Millionaire Wisdom: How to Become Wealthy

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 had originally considered publishing collections of these answers in themed e-books and selling them. But instead I’ve decided to publish them here on ESI Money in my new Millionaire Wisdom series.

Millionaire Wisdom posts will feature a key question I asked millionaires, then share multiple responses from various millionaires, along with a link to each Millionaire Interview in case readers want to read more from that author and/or see the context in which the answer was given.

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 begin 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…

Millionaire 1

While wealth accumulation is important, we are conscious to enjoy our life now. My wife grew up with very little, and is comfortable living a much less spendy lifestyle if needed.

I am positive we have enough now in our 401Ks that we won’t be destitute in retirement. While we are continuing to save, we feel it is important to enjoy things while we can, especially with regard to travel.

My wife has seen lots of tragedy in her medical career, and while we try not to be spendthrifts, we also try to enjoy our vacations without breaking our budget. 

Millionaire 2

You have a choice of what to do with each dollar, so why do so many people struggle to delay gratification and throw away so much money on temporary things? My advice is don’t be materialistic, avoid competing with friends and neighbors, and be very conscious and cautious of ALL marketing. 

I’d like to take this opportunity to thank ESI for all that he does. His openness and sharing really is something I look forward to and grow from. Also to the other readers/bloggers, I often go through your comments and appreciate the sharing and thought, I learn a lot from it.

Millionaire 3

Learn about compound interest. Compound interest is your enemy if you have debt, but it’s your friend if you have investable assets. Invest early and invest often. 

Invest in low-cost index funds…don’t try to beat the market. You can’t. 

And even if you did, you can’t do it consistently for a long time. If you have time and extra money, by all means, go buy Facebook or Amazon stock for the fun of it.

However, if you’re barely getting by, just invest in the broad market and don’t look at it for the next 30 years. Fees eat into your returns so pay attention to them….even though a 1% fee sounds small, it really adds up when compounded over 30 years.

Millionaire 4

When I was 22 fresh out of college and started saving in a 401k I looked at the million dollar mark and said how in the hell am I going to get there making $18,000 a year. But my saving grace was starting early.

So start early, don’t let the negative news influence you, stay focused, don’t stop but keep up the good fight to your goal, don’t get discouraged with your failures but learn from them. Financial planning is not that hard and it is boring at times but the little steps you take now will yield big results 30 years from now.

I hope you have seen this with our example that the MSM is wrong in that the average individual can retire rich and I feel I am a little bit of an above average under achiever.

Millionaire 5

Earn.

Save.

Invest.

Also, nobody cares about your money more than you. Keep your investments simple, avoid excessive fees (because fees will cost you millions) and educate yourself. This site is a great place to get started.

Millionaire 6

It’s a marathon not a sprint. I looked back at some of my notes from when I first started tracking budgets, net worth, etc…and I could still remember how in my 20s the elusive $1M net worth mark seemed so far away.

It basically ended up sneaking up on me. There is no one path to wealth, but almost every path requires sacrifice (controlling budgets) and a vision (long term planning/goals).

There is so much access to information like this wonderful blog and others like it. I learned and stumbled through all of this blindly.

Learn as much as you can form all the available resources, but you have to make a plan and stick with it. My plan would have been much more refined in my early 20s had I been exposed to any of the concepts often shared on personal finance blogs.

Finally, the most important thing to remember is that you have to have a purpose for the wealth accumulation. Money for its own sake is useless.

Try to imagine the ideal life you want to live, and then use money to back into it.

Millionaire 8

Start young, 15% should be the minimum [saved] and avoid consumer debt at ALL costs!

Millionaire 9

I like Dave Ramsey’ advice about having a plan for each dollar.

It is easy to spend money when you have a windfall.

Millionaire 10

There are no secrets. Everything about building wealth has been published over the last 100 years; even longer if you throw in religious texts or the Roman Empire. 

Today, there are so many free resources (blogs, podcasts) that I consider it easier to build wealth today than when I started. 

ESI has it down to a very simple formula. Either you work on earnings, savings or investing. 

For maximum speed of wealth, you increase all three. If you hit 2:3 like I did, you can still retire early or build a million dollar net worth. 

1 million is not a big deal. (It is a huge deal when you are starting out). When I hit my first million, it was cool for a week or so. After that, it was get back to work. 

For me, it has nothing to do with money. It is freedom to choose what I want in life. In my case, my job became my hobby and my hobby became my passion.

Millionaire 11

You don’t have to have a high income or flashy job title to build wealth. In fact, your friend or neighbor who has a bigger house and/or nicer car probably has less wealth than you. Know your values, know your budget, know your plan, and stick to it.

Control what you can control, everything else, let go and let God. The ESI formula really does work over time.

Millionaire 12

I want to be in a place where my money works for me so I don’t have to.

Millionaire 13

You have a choice of what to do with each dollar, so why do so many people struggle to delay gratification and throw away so much money on temporary things?

My advice is don’t be materialistic, avoid competing with friends and neighbors, and be very conscious and cautious of ALL marketing.

Millionaire 14

Start early and stick with it! 

Save whatever you can, even if it’s a small amount. 

Take some risks, but do your research first – be too safe with your investments and your job, and you will fall behind as the world keeps moving forward. 

Find what works for you – real estate is great for us, but it’s certainly not for everyone. You can do just fine with steadily increasing saving in low cost funds. 

And watch that debt! It can hurt you in the long run.

Millionaire 15

I never thought it possible that we could have achieved a high net worth. 

The only way to do this is to follow the principles from your ESI site and all the financial books out there. You will see how quickly your net worth will grow once you focus.

