How to Become a High Net worth Individuals
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Lately, I managed to get an audio course for a popular book; the Millionaire Next Door. This is a popular financial book. So I quickly spent my first week listening to the tape and learn from it.
The Millionaire next Door is a good learning material about wealth and wealthy people. The most amazing part of this audio course is it provides all kind of statistic and facts to discuss the spending habits, money mindsets and money behavior of the wealthy people. The course also shows us that most of the wealthy people looked ordinary and normal. However, the people who owned fancy car and biggest house, in reality are broke! They just look like a wealthy people and they are also the one who suffers from money problems.
Currently I almost finished 60% of the audio course and I get a big message that we should concentrate on our wealth instead of how much we make and earn or how many fancy materials we have. There are a lot of benefits becoming a wealthy people. So I quickly did some research on building wealth and I found a new terms for my mind – High Net worth Individual (HNWI).
What is High Net worth Individuals?
We all heard about millionaires, billionaires, rich people and their exotic lifestyles. However, recently, the term “High Net worth Individuals” is being used frequently to describe a person whose net worth is more than $1 million. This figure does not include the first piece of real estate owned by individual.
Needless to say, HNWIs know something about making money, managing money and growing their wealth. In fact, they accumulate their first million by sticking to some simple rules and formula. If you do the same thing, you also can become a High Net worth individual.
The Benefits of Being a High Net worth individual
We knew that HNWI is someone who is wealthy. However, do you know the benefits of being wealthy? Let us start a discussion over here:
- Reduce the worry of life. Let’s face it. Money is the biggest worry of most people in their life. They worry about not enough money, worry about being in debt and bankrupt, worry about their retirement, children’s education fees etc. A HNWI doesn’t have this kind of worries. Even when something happens to the local economic or their income source, they still have millions dollar to survive. Yet, for most ordinary people, a downsizing already deeply affects their lives.
- Live Healthily. According to my observation on my wealthy customers from my offline business, they are living healthily. The main reason why they live healthily because they don’t have financial worries, which is the biggest worry in our life. When people live without worry, they will be healthy. Worry causes stress. Stress induced illness is the leading cause of hospitalizations in modern times. 90% of all hospitalizations are stress related in the USA. Once we stabilize our financial, most of the problems in our life will be greatly reduced, so as our worries and stress.
- Live Happily. Besides living healthily, my wealthy customers also live happily. The main reasons are because they are always ready to help people with their money and also their free time. Of course the most basic reason is because, again, they don’t have the biggest worry of life – lack of money. So they can live happily because they have more choices than others.
In fact, there are a lot of benefits of being wealthy. However, as you can see, almost all the benefits I listed above is about our emotion and also spiritual. I believe that the biggest advantage of being wealthy is it can release most of the emotion pains from your daily life. If someone released from emotions pains, he/she can really enjoy their life. This is the main reason why I want to become a HNWI too.
How to become a High Net worth Individual
Before we start, you must understand something about wealth:
- Wealth is not about how much you make but about how much you keep from your income every month. If you make 1 million and spend it all, then you are still below average and living paycheck to paycheck.
- Wealth is something that must be accumulated slowly and consistently. There is no fast track to build wealth.
- Wealth is measured in terms of TIME. It is about how many years you can survive if you don’t have any income.
- Wealth is nothing related to your intelligence, degree but about your lifestyle, financial planning, mindset and the ability to live below your means to accumulate it. In a nutshell, it is about your self-discipline.
Now, here are the steps to accumulate wealth and become High Net worth Individual:
- Live frugally. Yes it might be sad to say that we have to live below our means. This is the most basic step for most of the HNWI accumulate their wealth. I don’t think that you will be wealthy if you spend all and most of your money.
- Spend According to your ability. I found that most of the wealthy people spend according to their ability. They never overdraft to buy something. Instead they always leave some reserve before spending any money. For example, if their monthly income is $10000, then they only limit their spending around $6000 and reserve $4000.
- Allocate time, money and energy efficiently. According to the audio course, most of the wealthy people are good in planning. They can use their time, money and energy efficiently. They simply know the way to use most of their time to make more money and also for financial planning. They know the way to use their money so that they can accumulate wealth and of course they know how to use their energy in planning.
- Believe financial independence is the most important. This is about your willingness to sacrifice to achieve something. You have to live frugally, you have to limit your spending habits, you have to plan a budget and spend accordingly, you have to do a lot of things to accumulate wealthy. To some people, this is really tough and this is also why so many people are not wealthy. So you must believe that financial independence is the most important thing in your life. So you will work hard to achieve it.
- Start a business. According to the audio course, most of the wealthy people have a business that generates income for them. If you have a job right now, don’t worry, you can always start a part-time business. Then you have double income and double your speed to accumulate wealth.
- Learn how to invest. If you want to accumulate wealth, you have no choice but have to learn how to invest. In fact, all the millionaires discussed in the audio course know how to invest and most of them make their own decision in investment. Different from others, to them, a broker or investment expert is just an advisor to them while others fully counting on them to invest.
Conclusion
According to some reports, without social security, ½ of American will live poverty. This is a problem because most of the Americans are not wealthy. We never hope our life end up like this, do we? So let’s set a goal to become High Net worth Individual together! I found an interesting tool from CNN money where your net worth ranked base on your age and income. You can give it a try here.
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