Have you ever wondered what is meant by "millionaire" or what it would be like to be a millionaire? Is it about having 1 million in the bank, in assets, in net worth, or in annual income? Recently, I discovered that joining the “Millionaire Club” refers to the member's total sales generated over time, For purposes of this post, I am defining millionaire in terms of net worth. It's when the value of assets exceeds the value of debt by 1 million. With all the get-rich literature, we begin to believe that achieving millionaire status will solve all our financial problems. That isn't necessarily the case however.
Net worth, even if it is 1 million, won't necessarily pay the bills.
What we need to buy food, pay the mortgage and put gas in the car is regular cash flowing in or limitless liquid assets. What I noticed, as I'm sure you have also, is that we tend to spend more... when we make more. We buy more expensive "things", we want a bigger house, a nicer car, a better vacation...
That makes financial wellness about ensuring the continuous flow of money coming into your pocket, AND about controlling the money that's going out the door.
For example, Micheline, who is featured in the Companion Digital Book, is a great example of a person who found financial wellness in spite of a low income. It could be argued that she is better off than a millionaire who has no control over their spending.
I think we need to make a conscious effort to manage our money well. This will mean something different to different people:
All of the above are good practices to develop. One thing is certain: It's that when we spend more than we make, it is unlikely that we will achieve financial wellness or become a millionaire.
Spending more than we earn is usually not a winning formula!
From the interviews I did I saw that people had different strategies that worked for them, and that were also different from what I did. This is what I find fascinating about investing, there is something for everyone. The Companion Digital Book is a great resource to find out about the various strategies that can help you achieve your financial goals.
My answer to the question posed in this post is that becoming a millionaire without the ingrained behaviors of financial wellness isn't likely to produce sustained financial benefits.
I can say from my personal experience that achieving millionaire status doesn't guarantee continued growth in the millionaire direction. I would say that financial wellness habits are necessary unless a person has unlimited (as in: forever) liquid assets.
If you feel that your financial practices could be improved, start today!
About this blog
This is a blog about investing for beginners. You can count on quality information
Yvanne wrote a 2-part book series about investing for beginners. She is an investor with an entrepreneurial character and a creative spirit. In the context of her career, she was trained as an analyst, and later as a manager.