Through the years, I have interviewed hundreds of millionaires with the goal of learning from their experiences and knowledge.
I’ve published these as Millionaire Interviews, featuring my specific questions and their responses.
After a few hundred interviews, I realized that there was phenomenal wisdom in several of the questions I asked, especially when the responses from different interviewees are read one after another.
I’ve decided to publish these here on ESI Money in my Millionaire Wisdom series.
Note, not every millionaire answered every question and I did change around questions from time to time, that’s why every millionaire isn’t listed below.
Today we continue the series (see part 1 here to start the series) with millionaires addressing the following question:
What advice do you have for ESI Money readers on how to become wealthy?
Here are their responses…
Pay attention to the advice from those who have done it. Find the path that best fits your demeanor and skills, and follow it.
Ignore all money advice from broke people. If your first question to someone giving the advice is “Are you a millionaire?” or “What’s your net worth?”, you might offend someone, but you’ll usually stop the advice right there.
Marry a spouse that is compatible money-wise with you and work together on your goals.
My husband asked – what if the person is single? My answer is that being married (with a compatible person) saves you money. We both have similar values about avoiding debt and saving and are pretty aligned on spending.
Educate yourself on everything you can regarding your money. I’m grateful to find joy in this and my guess is most people reading this site do as well.
If there are people you trust, and you know are doing the right thing when it comes to finances, ask them for advice.
Work hard, make sure to keep your reputation solid, know that slow and steady will win the race. Set goals and once you reach one it’ll keep you motivated to keep going.
Evaluate what is really important to you and focus your time, energy and money on that.
And make sure your partner shares these views on priorities and finances!
To me being wealthy is not having to worry about money.
It’s simple, but not easy to be wealthy. Spend less than you earn, and you will become wealthy. The larger this gap, the quicker you will become wealthy. Take the excess, invest it in something reasonable, and soon you will never have to worry about money again.
Manage your assets yourself. No one cares more about your money than you.
Keep investing expenses as low as possible. It is easy to do this by eliminating the financial advisor, and choosing low cost mutual funds.
You should also maximize tax breaks, especially if you are a high earner. For most people this is making maximum contributions to pre tax retirement accounts. You could consider tax loss harvesting. For those with 1099 income, maximize the Qualified Business Income deduction.
Save money. Even when it hurts, save money.
Invest in your retirement plans early in your career. If nothing else invest enough to get the company match if that is the plan offered, this is free money.
Start those habits early and they will pay off tremendously later in life when you can retire before you hit 67 years old!
Surround yourself with high quality people or friends that follow strong financial principles and discipline. The wrong crowd hurts us as adults, just like it did when we were kids. (So & so is going on another trip or has x new car or appliance, therefore I should too).
When you are considering a purchase, evaluate it against the opportunity cost of what you could do with those funds against your financial goals & objectives. It’s a balance, for me it’s not just live on 15% (or whatever) of your income to get to FIRE as quick as possible & then check-out. Whatever your balance point is, find it & stick to it.
Focus on what you can control. For us, that meant investing in our careers, saving as much as we could as early as could and invest for the long term.
I really do believe that time in the market, particularly when the market declined, was the key to our ability to build wealth. The lesson I would extrapolate is to be willing to make investments now and over time for a long term pay off.
I have less faith in get rich quick opportunities like some of the day trading mania that occurred in 2020. I don’t doubt that money was made quickly but I am suspect about the ability to sustain it over time.
For me the stock market and real estate have helped me. I would invest as much as you feel comfortable slowly each month into the stock market. SP500 is great. You don’t need to think.
If you want to buy houses, I would save up for a down payment of 25%. Be sure you can pay the mortgage if you have no tenant and know there are bad tenants. Buy in an area with good school districts so you attract those families. You can also use your house as a starter home and upgrade and rent your first house. That way, you have a lower down payment and lower interest rate. Location is the key and make sure you are in an area that has potential to grow. Make sure your state is landlord friendly.
Invest early in your retirement accounts and learn how to save. Time is your best friend or worst enemy when it comes to investing.
Second, buy a home that needs a little work. You will get a better deal and gain some equity along the way. Just don’t go overboard on renovating or making changes to it.
Don’t get divorced. I see people’s financials every day. Divorce will wreck your finances.
