desires provides perpetual sustainability. As Clayton said, “Live by this rule, and you’ll not only preserve wealth but grow it exponentially.”
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Diversify Your Investment Portfolio
Self-made millionaires avoid concentrating money in just one or two assets. They diversify investments across stocks, bonds, real estate and other alternatives to protect against market volatility. If one asset sinks, others buoy until conditions improve — it’s long-term financial planning that sets them apart. Their goal is always to spread money around to provide stability.
Invest Conservatively as You Age
In youth, aggressive bets and risk-taking may pay off. But later in life it’s wise to shift portfolio allocation to more conservative fixed income assets that offer steady dividends and principal protection. As you age, capital preservation becomes increasingly important. Of course, when you’re younger, you can make riskier investments, but as you get closer to retirement, they key to maintaining wealth is to proceed with caution.
Consult Professionals Like Wealth Managers
In the same area, self-made millionaires rely on professional finance people to make sure they’re saving, spending and investing correctly. Professional wealth managers provide financial modeling to protect and optimize your finances. Their broad expertise spots pitfalls that are easy to overlook and keep your money on the right track.
Embrace Frugality in Your Lifestyle
Brenda Christensen built a thriving PR firm, but even thorough she’s pulling in plenty of cash, her lifestyle hasn’t changed much. Instead, Christensen is actually pretty frugal.
“I practice saving by cutting my own hair and limiting visits to premium spots like Starbucks and Disney World,” Christensen shared.
Avoiding expensive consumer temptations compounded her wealth dramatically over time.
Diligently Monitor Every Cent
Maintaining laser-focus on financial management has been paramount for Christensen.
“Diligently overseeing all financial aspects has been crucial. I’ve established a corporation and living trust to safeguard assets,” she emphasized.
Structuring finances to maximize longevity and minimize taxation remains vital even once you achieve millionaire status — in fact, taxes become more detrimental in higher brackets and must be managed with care. Wealth preservation takes meticulous planning.
Persist in Financial Diligence
“Despite significant profits from selling an Inc. 500 company, I’ve continued to work and maintain income flow,” Christensen said. “Consistent diligence remains key.”
Ongoing income sustains growth versus drawing down limited resources. Even millionaires must persistently nurture their fiscal health.
Continuously Reinvest Earnings
Similarly to continuing to build wealth, it’s important to resist cashing out entirely or spending all the profits. You can do this by reinvesting a significant portion back into a business of your own, other businesses, real estate — wherever you prefer to invest to spur further growth. By reinvesting earnings, safeguarding assets, minimizing spending and persisting in financial diligence, you can position yourself to turn personal wealth into generational wealth.
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This article originally appeared on GOBankingRates.com: I’m a Self-Made Millionaire: 8 Things I Do To Make Sure My Wealth Never Runs Out
