Hitting the million mark, especially if you did it all by yourself, is a huge achievement— both financially and personally. While some people make peace with the millionaire tag, most head towards the next big milestone— becoming a billionaire.
However, a lot of people fail to realize that although the difference between a millionaire and a billionaire may sound trivial, it’s still a huge leap, one that not many can take. So if you have decided to embark upon your journey to become a billionaire, what you need the most right now is to hear from the leaders who have already walked in your steps and achieved the goals you want.
Why Can’t Every Millionaire Become A Billionaire?
Once people hit the millionaire mark, they often feel the billionaire mark is just a few steps away. However, the more money you have, the harder it becomes to manage. One of the biggest mistakes most millionaires make is investing in appearing like a millionaire. A huge house, multiple cars, international trips, and frivolous spending soon wear down their money and make every other financial milestone impossible to achieve.
While rewarding yourself for major achievements is important, ensure you never overspend. Look at the lifestyle of billionaires around you. Look at their initial years— you don’t need branded clothes or accessories to show you’re rich. After all, a billionaire doesn’t need to prove their worth to anyone.
3 Brilliant Billionaires With 3 Unbeatable Financial Pieces of Advice
If you’re ready to start the next part of your journey, these three pieces of advice from seasoned billionaires are all the headstart you’ll need.
#1. Warren Buffett
No list of billionaires is ever complete without mentioning Warren Buffett, the fifth richest man in the world with a total worth of $104 billion as of the latest reports. Buffett is a 100% self-made man who made this unbelievable fortune purely through his investing skills.
Investing is an indispensable skill if you really want to grow your money. Whether you’re in business or a fundamental investor, knowing where to put your money and get the best returns is the only thing that will take you forward.
Here are some of the best advice from Warren Buffett:
1. “Rule No. 1 is never to lose money. Rule No. 2 is never forget Rule No. 1.”
Warren Buffett’s most popular investing rule contradicts the industry’s rulebook. It’s no secret that investments that promise the best returns often come with a greater risk. And that’s why so many young investors jump into risky schemes or stocks with their eyes fixed on the possible gains and completely ignoring the possible losses.
Buffett, on the other hand, believes that the first rule to making money is to protect your portfolio from losses. For example, if you have $1000 to your name today, it’ll be comparatively easier to grow that into $10k. But if you invest and incur a loss of another $4k, your ultimate $10k dream will now be $15k away.
Investments don’t always have to be risky. So when looking for a new scheme, make sure you watch out for the risks first and only consider the rewards.
2. “Opportunities come infrequently. When it rains gold, put out the bucket, not the thimble.”
While a lot of us believe that there will be plenty of opportunities in the future, Buffett believes that some golden opportunities only come a few times in life. So when it does, make sure you don’t miss out on it or be a miser in your efforts, grab it with both your hands and make the best out of it.
For instance, if you see the stock prices of a promising company drop momentarily, think hard and fast and invest as soon as you can. Companies like Amazon or Google might face slight drops in their stock prices after minor issues. But considering their market share and past service record, they’ll always go back up.
3. If you like spending six to eight hours per week working on investments, do it. If you don’t, then dollar-cost average into index funds.”
When people think of making money through investments, the only option that comes to their mind is stocks. However, stocks aren’t the only way to get rich. If anything, stocks are riskier, and you’ll be pitted against the best investors in the world, making it harder for you to make many gains.
If you’re looking for a quick and easy yet promising investment option, try index funds. Index funds are cheaper, safer, and aren’t as volatile as company stocks. Also, investing in the stock market requires you to pick and study individual stocks, whereas investing index funds are a portfolio of stocks with default diversification.
#2. Jeff Bezos
Who doesn’t know Jeff Bezos? After all, in the last few years, Amazon has turned into a household name. With a net worth of $110 billion, most of his wealth comes from his business ventures.
For anyone looking to make it big through a business, here are three pieces of advice from him that could change your life:
1. See What The Crowd Thinks
No matter what industry you are in, if you’re trying to take off a business, you always have to think of the people. Not just your interests, passion, or personal views but, most importantly, the audience you’ll be catering to.
The biggest reason Amazon is such a hit is because it caters to the customers’ pain points. For instance, a lot of people are worried about financial security when paying or shopping online. That’s why Amazon ensures seamless returns and refunds every single time, making people feel more comfortable using the app.
Similarly, many people consider online shopping to be a costly affair. However, most products on Amazon, be they clothes, accessories, or day-to-day items, are reasonably priced.
It also has one of the biggest collections of every product category in the industry. When you give your customers everything they can possibly ask for, why won’t they keep coming back to you?
