Have you ever asked the
question, how do millionaires manage
their money?
That is what we are going to
talk about in today's video,
how the wealthy manage their
finances.
I have personally become a
millionaire,
so I'm going to share the
exact strategies that I use.
Let's dive right in.
All right,
what are the practical tips
and strategies that
millionaires use to manage
their money?
The first item I want to share
with you, and this is pretty basic,
but it is also pretty
important,
it is to have a spending plan
to know exactly how much money
you really have,
how much money is coming in,
how much money is going out,
and where it is going out to.
In the Millionaire Next Door,
which is an awesome book.
If you haven't read that yet,
I would definitely recommend
it.
But it says that millionaires
track every single penny.
They know where their money is
going.
And to share my strategy on
how I have my spending plan
set up,
I have a Google sheet and then
I also use a free app.
It's called Empower.
So I have all of my expenses
listed out in my Google Sheet
along with all of my different
areas of income.
And then I have a net income
at the bottom of my
spreadsheet so I can see
exactly how much income has
come in and then subtract out
all of my expenses and see
what that leftover is.
And I have this broken down by
months.
So what I do is I use Empower.
I hook all of my financial
accounts to Empower.
That includes all of my
checking accounts,
my savings accounts,
my investment accounts like my
Roth ira,
my traditional ira,
my hsa.
It also has all of my credit
cards in there.
And then I also have the value
of my assets because I own
multiple properties.
I have my properties listed in
there,
and I can choose the value
that I put in for my property
or Empower will go directly to
Zillow and get the value of
the property and put it in
there for me.
And then I also have the value
of my car in there and any
other larger assets that are
going to be worth more than
just some clothes or some
jewelry.
But that way I'm also tracking
my net worth in empower.
When I log into the account,
I can see my net worth right
at the top so I know if it's
going up or if it's going
down.
And it also breaks down each
category so I can see how much
I have on all of my credit
cards together.
I can see how much is in my
savings account,
how much is in my checking,
and I can see all of my
investment accounts together.
It's just a very handy app.
I log into that pretty much
every morning so that I can
keep an eye on my finances.
If Empower is something you
are interested in,
I will leave my referral link
below.
You can click on that link and
set up a free account.
But I just like that because I
can quickly glance at the app
and see where I'm at
financially.
And then I also like to take
all of the transactions that
are in Empower.
So all of the money that I've
spent,
for example,
my utilities or my mortgage
payment,
my HOA payments,
things like that,
I take all of those expenses
and I export those into my
spreadsheet.
So I'm not typing out or
writing down every single
expense that I have.
It's nice because I can just
pull all of those each month
from Empower,
put them into my spreadsheet,
and all of my expenses are
categorized in the categories
that I have in my spreadsheet.
So when I export those,
I can see exactly how much
I've spent each month in each
category,
and then I can make
adjustments as I go along.
So one of the ways
millionaires manage their
money is by looking at their
money.
They know exactly what's
coming in and what's going out
because they are tracking
their money,
they're able to improve their
money situation.
To give you a specific
example,
I had a certain subscription
and I decided to cancel it,
but they billed me one more
time.
So when I logged into Empower,
I saw that transaction
immediately.
So I contacted the company and
asked them to reverse that
charge.
And of course they did that
within a few days.
So I didn't have to worry
about paying that charge
because it was on my credit
card and it was taken care of
before my statement balance
was due.
And another little bonus tip
that I want to share with you
is that I put all of my
expenses that I possibly can
on my credit cards.
I don't know the last time I
used my debit card because if
I do have a fraudulent charge,
it will happen on my credit
card because that's what I'm
actually using out in the
public.
And my credit card company can
take care of that immediately.
My funds are not frozen in my
checking account because if I
used my debit card,
then they would be frozen.
So I just contact the credit
card company,
tell them it's fraudulent,
and they take care of that
immediately.
I don't have to worry about
paying for that charge or
having my money frozen.
And another reason I use my
credit cards for all of my
purchases is because I like
getting reward points.
For every dollar I spend on my
credit card,
I'm getting a certain
percentage back.
And I know a lot of people
say, oh,
if I'm using credit cards,
I'm definitely going to spend
more.
And while that may be true in
some cases,
I'm pretty aware of what I am
spending my money on.
