And Your Home Doesn’t Make You One Either
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The Definition of a Millionaire
Someone with a liquid net worth of 1 million dollars minus their liabilities.
98% of the global population are not millionaires, and here’s why:
1. Lottery / Quick Fix Mentality
Delayed gratification requires discipline, restraint, and sacrifice.
Those who want it now often jeopardize their financial futures because they don’t know how to sit still, strategize, and hold off on the purchase.
Short-term (RIGHT NOW) gratification is intoxicating in comparison to long-term gratification; the timeline for long-term goals feel indefinite.
Quick wins often lead to quick losses because there is no clear strategy or discipline in place.
Earning money is easy.
What is harder is keeping it and growing it.
2. Lack of Financial Education
If you don’t know better, you can’t do better. One of the easiest ways to improve your financial situation is to improve your financial education.
When you know better, you do better.
Ignorance tax is costly.
3. Delaying Investing
It can feel overwhelming to get started with investing, especially when you’re unfamiliar with the concept, don’t know where your money is going, and simply don’t understand the game.
Procrastination kills people’s chances of becoming a millionaire over and over again.
The longer you delay, the more likely you won’t become a millionaire.
For those who come into a lot of money, if they don’t invest, they will lose their money.
4. Fear of Investing
There are a lot of scams in the finance world.
People have been hurt, let down, lied to, stolen from, and cheated.
No wonder people don’t want to invest. It seems like a guaranteed loss.
But all roads to wealth start with some kind of investment (e.g., time, money, effort, sacrifice, etc.).
You must invest to reap a return.
5. Lifestyle Creep
The more you earn, the more likely you are to spend.
Even if your income isn’t going up, inflation and spending opportunities are always increasing.
If you’re not careful, you’ll be overspending your paycheck every month if you don’t cut the leaks and put plugs in them ASAP.
Lifestyle creep is one of the easiest things to control, but also one of the easiest things to lose your grip on.
Control it or it will eat your finances alive.
6. Systemic Inequality
Systemic inequality is unavoidable.
Some people have everything stacked against them and will have to fight tooth and nail to escape poverty.
It’s not impossible to escape, but it does require diligence, grit, and persistence.
The system is set up for businesses, creators, and entrepreneurs to flourish. Proof is in the tax system. The system does not reward employees; it rewards employers.
If you want to flourish, find ways to create and add value to the world.
7. Cost of Living & Inflation
Inflation will always be on the rise.
What does this mean for you?
Consistently work to increase your income.
AND ensure your income outpaces the inflation rate, so you’re not just staying afloat, but moving ahead.
Cost of living doesn’t have to be a factor if you choose places that aren’t as pricey. It doesn’t have to be permanent decision either. It can be somewhere you stay temporarily to stack your cash.
8. Consumer & Education Debt
Credit card debt, consumer debt, and education debt are incredibly heavy hitters to consumers’ financial profiles.
Education Tip: Aim to pay for your education with grants, scholarships, employer support, and by working your way through it. It will save you thousands over your lifetime.
Credit Card Debt: Never spend more than you can pay back at any given time. If you hold a balance, be able to pay it off at any given time.
Consumer Debt: If you don’t need it, don’t buy it. And if you do buy it, always ensure you can cover the cost in cash, so if needed you could wipe away the debt at any point.
Manage all of these debts effectively to stay in control of your net worth.
The Homeowners Dilemma
Many homeowners feel they are millionaires because their home is worth a million or more.
But a homeowner is only a millionaire if, post-sale and taxes, their liquidated home sold for a sum that exceeds their total liabilities while also landing them in the seven-figure zone.
It’s not surprising that for some homeowners who have a home worth seven figures, many do not come out with a seven-figure net worth due to the amount of liabilities they have.
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Explore with Destiny S. Harris
This article is for informational purposes only. It should not be considered Financial or Legal Advice. Not all information will be accurate. Consult a financial professional before making any significant financial decisions.