Archive for July, 2010

Millionaires – Myths and Misconceptions

For the last two post, we have been talking and sharing lot about Millionaires and their mindset. Particularly in the previous post, I have listed few questions which was asked by friends and even asked myself many times. So I wanted to dwelve into those questions and crack some myths and misconceptions about Millionaires from research/study.

Let’s start with something simple.

#1. I have to become a millionaire/rich person to live happily.

That is not true but many think that way. If you ask me, that’s a misconception by many people. It became ingrained in many people minds after looking at rich people,  that they can live happily once they become a millionaire/billionaire or rich person. 

One person’s success in life shouldn’t be all about money and how much he/she makes. It is just a part of the puzzle. It is mostly about how you live with what you make and how you help others to get what they want.Studies have for years shown that cash has only a small effect on our well being.  One can still  lead a miserable even after getting a windfall of money and there are many examples to prove that case.

#2. Millionaires are lavish spenders.

That’s totally wrong. If you take Mr.Warren Buffet, he is one among the richest people in the world but he still lives in his old house. He drives his own car which is pretty old too. There are many other rich who lead a conservative and frugal life. Many new millionaires are true frugalers and made to the list by saving and conscious spending. Not everyone makes to millionaire list by winning a lottery. You should check out the book, frugal millionaires( and you will understand how millionaires think differently than normal person.

#3. I will be financially free when I  become a Millionaire.

Don’t count on it not in this current economic situation and expected high inflated one in the future. These days, simply being a (one) millionaire is not enough to be financially free, depending on ones age. Financial freedom is totally independent of being rich person. Not all rich people call themselves financially free. Here is an interesting reportfrom study conducted by Universty of Belgium, UK and  Canada about Wealth and well being. Actually money makes you financially dependent. When you have more money, you become more dependent on it for everything and anything.

Only men are up against Million dollar goal.

According to a report, nearly half of all millionaires are all women. There is no big difference among Men or women when it comes to making millions. Here is the listof women billionaires all over the world.

#5. You need to have Millionaire Mindset to be a Millionaire.

Not entirely true but it helps to reach the goal quicker. You can ask, What is millionaire mindset? It is explained in detail in the best selling book wrote by famous network marketer Bob Protector. He shows how an ordinary person can create his/her own economy by using their mind and thought process. You can read more at free ebook copy.  I also found this ezinearticleto be more precise and short. To be short, it is about fine tuning your act and mind to decide your own the destiny and move towards as the only goal. I don’t truely follow up them since I believe in my simple 3P strategy, Plan, Persist and Perseverance.  

#6. I really need a Millionaire goal to be successful.

Not actually. It depends on each individual. Every individual is different in their own approach but many analyst recommend having a higher goal can lead to higher success rate. As I said earlier, success in life is different for each individual and it doesn’t have to measured in dollars.  Sometimes it is fun to track numbers and dollars to see the progress. But most of the time, it is about pride to say that you are one among list of High networth individual in this world.

Also tracking Many experts from their real life example, “What gets tracked, gets improved?” If you don’t track your progress, you won’t know where you were and where are you now. Tracking the progress is an important part for financial advancement.

#7. Everyone can’t become a Millionaire.

Why not? If school drop outs like Bill gates, David Mudrock(Dole foods CEO) can do it, you can too.  You don’t need an MBA or doctor to be a Millionaire. Here is the list of all drop out millionaires,  and here is one from forbes 2010 list of top ten drop outs.

If this makes you feel better and get you working on your Million dollar goal, go for it.

I have unrevealed some myths about millionaires, now you might ask how can easily become a millionaire?

It is actually a million dollar question and nobody has silver bullet answer for this question. If I had known the exact answer, I would have been a millionaire by now. Obviously, you cannot be a millionaire overnight unless two things happens, winning lottery or waking up with million dollar idea. There are “n” number of ways to become a high networth individual(over 1million).

A very conservative approach many banks suggest is to save a particular dollar amount from your early age like 21 every month and you can be a millionaire when you are 60 years old. It is also not set in stone because it depends on factors like saving rate and economical condition. But there are other ways like starting a new business, inventing some new product, work on multiple investment strategies etc., 

Just hook on to a strategy which works for you according to your comfort level and keep at it. Don’t give up, just keep trying…

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Personal finances on the slide despite national upturn?

According to a recent survey by the Washington-based Certified Financial Planner Board of Standards Inc. (CFP), Americans anticipate the national economy could be more likely to improve than decline during the next six months. However, as Bloomberg reports, the CFP study also shows the majority of Americans do not have as much faith that their personal finances will improve.

Personal finances fall as recession fades

Forty-four percent of CFP poll respondents see the U.S. waking up before their own personal finances, when 28 percent are pessimistic on all fronts. “Americans are generally hopeful, and much of the economic news leads us to conclude that we are out of the recession, and a double dip is unlikely,” said CPF chair Robert Glovsky to Bloomberg.

But this optimism doesn’t stick to the personal finance problem, it seems. Consumer confidence may be up while the declared unemployment rate was down .2 percentage points from May 2010 to June 2010 (it was 9.5 percent in June), but the CFP survey indicates that nearly two-thirds of Americans (65 percent) indicate that their worries over basic matters of long-term personal finance have grown significantly since the beginning of the recession. Individuals know they’re in need of cash now, but often find themselves on the outside looking in when it comes to a bank loan. Relying upon a poor credit personal cash loan is an choice, but not one that has inspired consumers to view their financial futures within the most good manner.

A three-fold path to bad-time personal finances

The CFP survey, which was conducted via telephone by market research firm Penn Schoen Berland, found the vast majority of the 1,000-member sample group of consumers ages 18 and older were afraid they wouldn’t be able to maintain sufficient savings, pay for college or have enough money put away for retirement. Not only that, but 80 percent of the group agreed that Congress wasn’t doing enough to regulate financial markets. However, various media sources indicate a reform bill may pass through Congress soon.

More information about this topic at these websites

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