Published by Taylor Financial Group
People have this misconception about what it means to be “rich.” They think that being rich consists of living in a huge house, driving fancy cars, taking exotic vacations, and indulging in other luxuries. But, that’s actually not what defines wealth at all. In fact, the wealthy who spend a lot of their money on these big-ticket items are probably neglecting their savings and investments. By contrast, those who live more simply may seem like they have less money, but they’re actually just being wiser about their savings and their future. These are the people often referred to as “the millionaire next door.”
I’ve seen and lived both of these extremes. And I can tell you that I was no happier in the big house than I was in the small house. If you’re living mostly debt free, are practical and self-aware, are a hard worker, and your money is invested with some market appreciation, then you’re probably one of these “millionaires next door.” In fact, you may be richer than you think if you have the following characteristics.
You’ve Worked Hard for Your Money
Maybe you’ve never been the CEO of a company, but you’ve always had job stability and a successful career. You didn’t become rich overnight. Instead, you’ve built your wealth over time with persistence and perseverance. Though it may have taken decades for you to get where you are, you made it! But you continue to live mostly as you always have. You’ve got the money, but you don’t spend it unnecessarily. And that is why it’s hard to tell that you’re “rich.”
You’re Frugal and Resourceful
Not only did you work hard for your money over the years, you have also always been smart about how you spend your money. Even more important, you have been wise about saving and investing your money, rather than spending it. You are probably thoughtful about your large purchases, like cars and homes, and you make smart long-term decisions about these types of items.
You are likely also very resourceful. For instance, you may mow your own lawn and clean your own house over hiring someone to do these things. Likewise, if you have small home repairs or want to repaint a room, you will probably do it yourself before calling a contractor. That being said, you’re also smart about knowing when a pro is needed, so that you’re not spending your time and money on fixing a failed DIY project. For instance, my husband Rob mows the lawn, but we will call a plumber when we need one.
Money is Not the Most Important Thing
While you’ve always been prudent about your spending and savings, money is not the main focus of your life. In fact, what’s more important is your family and your future, and all money conversations and plans typically revolve around family matters. Saving enough money for retirement isn’t as much about being able to buy the house on Martha’s Vineyard, but more about being able to spend more time with your grandchildren and taking family vacations.
Investments Are Not Your Obsession
Though you have investments and are likely working with a financial advisor, you are not obsessed with how your investments are performing. You are very capable of maintaining a long-term perspective and you trust that your advisor is committed to helping you achieve your long-term goals. You are diligent about having your periodic portfolio review meetings with your advisor, but beyond that, you’re not constantly watching the markets or expecting big short-term results.
So, are you a “millionaire next door?” Whether you believe you fit these characteristics or not, everyone has different priorities and perspectives when it comes to their wealth, and that’s okay. But, we do think that one of the main keys to being a smart spender, saver and investor is to maintain a long-term perspective. It’s also essential to have a financial advisor you trust!
If you have questions about your portfolio or your retirement savings, give us a call today. We can help you gain financial confidence and live a fulfilling life. After all, everyone deserves a plan!
Business Insider, 6 Signs You’re Richer Than You Think, April 9, 2018
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