Millionaire 16

My father had an excellent career, and his background as a Division 1 college athlete and time in military service provided a good foundation. He learned, and then demonstrated, the ability to work hard as part of a team.

And his individual performance produced good results for his teams. While every action and effort may not have a quantifiable value, the sum total of those actions over time will produce results and value that can be quantified. The value he demonstrated helped a great deal in determining his future opportunities.

So, get good at something, good enough where it is a fact (not opinion) that you are good. Then apply those principles for excellence in work and investing.

It will take a while to reach a ‘critical mass’ that throws off sufficient cashflow to allow FI/RE, and that time is going to pass anyway so you will want to have something to show for the years. Track your progress, even a simple spreadsheet will be helpful; a yearly snapshot is actually kind of fun to look back on and see progress (or lack thereof).

Mistakes will be made. But if you just make them once, then persistence and habits will pay off. Personal finance comes down to just two things: 1) save more; 2) spend less. That’s it, nothing more.

Millionaire 17

Pay no attention to what anyone else is doing. Your life is yours to live as you see fit.

Live frugal and with confidence. Your neighbor may think you’re strange or eccentric for driving a 20 year-old car. Don’t worry.

It will all make sense when you’re living your dreams. He’ll have a new car while you’ll be taking a three-month trip through one of your bucket-list regions of the world.

The latter is better. Living free trumps just about everything.

Millionaire 18

While none of us are guaranteed tomorrow, you have to think about the long-term. My wife and I designed this plan nearly 30 years ago and stuck to it. We had to move to make it happen, we had to endure long hours and a lot of time away from home and each other to get to this point in our lives. 

We were blessed with no major life issues that could have derailed us. The first million WAS hard. My goal was to achieve that by 35 and I missed (the dot com bubble hurt) but I stayed in the market, I bought low, and had a million by 37. I didn’t panic in 2008 but doubled down and found value. 

The last 10 years have been much easier to grow my wealth through solid fundamental investing in equities. The index funds my 401k and deferred income are invested in have not performed as well as my own diversified portfolio because I was fortunate to invest in some good growth companies with solid market positions and positive cash flow.

I had to do my homework but as a buy and hold investor it is my belief that to get far ahead you need to hit a few outsized winners. If that intimidates you there is nothing wrong in EFT or low cost index funds.

I don’t pay any commissions, given the small number of trades I do my costs are low, and I don’t worry about market timing. I do look for good deals in good companies so I am always researching, even if I am not buying or selling.

Good luck. FIRE is an achievable goal for anyone with a 30-year work history you just have to be willing to commit to it.

Improve your odds by standing out as someone who goes the extra mile and never sit around waiting for someone to give you something. Make your own opportunity by investing in yourself and the outcomes you want.

Millionaire 19

Get rid of excuses. Everyone has them, but if you want to accumulate wealth, it’s about keeping some of the money that you make each month and investing it. When gas prices doubled, people paid.

They complained, but they paid. Now that they have come back down, I would bet most people are not saving that money, they are spending it on eating out or cell phones or whatever.

Do what you need to do today so you can do what you want to do later…

Millionaire 20

Just keep investing and try to up your savings 1% a year. 

Pay cash for a car and keep it for 10 years. There are plenty of 4-year-old cars that are 40% cheaper than new. Wife got a new car last year. All the bells and whistles, but it was one year old.

$20K cheaper than brand new. The horrors, her 2001 RX300 didn’t have BlueTooth or GPS. We managed. She now has a 2015 RX350. Basically the same car, 15 years newer and we paid about the same price as the 2001.

Millionaire 21

The best advice is ESI. It takes hard work and discipline but it’s not rocket science.

There is no shortcut unless you win the lottery or have a trust fund.

Millionaire 22

Books that had a major influence on me early in my life:

• The Magic of Thinking Big
• Die Broke: A Radical Four-Part Financial Plan
• Think and Grow Rich: The Original, an Official Publication of The Napoleon Hill Foundation

One will face many challenges and decisions in your life. You will have to make a million decisions in your lifetime, but you will only make a handful of decisions that will truly affect the rest of your life. Decisions that you will have to make with imperfect information. These decisions usually can’t be reversed and once made and implemented will really change the course of one’s life. You cannot ever undo these decisions and take a different path. 

So, what are these key handful of decisions that you will have to make that are life altering events that you may not see the outcome for years? Let me provide some of those for you to contemplate: 

• What is important to you and want to be as a person?
• Will you go to college and where will you go to college?
• What is your major?
• Where will you work?
• Who will you marry?
• What kind of family do you want?
• What kind of retirement do you want?

These are the key decisions that one will have to make and each one of them will affect and change the rest of your life and wealth. These are powerful decisions.

More Advice: Early and steady investment and slow is fine. No need to try to hit the “homerun” but better to invest in the market with low cost Total Market funds. Everyone can become a millionaire. You only live once so enjoy it and develop a plan to live your dream on whatever income you have.

Millionaire 23

Automate everything so you don’t become a victim of your lack of self-control.

Look at everything you do in terms of strategic time frames. People who live month to month look at their money and ask, “What will this cost me this month?” I ask, “What will this cost me over 10 years time”– I canceled cable TV when I realized it might cost me $12,000 over 10 years (and I don’ t watch commercials any more, EVER). Lots of decisions are like that. 

Consider the source of any investment advice you ever get. Do they have your best interests in mind? 

Learn about compound interest. Learn about investment tax topics. Learn about balancing your portfolio allocation. Get involved in your retirement planning so you can have a retirement.

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Lots of good stuff, huh? 

Stay tuned, we’ll be adding to this series in upcoming future posts.

To read more on this series, check out part 2 here.