Make Money Like A Rich Person
Knowing how the 1% got that way can help point you in their direction.
Visit the Wild West
Six of 10 multimillionaires say "taking some risk" was key to building their wealth, reports Spectrem, a wealth research firm.
One high-risk investment with potentially big gains, says planner Chris Cordaro: so-called frontier markets, like Vietnam, Sri Lanka, and Kazakhstan. "They have the valuations and growth potential that emerging markets used to," says Cordaro.
To gain entry, go with an ETF like Guggenheim Frontier Markets (FRN) with big bets on Chile, Egypt, and Colombia and smaller stakes in places like Lebanon and Kazakhstan where it's difficult for Americans to invest. Plus, it's cheap, charging just 0.7% of assets.
Read More Link On Right
Scout out deals
"Most millionaires are coupon clippers," says Thomas Stanley, co-author of The Millionaire Next Door. They're also deliberate vs. recreational shoppers using a detailed list to save time and money.
"The more time you spend in a store, the more you're likely to spend," says Stanley.
Indeed, 72% of those with a net worth between $5 million and $25 million indicated that frugality was one of the top five reasons for the wealth they'd built.
So don't be above hunting for discounts in the bargain racks, waiting for sales before you buy, claiming loyalty-card rewards, and generally looking for ways to save a buck rather than paying full price.
Readers weigh in: Be like Buffett
"I follow Warren Buffett's advice: Be fearful when others are greedy, and greedy when others are fearful. It's a reminder that down days are buying opportunities and nothing goes up forever." -- Brian Frain, Milwaukee, Wisc.
Millionaires tend to live in their homes for a very long time (about half of them for more than 20 years), hold their stocks for long periods, and even stay married longer (only 4% are divorced or separated).
The reward of sticking with it: You don't lose money to transaction costs and you ride out market slumps, so in the end all of your investments typically pay off.
Embrace your humble abode
There are three times more millionaires living in homes valued under $300,000 than are living in houses worth $1 million or more. Smart approach.
Historically, stocks have handily beaten the returns on real estate and lately, prices on smaller homes have held up better than larger ones.
Be your own boss
Wealthy households are more likely than others to be headed by a business owner, according to the Kauffman Foundation for Entrepreneurial Leadership.
A turnkey approach to ownership: Buy a franchise. These four that follow have a relatively low cost of entry and won high marks for their financial prospects and franchisee satisfaction in a 2011 Franchise Business Review survey:
HEAVEN'S BEST CARPET & UPHOLSTERY CLEANING
The business: The company is now in 1,500 towns and cities because of its popular quick-dry cleaning technique.
Investment: $29,000 to $64,000
PADGETT BUSINESS SERVICES
The business: Specializing in tax and payroll services for small businesses, this is a good fit for corporate refugees.
The business: This commercial lawn maintenance company will train those with no background in the industry.
Investment: $50,000 to $75,000
The business: Franchisees of this provider of non-medical home care to seniors and other adults average $10,000 to $50,000 in first-year revenue.
Investment: $60,000 to $80,000