If I don't have the money,
I'm not going to spend it.
Okay, let's move to principle number
two.
And this is strategic saving
and investing.
Being a millionaire,
I definitely prioritize
investing.
I have a small emergency fund
in my savings,
which I keep in a high yield
savings account.
I would definitely recommend
doing that.
I like using Ally.
There are a lot of companies
out there,
but if you just have money
sitting in your savings
account waiting for an
emergency,
then you should be making as
much money off of that money
as possible.
And the reason I keep a
smaller amount in my emergency
fund is because I have access
to cash in other ways.
For example,
I could put an emergency
expense on my credit card and
have cash within about 30
days,
and I can pay that credit card
off without paying any
interest.
And I go into more detail
about this in another video.
So if you are interested in
that, I will leave a link above.
You can check it out later on.
But one of the reasons I was
able to become a millionaire
as quickly as I did was
because I did not have a whole
bunch of money sitting in my
savings account.
Yes, when I was younger,
I did have a lot of money in
my savings account.
I know when I was in my
twenties,
I had at least $54,000
sitting in my savings account,
not doing anything for me.
And since then,
I was able to understand the
power of investing,
the power of compound
interest.
I definitely do not keep as
much money in my savings
account as I used to.
I try to invest as much of my
money as possible as soon as
possible,
and I would've become a
millionaire even sooner had I
had done this even earlier.
But nonetheless,
when I made that switch,
I was able to become a
millionaire.
So if you want to become a
millionaire,
start using these strategies,
start investing as much money
as possible.
And of course you don't want
to lose sleep at night.
You want to feel comfortable
with what's in your savings
account.
But from what I have seen,
you can definitely not retire
or become a millionaire by
just leaving your money
sitting in your savings
account.
And if you are still at that
saving part,
building up your emergency
fund,
one way that you can save
money even easier is to
automate the process.
You can set up an auto
transfer from your checking to
your savings every two weeks
or every month whenever you
are getting paid.
And that way it's
automatically going into your
savings and you don't even
have to think about it.
I gave this tip in one of my
workshops and my friend had
come up to me after and said
she was going to implement
that, and then she sent me a text
months later and she said she
had a significant amount in
her savings,
and there is no way she
would've had that in her
savings had she had not have
set up that auto transfer.
And also,
by being strategic with our
investing,
we can automate our investing
as well.
If that is something you're
interested in doing,
automating your stock market
investing,
I have a free masterclass.
I will leave a link below in
the description.
You can click on that,
check out the free
masterclass.
But that is just another
strategy to use to automate
your investing so that you
don't have to think about it
and you can build your wealth
very, very easily.
Another way that I've been
strategic with my investing is
to stick to what I know.
I invest in the stock market
and in real estate,
and I do buy and hold real
estate.
I went on a podcast quite a
while ago and they were all
about creating their own
businesses and making money
that way.
And they had asked me about
real estate investing,
and they just weren't grasping
the concept of investing in
real estate and having to pay
off a mortgage over time.
If they could build up a
business so quickly,
then why wouldn't they just do
that?
But here's the thing,
we all have our own unique
strengths and we can focus on
those strengths that work for
us.
I know how to invest in real
estate and be successful with
that.
They know how to build
businesses and be successful
with that.
So if you want to become a
millionaire,
make sure that you are
focusing on what you are
really good at.
And if you're thinking,
I'm not really good at
anything right now,
Tiffany,
then pick something and learn
about it and become good at
it.
I didn't just instantly know
about real estate.
I had to learn the
fundamentals and actually
start doing it,
and I became better and better
the more I did it.
But honestly,
if we are good at something,
we can stick with that.
That is how I was able to
become a millionaire.
I stuck with my stock market
investing and I kept that
very, very simple.
It's not that I was day
trading or doing options or
things like that.
I invest in an index fund.
If you want to know which one,
I have another video,
I'll leave a link above.
And then I also invest in a
few different individual
stocks.
So it's very simple,
but it works for me.
And then I invest in buy and
hold real estate.
And then principle number
three on how do millionaires
manage their money?
And this one is debt
management or even leveraging
debt.
If we want to have that
million dollar net worth,
we cannot have a lot of high
interest debt.
We need to make sure that we
are paying off our high
interest to debt and then we
can start investing our money.
