7 Simple Ways to Make Your First Million

IMG_3684 (Because once you make your first million you’re bound to rejoice under a waterfall with a rainbow, right?)

If a million dollars’ worth of investments sounds unattainable, you haven’t done your research. A seven-figure portfolio is absolutely doable if you start saving early, make sane lifestyle choices and avoid some common psychological traps.

Don’t limit your thinking to making a mere million over your lifetime. Aim for $10 million. Your only way to get there is to educate yourself about investing from reliable, been-there sources. After that, make a plan and stick to it.

Start with a millionaire mindset.

Building wealth begins in the brain. There are some beliefs and behaviors that you simply must avoid – taking on consumer debt, keeping up with the Joneses, trying to take shortcuts or falling for get-rich-quick schemes. True wealth takes time and hard work.

Adopt a spendthrift lifestyle.

When millionaires are studied, they surprise researchers. They’re not living in upscale neighborhoods and driving fancy cars. They treat their income like a business: spending the least possible and investing the rest. It’s not unheard of for future millionaires to invest half of their household income.

Make money from your hobby.

If there’s something you could do all day, every day, do it. The trick is finding a way to make your passion into a profitable enterprise. You can expect to fail along the way, but getting back up to try again is what separates millionaires from middle managers. Don’t be afraid to spend hours and weekends on your “side business” – it might be your bread and butter someday.

Start saving right now.

It’s all about doing the math. Most millionaires invested in the stock market for a long time, reinvesting dividends and letting compound interest do all the work.

Find an online calculator and figure out how much you’ll need to invest each month to be a millionaire by the time you’re 60, assuming you’re earning an average 7 percent return. You might be surprised.

Keep cool and play the long game.

Impatience is the enemy of wealth. It makes people buy and sell too often, and it makes them abandon promising businesses that don’t explode into success overnight.

It takes a while for investments to start ballooning into real money, and even then, you’re going to want to leave them alone. If it were easy to run your own business, everyone would do it. So take a deep breath and realize you’ve got a long way to go.

Always be hustling for more income.

If you’re not a natural entrepreneur, consider investing in real estate. A rental property that will bring in more money than you pay to maintain it is a great investment. Do some research to figure out the up-and-coming neighborhoods in your area. The quicker you own your rental property outright, the quicker you’ll be looking at steeper profits.

Your 401(k) is your tax-free friend.

You might as well take advantage of the federal government’s wealth-building program: the 401(k) account. First, put in the maximum amount allowed by law ($18,000 a year as of 2016). Leave it in there, earning compound interest, and if your mutual funds return a 7 percent profit while you’re socking away that $18,000 a year, you’ll be a millionaire in 23 years. If you can’t afford to put away $18K a year, put away as much as possible.

Pet insurance. Is it worth it?

Is pet insurance really worth it?

Veterinary care is a lot like health care for humans: Technology, medicine and lifesaving techniques are always being developed. Your pet’s doctor can offer more advanced treatment, but it comes at a cost. Faced with thousands of dollars in treatment after an accident or dire diagnosis, many pet owners are conflicted. Many people draw the line at spending $500 on vet care, forcing themselves into a difficult decision. Even fewer pet owners are willing to spend more than $1,000.

It’s not like people insurance.

Pet insurance has a higher profile lately, with an increasing number of carriers competing for owners’ dollars each year. Premiums can range from around $10 to $90 a month, with widely varying levels of coverage. If you have pet insurance, you’ll usually have to pay your vet up front, then file a claim for reimbursement. Most vet offices will help you fill out the paperwork involved.

So is it worth it?                    

Pet insurance can come in handy in urgent situations. Just like for people, emergency veterinary care is exponentially expensive. If your dog fractures its leg and needs orthopedic surgery, the bill could top $3,000. But that’s a rare situation, and pet insurance doesn’t end up saving most owners money in the long-term. The exceptions are pets that develop a rare disease that will require long-term treatment and pets with catastrophic injuries.

What if I decide to buy coverage?

Ask your veterinarian to recommend a few carriers. Vets don’t get kickbacks on this kind of advice. Compare a few different policies from different companies and read the fine print on maximum payouts and other exclusions. Including “wellness care” on top of accident and illness coverage for your pet will probably not be worth the higher premium you will pay, so consider leaving it out. Insure your pet when it’s healthy, and don’t cancel when it gets older unless you’re willing to deal with the consequences.

Check the coverage limitations.

Some plans cover wellness visits as well as emergencies; others don’t. Common but expensive ailments such as hip dysplasia are usually excluded under most plans. Some carriers completely exclude certain breeds, such as the Chinese Shar-Pei. Some breeds, like Labrador retrievers, will be covered for only one round of surgical object removal after eating, say, your shoe. Big breeds aren’t always covered for ligament repair after a common leg injury, and so forth.

Insurance isn’t your only option. Consider depositing a few hundred dollars a year into a savings account for unexpected vet bills. If your pet leads a relatively healthy life until old age, you’ll have money to spend if problems arise.

