february 2016 newsletter 6 surprising money...
TRANSCRIPT
February 2016 Newsletter
Financial6 Surprising Money Habits of Millionaires
Millionaires aren't wealthy because they're lucky. They're wealthy because theyfollow simple money habits year after year. See how much you can accomplishby doing the sameLink to Article
FinancialMeasuring the Value of a Financial Advisor
Two studies found that working with a financial professional can result in higherreturns and potentially lower personal stress.Link to Article
Off TopicThe Elephants That Came to Dinner
Every spring, a herd of elephants climb the steps and stroll past the reception ofthis fivestar lodge in Zambia. The yearly crossing has become an unforgettableexperience for guests and staff alike.
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6 Surprising Money Habits of Millionaires
Most millionaires aren’t driving Lamborghinis and eating caviar. They’re driving reliable used cars and eating mashed potatoes and meatloaf.
Just like us.
In The Millionaire Next Door, authors Thomas Stanley and William Danko interview multimillionaires to find out the secrets to their success.
Turns out millionaires are just normal people who live frugally, invest wisely and budget frequently. After years of following this simple equation, they become wealthy.
And it’s a formula anyone can follow. Including you! Here are six money habits we can learn from millionaires:
1. They spend wisely. Status isn’t important to most millionaires. They’d rather be financially independent than buy expensive stuff. In fact, only one in four of them have ever spent more than $100 on a pair of shoes! Jimmy Choo, who?
Budget Lesson: Don’t buy stuff because you want to impress people. Buy stuff because you want it, you saved up for it, and you will actually use it.
2. They set goals. Two-thirds of millionaires set goals daily, weekly, monthly, annually and for their lifetime. Maybe that’s why they accomplish so much with their time!
Budget Lesson: Author and motivational speaker Zig Ziglar famously said, “If you aim at nothing, you will hit it every time.” Name goals for all areas of your life and work hard to make them happen.
3. They buy modest cars. Millionaires don’t lease. Most don’t even buy new cars! They purchase modest, reliable vehicles with cash and drive them for years.
Budget Lesson: Forget about car loans and leases. Save up, buy the car you can afford, and drive it as long as possible. Then buy another with cash. Works every time.
4. They budget and track their spending. Everyone needs a budget, even millionaires. They religiously plan and track their expenses each month. And they know where their money is going at all times.
Budget Lesson: Make an easy, online budget with EveryDollar before the month begins. Do this every month, and track your spending as you go. Make adjustments as needed, and always budget to zero.
5. They save and invest. Most millionaires invest around 20% of their income. And while they have accounts with investment firms, they never put their money on autopilot. They make their own decisions and stay in control of their portfolios.
Budget Lesson: Invest and stay involved. Make sure your money is doing what you say.
6. They’re happy. The authors concluded that, “Financially independent people are happier than those in their same income/age cohort who are not financially secure.” Why? Because they don’t have to worry about money, like their peers who are spending money as fast as they make it.
Budget Lesson: The greater your net worth (assets minus debt), the less you have to worry about money. You know you can fund your retirement, pay for your kid’s tuition, and buy your home outright. It’s a good feeling.
The Bottom Line
Millionaires aren’t wealthy because they’re lucky. They’re wealthy because they follow simple money habits year after year. See how much you can accomplish by doing the same.
Measuring the Value of a Financial AdvisorWhat’s the value of a financial advisor?
Two studies found that working with a financial professional can result in higher returand potentially lower personal stress.
Lower Stress
Seventy-six percent of people within 15 years of retirement are stressed when thinkiabout retirement savings and investments.¹
Working with a financial advisor to develop a written retirement income strategy,however, can increase your confidence and happiness, according to FranklinTempleton’s annual Retirement Income Strategies and Expectations Survey.
With and WithoutInvestors... Confident with plan Happy with planWith an advisor 91% 92%Without an advisor 44% 44%
Higher Returns
In addition to providing financial guidance, financial advisors may also add about threpercentage points in net portfolio returns over time, according to a study by Vanguar
Financial Advisor Advice Components⁴Advice Advice Elements Potential Added Return to
Investor PortfolioPortfolioConstruction
Asset allocationAsset location
Up to 1.2%
WealthManagement
RebalancingDrawdown strategies
Up to over 1%
BehavioralCoaching
Managing investoremotionsAiding decision-making
Up to 1.5%
It’s important to remember that financial advisors also may offer guidance that wasn
the financial consequences of loss of income, and coordinate with other financialprofessionals on tax and estate management.
1. Franklin Templeton, 2015
2. Franklin Templeton, 2015
3. Vanguard.com, 2015
4. Vanguard.com, 2015
The content is developed from sources believed to be providing accurate informationThe information in this material is not intended as tax or legal advice. It may not beused for the purpose of avoiding any federal tax penalties. Please consult legal or taxprofessionals for specific information regarding your individual situation. This materiawas developed and produced by FMG Suite to provide information on a topic that mabe of interest. FMG, LLC, is not affiliated with the named broker-dealer, state- or SECregistered investment advisory firm. The opinions expressed and material provided afor general information, and should not be considered a solicitation for the purchase sale of any security. Copyright 2015 FMG Suite.