Wealthy people usually aren’t born that way. Most spend their lives amassing their fortunes by working hard, spending little, saving a lot and investing wisely. It may sound like a simple strategy, but the fact that the vast majority of Americans fall short of millionaire status proves that it’s easier said than done.

Then again, 11.8 million households in the U.S. boast a net worth of at least $1 million, excluding the value of primary residences, according to market research and consulting firm Spectrem Group, and their ranks are growing. So it’s totally possible.

Read on to learn what you might be doing to keep yourself out of the millionaire’s club. More importantly, find out how you can change your ways and build your own seven-figure nest egg.

You Chose the Wrong Profession

Of course, you can become very successful in any job, as long as you work hard and start saving early. But a higher income can certainly make it easier to save more, faster. According to the Bureau of Labor Statistics, many wealthy people today work in technology, engineering and medicine—fields that are well represented in our list of the best jobs for the future.

With enough time and the right saving approach, you can build a fortune even with a small salary. According to a U.S. Trust “Insights on Wealth and Worth” survey of high-net-worth investors, 55% credit their choice of careers with helping to reach their goals.

What you can do about it?
If you’re still in school, majoring in a promising field can put you on the path to a lucrative career and help make you a millionaire. But remember: You’ll have an easier time working hard for the rest of your life if you have a legitimate interest in your chosen profession.

If you’re past your college days, you can still learn some skills to advance your career (more on that later). Also consider supplementing your income.

You Stopped Investing in Yourself

Your education doesn’t end once you’re done with school. In a world that’s always changing, you need to continuously hone your abilities.

Taking the time to keep your skill set and knowledge base up to date makes you more valuable to your colleagues, clients, current employer and future employers.

As Benjamin Franklin wisely said, “An investment in knowledge always pays the best interest.”

You’re Too Scared of Stocks

Cash stuffed under your mattress or even deposited in a savings account won’t keep up with inflation, much less blossom into $1 million. In order to maximize your gains, you need to invest your money wisely.

In many cases, that means putting your money in stocks. Consider the math: A typical yield you can expect from a money market account these days might be 1%. If you put away $10,000 in one and added nothing else, in 10 years you’d have around $11,046 total with interest.

But if you invested that $10,000 in stocks and earned a typical 8% annual return, you’d have about $21,589, or nearly double the return.

You’re Afraid of Taking Risks

It’s easy to become content with staying in your lane financially—even if your financial lane is paved with low-risk-but-low-yielding savings accounts and CDs that will never make you rich.

A healthy respect for risk is good, when it comes to preserving your wealth, but a total aversion to risk can hinder your ability to ever build wealth.

But to label the wealthy as indiscriminate risk-takers who gamble their savings on pork bellies and bitcoin would be inaccurate. In reality, according to a U.S. Trust survey, 4% of high-net-worth investors describe their risk profile                                      as very conservative, 14% as conservative and a telling 43% as moderate. On the other end of the spectrum, 33% describe their risk profile as aggressive, and just 7% as very aggressive.

You Don’t Save Enough

If you don’t save money, you’re never going to be rich. It’s hard to get around that obvious (but often ignored) principle. Even if you earn seven figures, if you spend it all, you still net zero.

 

You Live Beyond Your Means

Spending more than you earn can put you in a dangerous hole of debt.

On the bright side, you won’t be in there alone: According to the National Foundation for Credit Counseling, nearly two in five Americans carry credit card debt from month to month. And among those balance-carrying households, the average credit-card debt is $9,333, according to research firm ValuePenguin.

You Overlook the Value of Nickels and Dimes

No, we’re not suggesting that you search for loose change under your sofa cushions. Rather, cutting seemingly insignificant expenses—late-payment penalties on your bills and out-of-network ATM fees on your cash withdrawals—can add up to substantial savings.

One in four Americans fail to pay all of their bills on time, according to the National Foundation for Credit Counseling.

You Are Drowning in Debt

Debt can be a danger to your financial well-being. If you’re taking out loans and racking up balances on high-interest credit cards, you won’t have a chance to save much money.

The average U.S household has more than $136,000 in debt, according to a 2018 NerdWallet study, including credit cards, mortgages, car loans and student loans.

But not all debt is bad. Borrowing to go to school, to get professional training or to start your own business can help boost your career and income potential                            in the long run. The trick, of course, is borrowing wisely, at low rates and for purposes that promise a good return on the investment.

You Neglect Your Health

You need to work to make money, and you need to be healthy in order to work. The rich understand that, and 98% of millionaires consider good health to be their most important personal asset, according to a U.S. Trust survey.

You Don’t Have a Budget

Without a budget, it’s easy to live beyond your means because you’re not keeping track of how much you’re spending.

Working toward financial goals, such as saving for a vacation, buying a house or funding your retirement, can also prove difficult if you don’t put together a well-thought-out financial plan.

You Pay Too Much in Taxes

Did you get a tax refund this year? Receiving that lump-sum payment from Uncle Sam may seem like a good thing. But it actually means that you’ve loaned the government money without earning any interest.

You Lack Purpose in Your Life

Not surprisingly, cash topics to the rich. Indeed, 97% of the rich people surveyed via way of means of U.S. Trust listing their personal economic safety as a pinnacle motivation for constructing their wealth withinside the first place. That’s carefully observed via way of means of the cappotential to find the money for a preferred lifestyle (91%) and the economic safety of family (84%).

But retaining up with the Jones’s isn’t the handiest purpose for collecting a fortune. Indeed, 72% of the rich are prompted via way of means of the preference to assist others thru philanthropy; 58% via way of means of the cappotential to create financial possibility for others; and 44% need to apply their riches to extrade the world.

What you may do approximately it
Entire religions and philosophies are devoted to supporting humans parent out what they may be supposed to do on this life. We might not try and compete with them. But what we can say is which you don’t want to be Bill Gates to make a distinction together along with your cash. Start modestly via way of means of donating to a small organisation with a assignment that aligns together along with your life’s purpose, some thing which could be—rescuing animals, helping the arts, supporting children or feeding the hungry.

A $1,000 donation to a well-run nearby meals financial institution can cross plenty similarly than a $1,000 donation to a huge countrywide charity. As your manner increase, so can also your philanthropy. And in case you discover you do not have coins to spare, donate a while instead.

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