Buy used cars not new ones. I wouldn’t lease cars either, rarely is it a good deal.
Use auto drafts to invest it and forget it.
When getting a mortgage look at longer-term arms — 7 and 10 yr specifically. People are rarely in a home that long with the same mortgage. It can save you hundreds of dollars in payments. We have never had a fixed-rate mortgage ever.
Make sure you’re solving for a positive cash flow no matter what. That’s hard for someone starting out.
When we were first married all of our friends were going on vacations and traveling, we didn’t. It was major FOMO but we didn’t have the money and wouldn’t put it on a credit card.
This is the most important, so I saved it for the last. Learn how to save when you don’t have money. If you can save when you are broke it will be easy once you start making some money.
It’s never too late. Get started and keep at it.
Time is your friend in building wealth.
Learn about all aspects of money: Earn, Save, and Invest. Educating yourself on all things financial will give you the keys to the Earn, Save, and Invest kingdom!
It’s important to keep an open mind, too. The paths to becoming monetarily wealthy are diverse and fascinating, and what inspires and motivates one person might not do that for another.
I’ll never forget when one of my fave money bloggers J Money replied to a comment I made on one of his posts; he congratulated me on my bank/credit card bonus hustling, which at that time had amounted to around $8K in two years. He said something like: That’s great, but I can’t bring myself to do it anymore even though I know I’m giving up free money. That comment caused me to pause and reflect. I realized in that moment everyone has their unique money-making journey — what they’ll do and won’t do at any given point to reach their financial goals. I reasoned if I maintained a growth mindset and flexibility and committed to applying what I was learning about money, I’d achieve financial success no matter the angle I approached it from.
I’m also proof you can have an average income and a large chunk of your life where you don’t save at all and STILL end up with a decent retirement stash if you’re open to learning about money and acting on what you learn. Even without my inheritance, I was on track to become a millionaire by 60.
- Manage your finances to consistently live beneath your income. A budget of some type is needed, whether its detailed, or photographic memory expense tracking, or saving a percentage of income first and then spending and giving no more than what is left over. As your income increases you will be able to have more and do more without filling your life up with debt and the chaos and bondage it brings with it.
- Put your emotions in check. While past returns are not a guarantee of future return, know the historical stock market record shows that downtowns and corrections have been short-term blips that on average last only a couple of years and that it usually has three-to-four positive growth years for every year of negative growth it encounters and afterward it rises to levels far higher than it was before the downturn occurred.
- Believe the formula for successful investing is buy low and sell high and that time in the market (long-term investing) helps you do this, whereas market timing (short-term thinking) often causes people to fail.
- Adhere to biblical financial principles that instruct people on giving, saving & investing, debt elimination, avoiding cosigning debts for other people, and diversifying assets.
Slow and steady wins the race. ESI is the best path.
Like others have mentioned, buy index funds and forget about it. Just don’t make the same mistake I did by buying Vanguard targeted date funds in a taxable brokerage account. I learned this the hard way when I filed my taxes this year.
Try not to keep up with the Joneses. As Dave Ramsey says, ‘We buy things we don’t need with money we don’t have to impress people we don’t like.’. The sooner you decide you don’t need to impress others, the better off you’ll be. While I am not perfect and continuously work on this, I find it’s so much better for my mental health. Comparing really is the “thief of joy”. It’s exhausting! Focus on your own journey.
I have nothing new or brilliant to share.
Start making saving and investing money a habit that will stay with you your whole life.
I am also a huge believer in manifestation and the law of attraction. I write down all my family, work, and travel goals each year. I also make a vision board each year and tape it to my bathroom mirror so I can see it multiple times a day. I put my end of year net worth goal on the vision board along with photos and other things.
I know not everyone believes in the law of attraction but I have had a lot of goals come true and I plan to keep at it.
I have a few thoughts on how to become wealthy:
- Set goals and track your progress. Becoming wealthy doesn’t just happen. You need to want it, work for it, and plan for it.
- Grow your income. Find ways to grow your earnings every year. I believe corporate careers are a great way to make this happen.
- Do not try to keep up with Joneses. The more money you earn, the more money you should save and invest.
- Enjoy your journey. Don’t wait until you become wealthy to be happy. Life is too short.
