Here’s what some might consider a hot take: Millionaires are surprisingly relatable, and their path to success can easily be replicated by anyone making an average income.
But most articles highlight financial success stories on Billionaires rather than millionaires.
Here are a few headlines I’ve read recently that Illustrate what I’m talking about.
“Warren Buffett Bought More of These 3 Stocks this year.”
“Mark Cuban says that crypto is ‘going through the lull’ that the early internet saw — here are 3 simple ways to bet on a big bounce.”
“Shark Tank’s Kevin O’Leary breaks down his crypto portfolio and explains how his metaverse bets are based on the economics of Web3.”
The sure-fire sign an article is useless and not worth your time is if they namedrop a famous billionaire in the headline.
Instead of taking money advice from billionaires, you should manage money like a millionaire because you actually have a shot of becoming one.
You’ll never replicate the success of Warren Buffett or Steph Curry
I once wrote that most people learn the wrong lesson from Warren Buffett.
Warren Buffett is considered by many to be one of the greatest investors of all time. Many investors who are eager to become rich hang on Buffet’s every word.
This isn’t a bad thing, as Warren Buffett has a lot of wisdom. But here’s where most people go wrong.
Most people want to try and emulate Buffett’s stock-picking success. This is a fools errand.
When asked to describe his investment philosophy, Buffett once said, “All there is to investing is picking good stocks at good times and staying with them as long as they remain good companies.”
Let’s break that quote down.
Pick good stocks
Have good timing
Sell when they are no longer good companies.
That sounds simple, and to Warren Buffett, maybe it is. But he might be the best ever at picking stocks. Buffett is an extreme outlier.
Buffett’s simple advice on investing is no different than if we asked Steph Curry how he became the best shooter in NBA history, and he said, “Practice every day, work on your form and stay confident.”
It sounds easy, but it glosses over the fact that Buffett (investing) and Curry (shooting) are the GOATs at what they do in part because they work hard, but really, they have more talent than the rest of us will never have.
Even a player talented enough to make it to the NBA will never be able to match Steph Currie’s greatness simply through hard work. They could become Tyler Hero, reigning 6th man of the year in the NBA. He’s Incredibly accomplished but nowhere near the level of Steph Curry.
Being the best of the best requires superhuman levels of talent. We either have it, or we don’t.
You can replicate the success of a millionaire
When it comes to personal finance, there are the Warren BufeBufettsllionaires) and the Tyler Heros (millionaires.)
We can all be a Tyler Hero with money; smart, hard-working, successful, financially free, and largely fly under the radar.
Embrace diversification in your income & investments
The first rule of building wealth from scratch is to get to a point where your income is always greater than your expenses.
That is why most millionaires diversify their human capital by creating multiple income streams.
Having multiple income streams is the only way to ensure that your income never slips below your cost of living—even in a recession. If you have a side hustle that is completely unrelated to your job, you could get laid off and not have to worry about going into debt.
In fact, recessions are where the future wealthy build their wealth. Assets like stocks and real estate become cheap, and those who have enough cash to invest during a recession scoop these assets up at a discount and ride the wealth-building wave during the recovery.
Millionaires diversify their income for the same reason they diversify their investments; to increase the odds of a favorable outcome.
How do you become a millionaire?
Diversify your income, keep increasing the gap between your living expenses and income and invest the difference in a diversified portfolio of appreciating assets.
Do that for long enough, and you’ll become a millionaire.
You won’t become Warren Buffett or Steph Curry, but you’ll have less money stress, and more opportunity to live the life you want.
This article is for informational purposes only. It should not be considered Financial or Legal Advice. Not all information will be accurate. Consult a financial professional before making any major financial decisions
Take Money Advice from Millionaires, Not Billionaires