There are generally two ways to become a millionaire. You can either get the money from someone else (through, say, an inheritance or a lottery), or … you can make it on your own. The latter is more challenging, naturally, but self-made millionaires are actually more common than millionaires who lucked into their wealth. In fact, according to a recent Northwestern Mutual study, 79% of American millionaire consider themselves to be self-made.
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These self-made millionaires, in most cases, didn’t just randomly wake up to seven figures in their bank account. Typically, they labored long and hard to amass that net worth and had challenges and questions along the way. So, what do self-made millionaires wish they’d known earlier? GOBankingRates consulted a number of people who built substantial wealth on their own, in addition to people who work with self-made millionaires, to get some answers.
Work Smart — Not Just Hard
In today’s society, it is heard over and over about the importance of working hard. Undoubtedly self-made millionaires have to do this, but they also have to work smart and lead a balanced life.
“[I] took pride in the ‘hustle mentality,'” said Jeff Rose, a certified financial planner, founder of Good Financial Cents and a self-made millionaire. “Grinding out late hours and weekends to get ahead. That worked like magic in the beginning until it didn’t because I got burned out. I finally figured out I could surround myself with key people that could grow my business and wealth exponentially, leveraging their skills, while staying in my lane to focus on my unique abilities.”
The Power of Compound Interest
Some self-made millionaires may wish they’d known about the profound effect of compound interest earlier in their savings journey.
“If started early, even modest savings can grow exponentially over time,” said Andrew Latham, certified financial planner and the managing editor of SuperMoney. “For those beginning their financial journey, starting to invest, even with small amounts, can set a foundation that reaps substantial benefits in the long run.”
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The Value of Time Over Money
Who of us wouldn’t want to get rich quick? Tempting as it is to hunt down big paydays and easy gains, it’s important to focus on long-term money making endeavors. In other words, prioritize time –a move that will help “aspiring millionaires make more strategic, future-focused decisions.”
Emotional Intelligence (EQ) is as Crucial as IQ
Being of high mental intelligence is wonderful, but it’s not the only trait needed to become a self-made millionaire.
“Relationships, networking and understanding human behavior can be as crucial to financial success as raw intelligence or technical skills,” Latham said. “Enhancing emotional intelligence (EQ) can facilitate better business partnerships, customer relationships and workplace dynamics.”
Diversification isn’t Just a Buzzword
Saving and investing won’t cut it on your path to becoming a self-made millionaire. You need to diversify your investments across different sectors and asset types to keep your money safe.
“This approach reduces the impact of any single failure and offers multiple pathways to success,” Latham said.
Continuous Learning and Adaptability
As the rapid advent of AI has shown us, the world changes rapidly. It’s important to stay on your toes and learn new technologies among other skills.
“The ability to continuously learn, unlearn, and adapt is vital,” Latham said. “By staying curious and versatile, upcoming entrepreneurs can pivot their strategies based on contemporary needs and trends.”
Get a Mentor
“I wish I knew what a mentor can bring to the table,” said Ronald Osborne, a self-made millionaire and business coach. “Knowing what I know now, I would have found a mentor earlier on my entrepreneurial journey. Although I achieved business success early, becoming a millionaire at just 27 years old, a mentor would have steered me along the path to success more easily. Others can learn from this by finding mentors who have already reached the goals they aspire to. Using the knowledge a business mentor brings to the table can shorten the path to success, help them circumvent pain points and make more informed decisions.”
Limit the Small Talk
Small talk is an integral part of the way we communicate with one another, but to go back to the point that time is money, it’s critical to prioritize enriching conversation with friends and colleagues.
“I think the most important thing I learned about becoming a millionaire is that my conversations will be different,” said Dr. Sonja Stribling, a self-made millionaire and founder of the Born to Be Powerful Academy and Kitchen Table CEO at Kitchen Table CEO. “Along with cutting out small talk in my life, I’m very cognizant of the rooms I want to be in, I don’t just go in every room as they appear, I’m now reflecting on how this room can serve me and how I can serve it.”
Understanding Failure as Feedback
Failing is easy to do but can be hard to take in stride. Learn from your failures instead of being dejected by them if you want your path to becoming a self-made millionaire to go more smoothly.
“Instead of viewing failures as setbacks, they can be seen as feedback mechanisms,” Latham said. “Every setback offers a lesson. Embracing this mindset not only helps in personal growth but also in risk-taking, a crucial element in entrepreneurial ventures.”
The Importance of Self-Care
Remember that wealth isn’t the only fortune this world offers. Health is just as, if not more, important.
“Wealth isn’t just about bank balances; it’s about overall well-being,” Latham said. “Burnout can be a significant impediment. Regular breaks, physical health, mental well-being, and hobbies can refresh and refuel the mind, leading to clearer decision-making and sustained effort.”
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This article originally appeared on GOBankingRates.com: What 4 Self-Made Millionaires Wish They Knew Earlier
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