How to Manage Your Money like a Millionaire

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How do millionaires make their money, especially when they’re so young? And just as important, how on earth do they manage it? What are their secrets, and can we learn from the methods that they apply?

Well, Capgemini Consulting made it a little easier for us with the report in which they reveal young millionaire money management methods. Do you want to know how to manage your money like an under-40 millionaire? Then keep reading for some valuable tips.

Manage Your Money like a Millionaire

Socially responsible investing

Do you think millionaires invest all willy-nilly? They do not, and they don’t just support the causes dear to their hearts through donations, they also invest in them. That way, they make a hefty return, but they also have a clear conscience, knowing that the cause is a good one.

They usually benefit from the help of a financial advisor, who can tell them what to invest in. And the method is not limited to just millionaires. More and more millennials (two thirds) and about a third of generation x-ers were found to be involved in such socially responsible investments.

Dubbed as a “feel good return”, this allows people to invest without guilt, but they should still retain a balance and not invest everything in just one place, which is a good tip if you want to manage your money like these millionaires.

The case for cash

Studies have found that people who spend cash spend around 12%-18% less than their counterparts who use credit cards. But that’s not why millionaires like cash. In fact, the reasons given were diverse:

  • They want to have money ready for investments
  • They want to have easily-accessible disposable income to spend in order to live the way they desire, including shopping, vacations, eating out, etc.
  • They want to have a means to protect themselves financially, in case of a market crash or a changing market

If you’re looking to manage your money like a young millionaire, going with cash cannot steer you wrong, especially if you have a safety cushion to land on in case times get rough.

Real estate investments

Real estate remains the tried and true of investment, because it offers multiple income sources that are more or less steady. While investing in stocks of a major company can pay out really big, it can also be incredibly risky, so maybe that’s not something to emulate when it comes to how you manage your money. Rental income, by comparison, is safe.

Interesting is that these young millionaires seek their friends’ and their families’ help, but also the Internet’s advice, when it comes to financial matters. Baby Boomers, by contrast, were much more likely to trust a professional with their money and their investments in their future.

This is just one of the signs that money management in traditional ways doesn’t fly anymore. A growing number of millionaires (not only the young set) claimed that they would like to receive automatic advice from a robot, per the same report from Capgemini.

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