I've always been very
conscientious of debt.
I've never paid any interest
on any credit cards.
I've only gone into debt for
cars and houses,
and that is just my own
personal experience.
I know other people that have
had lots of debt,
but once they realized that
they wanted to become a
millionaire or become
financially free,
they paid off that debt and
they were able to still
accomplish their goal.
We all have our unique paths
that we are on,
so we cannot compare ourselves
to other people.
This is just what I have
chosen to do.
And going along with debt
management,
we can also leverage debt.
A lot of millionaires do this.
I've been able to do this as
well because I've invested in
real estate properties,
so I only have to have a
portion of the mortgage to put
down,
and then I can leverage other
people's money I can borrow
from the bank in order to
purchase the home.
This is an amazing way to
build our wealth over time
because we're able to buy a
$600,000
asset for only 20% of the
cost,
and we can do that again and
again and again and continue
to build up to a millionaire
status.
We just want to make sure that
we are not over-leveraging
debt.
When something happened in
2020,
some people were over
leveraged with their debt and
that caused them a lot of
financial stress.
So for me,
I definitely don't want to be
over leveraged.
I've been able to pay off two
of my three mortgages so far,
and I know that a lot of
people say,
well, you can be investing that
money instead of paying that
mortgage off and make more
money.
But since it is my personal
financial life,
I can do what I feel is best
and I wanted to pay off those
two mortgages.
It just helps me have that
peace of mind.
And of course,
I took some risk in purchasing
those properties in the
beginning.
So we do want to take some
sort of risk in order to
become a millionaire.
We can't leave all of our
money sitting in our savings
account,
not taking any risk
whatsoever,
but we can definitely have
that calculated risk.
We can do our homework,
do our research,
and feel comfortable with what
we are investing in and the
amount of risk we are taking
on.
And the fourth item on how
millionaires manage their
money is that they usually
have more than one source of
income.
And this is not always the
case. There are some really high
earners out there that have
become millionaires,
but for me,
I like having my stock market
investments.
I can create a stream of
income from those.
And then also my real estate
properties.
I can create a stream of
income from those investment
properties and then also
having roommates or a roommate
and collecting income that
way.
And another thing I've been
able to do is to write a book,
which I will leave a link to
below in the description.
You can get your own copy.
And this book actually breaks
down how I was able to become
a millionaire,
and we'll give you more
details on how I actually
manage my money.
But this book is just another
source of income that I have.
I also have my business,
so I'm creating income that
way.
But here's what I want to
point out.
I didn't have all of these
streams of income at once.
The first income stream that I
had was a nine to five job.
I was just collecting a
paycheck every two weeks,
and that is where I started.
And then I got into real
estate and started collecting
cash flow from real estate and
continued to expand that part
of my investing.
And then I also have my stock
market.
So I just built one thing on
top of another.
I didn't all of a sudden have
tons of different passive
income streams.
Sometimes when we try to
spread ourselves too thin,
then nothing is really working
out.
If we can focus in on one
area,
get that going really,
really well,
then we can start to add
another area.
And then number five on how
millionaires manage their
money is that they have a
long-term financial plan.
I have created a lot of goals,
and I have a lot of plans for
my life and my money.
If I didn't map out a plan
that I wanted to achieve
financial freedom,
then I never would have done
that.
So it's important that we map
out what we want to achieve.
We want to have a financial
plan.
We want to know where our
money should be going,
and then actually put our
money there.
It makes it a lot easier to
manage your money if you
already have a plan for your
money.
As I was working on becoming a
millionaire and becoming
financially free,
I was very strategic in how I
was going to do this.
I wanted to use the stock
market and use real estate.
So I mapped out my plan on how
I would do that.
And as I was mapping out my
plan,
I knew that I had to keep a
long-term mindset.
That is a key component on
building up your wealth and
managing your money better.
If you are so focused on the
short-term,
you're going to make choices
that align with just
short-term benefits and you're
neglecting the long-term
benefit of becoming a
millionaire.
I knew I wouldn't be able to
build my wealth overnight.
I knew it would take time.
So I mapped out a plan and I
kept that long-term
perspective.
Tell me in the comments below,
are you going to become a
millionaire?
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screen. Thanks so much for watching.
I'll see you in the next
video.