Five Rules that millionaire follows

    Rule #1: Think long term

Here’s a basic overview of Warren’s net-worthover the years:

  • $20,000 by age 20
  • $1 million by age 30
  • $25 million by age 40
  • $35o million by age 50
  • $3.8 billion by age 60
  • $36 billion by age 70
  • $55 billion by age 80
  • Today’s he’s 86 years old and worth $73 billion

    Rule #2: Live well below your means

    Twenty years ago we began studying how people became wealthy. Initially, we did it just as you might imagine, by surveying people in so-called upscale neighborhoods across the country. In time, we discovered something odd. Many people who live in expensive homes and drive luxury cars do not actually have much wealth. Then we discovered something even odder: Many people who have a great deal of wealth do not even live in upscale neighborhoods.

    — Thomas J. Stanley

    Rule #3: Know that financial independence is more important than displaying status

    But the lavish lifestyle sells TV time and newspapers. All too often young people are indoctrinated with the belief that “those who have money spend lavishly” and “if you don’t show it, you don’t have it.”

    — Thomas J. Stanley

    Rule #4: Allocate your time, energy, and money toward building wealth

    On average, millionaires spend significantly more hours per month studying and planning their future investment decisions, as well as managing their current investments, than high-income nonmillionaires.

    — Thomas J. Stanley

    Rule #5: Have more than one source of income

    here are seven sources of income some millionaire  might have:

    1. Earned income (salary)
    2. Profit income (business profit)
    3. Rental income (real estate)
    4. Royalty/patents income (depending on your business)
    5. Capital gains income (if you sell an asset for more than you bought it for)
    6. Dividend (4% every year on average in index funds)
    7. Interest (lending money to someone else)
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