Not all millionaires have a Hollywood tale of how they grew to be rich.
In fact, many millionaires out there are just like you, living modest lives in average homes, and looking for ways to optimise savings.
Farnoosh Torabi spoke with several of these “millionaires next door” on her personal finance podcast, “So Money,” and asked them how they got to where they are today: with a net worth of $US1 million or more before age 50.
Here’s what the millionaires had to say:
'Yes, I do like to read and listen up on financial news, but I don't let those outside influences distract me,' Johnson explains.
'When the stock market drops 200 points, I don't freak out and sell everything ... Don't let others -- whether that's your friends, neighbours, or even your family -- influence your spending behaviours ... Focus on how you want to behave, and don't be influenced by an outside force.'
'Be thoughtful about each purchase,' millionaire Luann Abrams says. 'Is it really something that is going to bring you happiness, or can you let that go? Be mindful of where you put your money.'
'Watching out for recurring expenses is critical,' Kirkpatrick says. 'Any time you commit to a monthly expense — whether it's a mortgage, rent, car payment, gym membership, or magazine subscription — you need about 300 times that amount in an account, or an investment to pay for that expense over retirement.
'It's better to think of those recurring expenses as a really big number that you've got to save for, instead of some monthly bill. If you take on too many of those, you're basically locking in a lifestyle that you've got to support. It's not that they're all bad — you just want to be very conscious about taking on any regular expense.
'Yes we can be thoughtful, yes we can be frugal, yes we can track our spending; but at the same time, we have to live, and we have to enjoy things,' Johnson tells Torabi. 'We don't have to go out to eat every night, but we do have to go on vacations, take our son to the zoo, and do and experience new things ... It's great to save, but you also have to spend -- you have to enjoy your life, too.
'Always try to focus on the journey -- the day-to-day journey of life -- rather than getting to a dollar figure or focusing on the next million.'