Have a plan for how you will spend your money before you get money. If you develop a financial plan and vision when you are broke, when you actually start making a lot of money you will not have to figure out what to do with it.
Whether you make a little or a lot of money, plan to have multiple streams of income, save consistently, and invest systematically.
Try to earn the maximum amount of income possible. Save the highest percentage you can sacrifice, and diversify your investment, so you create different income streams.
Get a good paying job and learn to live within your means — below your means is even better.
Whatever money you save, invest for the long term. That is the key! Without investing the money you save, rarely will you ever become wealthy.
The easiest way, with minimal effort, is to invest in a total stock index fund and make it automatic. Invest when the market is up, invest when the market is down. Slow and steady wins the race but remember to enjoy your life along the way as well. It’s ok to enjoy your good fortune, just don’t go crazy!
Again, probably don’t do what I did, but I suppose hard work and maybe outworking others never hurts? (Acknowledging that there is a limit to this, and it’s not always a best practice in all cases.)
There are SO many resources available now that I didn’t have then. I discovered podcasts in 2020, and I have learned so much. There’s a lot of great information/advice out there, I suppose the only downside is determining what is right for you and your life! You ultimately have to live your life and not anyone else’s. “You do you!”
Honestly, old school practices still work…live below your means, invest a minimum set % every year, and try and grow your income.
Own a money making-machine. It can be something as easy as vending machines or a coin-operated laundry, or a rental property. Figure it out and start somewhere. Make your plan and associate with others who walk that capitalist path. Learn from them and let your income producing venture eventually take care of you and your family.
Having traveled extensively to many places including Cuba and China, there are billions of people in this world who do not have the same opportunities that America provides. We live in the best place in the world that will meet you half way if you only work hard and take some risk.
Obviously, there are other ways to make it, but for me there is nothing like being the captain of your own ship, and the master of your destiny.
- I cannot overstate the importance of being on the same page as your spouse, with finances as with everything. Wealth can be obtained by anyone but requires dedication, hard work, and sacrifices. The path is difficult if only one of you really wants to make that journey, and near impossible if the most important person in your life is actively working against you and/or begrudges the efforts you make to get there. For people who are not yet married I would suggest serious conversations about money and your vision for the future prior to marriage. For married people, do whatever it takes to decide on your financial priorities as a pair, because you and your spouse working towards the same goals is one of the most powerful things in life and can get you to wealth faster than you imagine. Divorce, however, is absolutely devastating in all regards, the number one destroyer of wealth, and something I wouldn’t wish on anyone.
- Financial education is of critical importance. Several studies of millionaires reveal that the vast majority came from average backgrounds, are self-made, received little, if any, inheritance, and yet achieved great wealth. What made them millionaires is how they think and view the world, which are skills that can be practiced and learned. Best of all is how many successful people have written books (and excellent interviews on ESI) explaining what they think, the decisions they faced along the way, the actions they’ve taken, and the wealth formula that worked for them, and you can learn from them. I’ve read hundreds of books and blogs about money and am always on the hunt for the next book that can change my thinking, and thus my life.
- Building wealth is more about what you keep and invest than what you earn. Yes, it is very helpful to have a high income and you should do whatever you can to maximize your earnings, but you can always outspend your income. My sister’s business partner has earned $500k+ per year for over a decade. She recently went through a divorce where it was revealed in court that her and her now ex-husband actually had a negative net worth by several hundred thousand dollars. The lesson: someone making $50k/year and spending $45k/year would be better off financially than a high-earner who spends it all. Additionally, if the lower-earning person invested that same $5k a year into a Roth IRA from age 25 to 65 and achieved a market-average 8% return, they would retire with $1.5M tax-free.
- Investing in real estate has worked well for me and I also appreciate it’s not for everyone. In my mind the formula is simple, no matter which path you take: buy assets, avoid liabilities. I have considered dividend stocks, syndications, storage units, and other forms of passive income and so far rental real estate is the best asset that I can come up with. I’m open to other ideas though!
One of 2 ways:
- Choose what you absolutely love and figure out a way to start a business or make money off your brand.
- Go a corporate route – find a profession that pays well, be decent at it and change companies every few years.
