Herrand Associates Wealth Management Singapore, Tokyo Japan on How to invest Like a Millionaire (When you’re Not One)

Herrand Associates Wealth Management Singapore, Tokyo Japan on How
to invest Like a Millionaire (When you’re Not One)

Lots of people dream of becoming a millionaire, but few
actually know what it takes to get there. Most millionaires
weren’t handed their wealth, and few stumbled upon it by
luck. A mere 20 percent of them inherited their money,
according to Thomas J. Stanley's book The Millionaire Next
Door. The conclusion? The majority of millionaires are self-
made.

So, if you want to be a member of that elite group, exactly
how do you make a million bucks? The truth is, there’s no
secret handbook for millionaires. Most of them follow typical
investing best practices. But you do need to be smart with
your finances, so do your research and invest strategically.

Stanley, author of the "millionaire" book, also believes that attitude is a contributing factor. “One of the reasons that
millionaires are economically successful is that they think differently,” he writes.

Ready to start thinking differently and invest smartly, to make your own million? Here are four tips to help you get there:

1. Be conservative.

When you picture today’s millionaires, do you imagine them recklessly gambling with their money and buying and selling
stocks at the drop of a hat? Actually, the opposite is true. Most millionaires are very conservative with their money. They
are focused more on avoiding risk than on the potential gain they might make from an investment.

Millionaires know that being cautious with their money will ensure they retain and slowly grow their wealth. Too big of a
risk, and everything could be lost all at once. But that doesn’t mean millionaires don’t take any risks. “If you embrace risk
at the right time, you can actually reduce it over the long term,” Spencer Jakab, author of Heads I Win, Tails I Win, in an
article for TIME.

Don’t be blindsided by the possibility of a large reward when you choose an investment. Avoid investments that are too
risky, and be strategic with the investments you do make.

2. Diversify your investments.

One of the biggest investment mistakes you can make is to bet all your money on one horse. Millionaires know that to
avoid risk, they need to have a diverse portfolio. That way, they aren’t relying on one company. If one of the companies
they’ve invested in takes a hit, they won’t lose everything.

According to a study by Spectrem Group, millionaires invest 44 percent of their assets in stocks. This is typically how most
millionaires make their money. They’re strategic in which stocks they buy and how they build their portfolio. They tend to
favor low-risk stocks and invest in both foreign and domestic companies.

The younger an investor you are, the riskier investments you can make. As you get older, you’ll want to lower the amount
of risk associated with each investment you make, to ensure your finances are stable for the long term.

Millionaires also invest much of their wealth in real estate. With the right property, you can stand to make a lot of cash.
Whether you decide to flip houses or look for rental properties, real estate is a potentially lucrative investment
opportunity.

3. Minimize fees and costs.

In an interview with Bloomberg, Warren Buffett, CEO of Berkshire Hathaway, said, “Success in investing doesn't correlate
with I.Q. once you're above the level of 25. Once you have ordinary intelligence, what you need is the temperament to
control the urges that get other people into trouble in investing.”

Successful investors don’t have to be the smartest financial minds. But they do know what to do to hold on to their wealth.
The U.S. Trust survey found that 90 percent of participating millionaires believed that the best investment strategy is the
"buy-and-hold" approach.

By holding on to their investments, millionaires maximize their returns. They keep their transaction costs and other fees
to a minimum to ensure the highest possible return.

4. Seek out advice.

No man is an island, and neither, it seems, are millionaires. Not all millionaires are investment experts, and many of them
choose to seek out help with their portfolios. Spectrum Group finds that two-thirds of millionaires consult with an advisor.

Millionaires know they don’t need to have all the answers or do intense research on each and every investment. They leave
that work to their advisor. But they don’t rely on their advisors completely. They are aware of the market, their
investments and what’s going on. They are involved in the management of their portfolio but know when to seek guidance.