My grandparents currently live in a 950 square foot, singlewide “trailer.” My grandfather has owned, operated, grown, and sold several businesses over his lifetime. He and my grandmother have lived below their means, invested in property and mutual funds, and now, in their mid-sixties, they’re very wealthy. In fact, they’re multi-millionaires. I’ve learned a lot about personal finance through their success, and want to share the 6 lessons I’ve learned from my grandparents — the multi-millionaires.
Lesson 1: You Don’t NEED the Nice, Big, New ______!
Before the mobile home, these millionaires lived in a very modest, 1,800 sqft, 3-bedroom home in a very ‘normal’ neighborhood. Their neighbors never would have known how wealthy they are.
They drive a 2006 Honda Accord, change their own oil, built their own deck and shop at JC Penney. They don’t care about brand names or the newest, shiniest whatever-it-is. They simply buy what actually fits their needs and let “The Joneses” worry about all that other junk!
Lesson 2: The Best Things in Life Aren’t Things!
If you asked my grandmother what was most important to her, she would say 2 things: Her faith and her family. Everything else is secondary, or doesn’t matter at all.
Sure, they have lots of money and occasionally buy nice things or take nice vacations. But those are far from their priorities. They don’t often buy lavish gifts for people, because they know those ‘things’ aren’t too important. They give lavish love and unconditional support, because that’s what really matters to them.
Lesson 3: It Doesn’t Matter What YOU Think!
These multi-millionaires aren’t interested in trying to impress you! They don’t care what you think of their used car, small home or modest lifestyle. That stuff isn’t important to them and your opinion certainly isn’t going to convince them otherwise. They buy things that are a good value, reliable and comfortable for them. Even though they’ve “got it,” they simply don’t feel the need “flaunt it.”
Lesson 4: Debt is Dangerous Territory!
From early in life, whether for cars, business, investment properties or vacations, these now-multi-millionaires only spent money they actually had. Car payments? No way! Credit card vacations? Absolutely not! You can call them old fashioned, but they believe debt is a mortgage on your future. They know that life can change quickly, and if you’re in debt when it changes, you may find yourself in a big mess. So how did they stay out of debt? It’s simple…they spent less than they made!!
Lesson 5: Do Work You Love and Work Hard
From age 5, my grandfather had a full-time job. In grade school, he picked cotton on the farm. At age 11, he opened his first business doing home repairs, and he’s never slowed down. All his life, he’s worked hard to provide for his family. Did he mind the work? Not at all, because he always did work he actually loved. And it’s absolutely paid off, as you can tell.
Lesson 6: Save, Save and Save Some More!
As long as these now-multi-millionaires have been earning money, they’ve been saving money. Most of their adult lives they’ve kept a 6-month emergency fund. They’ve set aside car repair and replacement funds, vacation funds, college funds, retained business earnings and retirement funds. At least 20% of their income has always gone into savings and investments. The result? They’re multi-millionaires!
There’s no guarantee that following these 6 simple rules will make you a millionaire. But if you work hard, live below your means, build savings and stay debt free, then I know you will build tremendous wealth over your lifetime.
Have you had a financial role model? What was something invaluable they taught you? Let us know in the comments section below!
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Clint and Katy Davis are PerkStreet Customer Columnists and founders of Davis Coaching. As financial coaches, their passion is helping people become and stay debt free! Their personalized coaching is designed to help you get your financial life where you want it to be. Like personal trainers for your finances, they can help you develop a specific plan to achieve your goals, and provide the expertise and accountability to get you there. If you’re ready to take control of your financial life, visit Davis Coaching online, check out the Davis Coaching blog, and connect with Clint and Katy on Twitter and Facebook.