If you go the second route, you need to find ways to keep yourself entertained (e.g. hobbies, sport, etc.) and how to cope with stress that Corporate America entails. I never thought that work can be so stressful before working at one of S&P 500 companies and having a manager who thought “micromanaging” was a way to go. Gladly I met a very good friend there and we were able to make fun of the entire situation and everything that happened at work.
Earn well, live frugally (but comfortably) and invest the savings wisely for the long term.
Don’t chase the Joneses and live on your own terms.
No magic here – just plain vanilla advice!
I really don’t have any new ideas that haven’t been written here by others but for me it was: start young, be consistent in your savings, find a balance between living for today and saving for the future, and don’t invest in stuff you don’t really understand.
This one has been mentioned before by others on this blog as well, choose your spouse wisely, obviously for many reasons but also for financial reasons. I was very lucky that my late husband and I were in total alignment on our financial values. And again, I am so grateful that my current husband and I are completely in sync on our financial decisions. It would be incredibly stressful for me to have someone else negatively impact my financial stability.
This doesn’t apply in my situation, but something I have seen a lot in my friends who are in their late 50s and early 60s is an over-reliance and trust in their financial advisor. I tell my friends to keep asking questions of their financial advisor until the advisor explains it in a way that they can understand.
As a former CFO, I always viewed it as my job to ensure that I explained the finances of the company to the CEO and executive team in a way that they could understand. I believed if they didn’t understand what I was saying, then that was on me not them.
I see this a lot in particular with women in my age group. They are intimidated and don’t push their financial advisors to explain things to them so that they can understand it.
I had a situation a couple of years ago where a 60-year-old retired single widowed friend of mine asked me to look at her investment statements from her broker. The broker had her in way too risky a portfolio and was charging very high fees. She was in almost 100% equities, almost all individual stocks, and some of those were quite risky, in my opinion. I helped her to find a new broker to work with that would take the time to answer her questions. I think there are some great financial advisors that provide a ton of value and if you are going to use an advisor, you should find someone you feel very comfortable asking questions to.
Do what ESI says!!
He knows what he is talking about!!
Know yourself
Evaluate what you can live without and what you choose to keep in your life
Practice delayed gratification
Stop buying quantity, start buying quality in as many places as you can
Don’t be discouraged if you don’t make a lot of money. Maybe you don’t retire in 10 years, but you can retire comfortably and build a decent amount of wealth without having to invest in high-risk enterprises.
It’s not too late to start if you didn’t have the ability to start in your twenties. Start where you are. You will be surprised at how fast your savings/investments can grow.
Automate your savings and take advantage of matching funds for 401K savings. Start your own IRA and/or Roth IRA. Treat it as a bill for your future self.
Start a brokerage account early on and set up automatic investment there as well. Start small and increase the amount when you can. Stick to low fee index funds. This will give you funds outside of your retirement to use for other items in the future as needed.
Always have some cash funds set aside for emergencies. There is different advice on how much this should be, but explore what percentage feels right for you.
Manage your own money. Educate yourself. It is so much easier to do these days with reputable sites, blogs and books to learn from. Don’t invest in what you don’t understand.
Limit debt. If you have debt – try to have a plan on how to pay it off. I have had debt – car loans, school loans, mortgage, credit card. I never liked it hanging over me and did my best to pay it off sooner that I had to.
Along the same lines — don’t spend what you don’t need to. My husband said the best advice he got was to ‘live like a student’ as long as he could after he graduated, even once he got a good job. Basically, don’t buy the new car if your older car is still working. Don’t keep up with the Jones. Don’t shop for retail therapy.
Pay yourself first.
Be patient. Time is amazing in what it can do for you.
Marry thoughtfully.
I don’t have any special advice given our fairly traditional path to becoming millionaires.
Perhaps I can offer some encouragement in that almost anything can be overcome if your goal is to become wealthy, particularly when you are young. That is when I had my two legal issues, and my wife had a bad credit score and no money to her name when we met.
Perhaps the best thing, as far as getting us to this point, was that we had a shared goal of not being poor. Along the way we found the right balance for us between having more options available to us with our wealth, and the career sacrifices we would be willing to make in order to have more.
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Lots of good stuff, huh?
To read more on this series, check out part 15 here.
No doubt, many great commentaries that have worked for ESI millionaires over many decades. Thanks for re-sharing these insights!