2. Put Off Large Purchases
If you’re planning to make a large purchase that could wipe off a significant portion of your savings, it’s probably not the best time to buy it. Apart from unavoidable expenses on health or education, nothing is worth going into debt for.
Now, the huge purchase itself might not put you into debt. But if it reduces your purchase power to the extent that you struggle to pay the bills, sooner or later, you will go into debt just to make ends meet. In a situation like this, that purchase won’t be worth it.
That’s why Bezos recommends that before you make a huge investment, assessing its impact on your long-term financial stability is important.
3. Keep An Emergency Fund
Jeff Bezos clearly believes in the importance of being debt-free to be financially independent and maybe even rich. It’s the same principle that Warren Buffett preaches. If you’re in debt or constantly making losses, your biggest struggle will always be to recover from those losses. You’ll never have enough to grow your assets.
That’s why he recommends that one of the most important pillars of personal finance is to have an emergency fund for an unforeseen crisis. Instead of taking out a loan and paying back extra interest, you can simply rely on your own money.
#3. Oprah Winfrey
Oprah Winfrey might not be the richest person in the world, but when talking of self-made women billionaires, her name still tops the list. Currently, her net worth is reported to be more than $3 billion. And it’s no secret that when it comes to life advice, she offers much-needed insight into real life.
So here are our top 3 all-time favorite Oprah Winfrey personal finance advice:
1. The Towel Theory
Oprah’s famous Towel Theory explains that if you keep splurging on unnecessary luxuries and increasing your lifestyle costs every time your salary or revenue increases, you’ll never meet your financial goals.
The theory comes from her personal financial mistakes in the past. Recounting her struggling days, she explained that when her salary was just $12000, she would buy towels from Target. But as she started making more, she switched to costlier towels at Saks Fifth Avenue.
If she kept up this practice, the increase in her salary would soon be canceled out by her increase in expenses. Ultimately, she’ll be left stranded just where she was before.
The same goes for you. If you really want to grow, don’t waste the extra money on depreciating things. Instead, invest in it to make more out of it.
2. Diversity Your Income & Earn While You Sleep
Oprah’s long-running TV show, The Oprah Winfrey Show, gave her enough success and financial freedom to get comfortable. But she didn’t.
Instead, she left the show, wrote and published a few books, launched her own radio channel, and started a magazine and media company. Diversifying her income sources ensures that even if one of them takes a hit, she’ll still have the rest to fall back on.
Additionally, her books act as a passive source of income. She’ll continue to make money even when she sleeps as long as the book sells with no extra effort.
As a new investor, if you find luck with one type of investment, you might be tempted to stick to it forever, and that’s where most of us go wrong. If you want to minimize your losses, diversifying your funds is very important.
Invest in the stocks of different industries, go for bonds as well as real estate, or invest in smaller companies. In the event of a crisis, when one industry takes the hit, and you suffer losses, at least your investments in the other industries will be safe.
3. Invest In Appreciating Assets
Oprah Winfrey certainly knows the importance of a good real estate portfolio. Her houses in California, Washington, Hawaii, and several other places prove that. Unlike other assets like cars that only depreciate in value, houses usually grow in worth over the years.
Along with the value of the property itself, you can also make extra income on the side by renting them out. In fact, a lot of people use the rent money to either pay off any debt on the house or invest in a new property. Either way, investments should only be made on growing assets.
FAQs
1. Where Should You Invest Your Money?
Investing in today’s economy is much easier. You not only have a lot of options, but it’s also quite accessible, especially through online investing apps. If you really want to grow your money, play the big games and invest in real estate, stocks, and mutual funds. If you want better returns, you can also consider turning angel investors for start-ups or investing in private equity funds.
2. How Long Does It Take To Become Billionaire From A Millionaire
There’s no one answer to this. While it took Warren Buffett 25 years to go from being a millionaire to a billionaire, it took less than two years for Jeff Bezos and Mark Zuckerberg to reach the same goal.
That’s because both Zuckerberg and Bezos grew their wealth through their businesses, which had immense success. On the other hand, Buffett grew his wealth by investing in different stocks and companies. Over the years, his returns amounted to billions. So it really depends on the path you pick to grow your money.
3. What Jobs Do Billionaires Have?
They don’t! And that’s what makes them a billionaire. People who actually want to grow their money don’t waste their time building a career. Instead, they build a brand or an empire. Take any name— whether it’s Elon Musk or Jeff Bezos, they all have one thing in common— a business.
And when we say business, it doesn’t have to be a B2C company. It could also be a personal brand. For example, JK Rowling has a net worth of $1Billion, and all her earnings came from the famous Harry Potter Series, the movies, and the merchandise.
The post Best Personal Finance Advice For Millionaires From 3 Billionaires appeared first on Due.
This story originally appeared on Entrepreneur