You can also save money in the long run by reducing your pet’s medical risk factors. Spaying or neutering, keeping current on vaccinations and dental cleaning, using heartworm prevention, and protecting your pet from fleas and ticks will put the odds in your favor. Feeding your dog a vet-recommended diet will also help. Even if you decide against insuring your pet, staying mindful about its everyday health can provide peace of mind.

Guest Blog by Gina Overmann

Guest blog post by Gina Overmann, 2016 Spending Freeze winner.

I was honored to be chosen as the Missouri Credit Union 2016 Freeze winner! Our family is very excited! During the 10-day Freeze, we learned more about teamwork and how to make saving money fun. We had some challenges along the way. Our dishwasher broke, and we realized quickly how spoiled we had been. I grew up without a dishwasher and remember helping my parents wash and dry dishes when I was a kid. We used this as a learning opportunity, rolled up our sleeves, and got to hand-washing. In fact, we got so used to hand-washing our dishes after every meal, we still haven’t bought a dishwasher! This not only helps save money by not running out to buy a new kitchen appliance, but also allows us to spend more time together as a family. We all help clean up and do dishes instead of sitting in front of the television after mealtime. Now, it’s a habit to spend this time together after meals, and our television gets a much-needed rest!

When asked how we will spend the money, I am excited to say we are planning a wedding for this summer, so we will be using our winnings toward that. We found someone to make a beautiful rustic wedding cake for $300, so this money just about covers that cost!

We wanted to share some tips for future Freezers. What helped us the most was keeping focused on the goal to not spend money. Planning ahead, making a meal schedule and grocery shopping ahead of time helps avoid panic toward the end of the freeze. Ten days can feel like a long time if you don’t have a plan of attack. On the flip side, 10 days is long enough to form good habits, so take advantage of this time to change the way you look at money. We are big fans of Dave Ramsey, and love to save, but you don’t have to attend Financial Peace University to win big with money, although we do recommend it!

Thanks, Missouri Credit Union, for hosting this Freeze! We participated last year as well, and really enjoyed the challenge each year.

IMG_5146

 

Spending Freeze: Day 10

The long-awaited day 10 has arrived! Less than 24 hours left until you conquer the Freeze. Congratulations to all of you – truly awesome learnings, communication and effort. We’ll be posting the list of eligible participants for the drawing on Monday, and will inform the winner by Monday night.

Have a wonderful weekend and enjoy the Super Bowl (or not)! You deserve it.

Day 10 prompt: Would you do the Freeze again? What did you like/dislike about the process? What could make the Freeze better in the future?

 

 

Spending Freeze: Day 8

We all have those items that aren’t technically “necessary,” but are items we feel are essential to our daily lives, how we see ourselves, or our own mental sanity. For example, manicures, eye brow waxes, contacts, hair color treatments, etc. They aren’t necessary, but they feel necessary.

Day 8 prompt: What are your unnecessary but “essential” items? Which ones do you think you could cut, or cut back on?

Spending Freeze: Day 6

Happy Monday Freezers! We hope you’re plenty refreshed after the wonderful weather we had in the Midwest this weekend. Sounds like there have been a few trials within the last five days – ravenous teens, broken dishwashers, QT temptations and more. Keep up the good work!

Day 6 prompt: What habits are you hoping to continue after the Freeze ends?

 

Spending Freeze: Day 4

The average cable bill is up 39% since 2010, sitting at $99.10. That’s nearly $1,200 a year. What could you do with an extra $1,200? Here are few ideas:

  • Buy a ticket to Europe
  • Invest in a portfolio
  • Purchase more than 200 orders of 10 pc. Chicken McNuggets from McDonald’s
  • Open a 401(k)
  • Start an emergency savings fund
  • Take an educational course
  • Go on a cruise
  • Pay down debt

You’d also have a lot more time on your hands to do things like discover a new species of squirrel.

Day 4 prompt: What have you learned about your spending habits so far?

Day 14: Hit the Movies Early

MCU_Pinterest_30DaysOfHank_19

Aside from the fact that matinee sounds hilariously similar to manatee (sea cow, duh), a matinee is also a super cheap way to entertain your date. Show off that savvy, frugal side. Sure the movie was only four bucks, but all the more $$ to splurge on popcorn right? Wrong. Fill up beforehand. Those movie theater snacks are wildly overpriced. Your date will not think you’re cheap, if they’re cool, they’ll be feverishly impressed.

Oh, you’re way passed dating and have actually produced some munchkins who may or may not be terrorizing your home? Take ‘em to a matinee. Perfect way to get an hour or so of peace.

For more tips on ways to save at the movies, click here.

Day 8: Be Thermostat Conscious

MCU_Pinterest_30DaysOfHank_12

When the temperature drops outside you should have a little talk with your roomie, boo thing or parents. Try to avoid WWIII while you explain to them that you can’t afford to heat the place at 80 degrees all winter. They’ll just have to tough it out or buy some socks that don’t have holes in them.

Next, prepare for a shockingly crafty and time-consuming battle for thermostat control. It’ll be worth it when the bills come.