After twelve years in the business you start to see similar characteristics of what makes up the millionaire’s mind. By millionaire I mean someone that is free from financial fear, or what everyone from Ameriprise to Merrill likes to call “financially independent”. In lay terms, this person has reached a state where money is NOT their primary concern. This puts them in a small percentage of the population.
Due to the economic downturn and decline in the stock market, a new mentality toward money is emerging. This mentality, born out of the current recession, contains characteristics similar to the mentality of those individuals that weathered the Great Depression. More importantly, these characteristics are creating a new breed of investors. They are what I like to call: The NexGen Millionaire. This NexGen millionaire have the financial DNA of what it takes to become wealthy. Here are three of their characteristics:
1. Financially the NexGen millionaire is almost anti-materialistic. They have some toys, but only to the extent that they are functional. Function is more important than form. For example, the NexGen millionaire doesn’t use TV as her primary means of entertainment. If she does watch TV, it is more than likely PBS, or some educational program. My guess is that the average hours a week spent watching TV would be dramatically lower than your typical American.
That is not to say that information is not important. Information is of the utmost importance. Not just any information, but only pertinent information to what she wants to know. This is partially why social media such as Twitter, Facebook, and Linked In are so utilized. They provide exactly the information our millionaire wants. More often than not, family and friends are followed on these social media along with their favorite subject. Of these such subjects is personal finance.
2. NexGen millionaires are Financial Responsible, almost to a fault. They see the shortsightedness of the many. In an attempt to balance out the universe, they make most all of their decisions based on long term thinking. This is “almost” to a fault because it could be argued that these frugal personalities may never get to see the fruit of their hard labor if some unforeseen catastrophe were to happens. So while they pay themselves first, live debt free, and almost obsess over the long term thinking of financially responsible habits, they also strive for our third characteristic:
3. Balance – There MUST be a balance between being financially responsible and enjoying Life. This means identifying the things that are most important in her life, and creating plan (with feedback) to ensure she is experiencing them. Like the entrepreneur that is constantly trying to make her business better by working “on” her business rather than just “in” their business, our NexGen millionaire sees the need to work “on” her life rather than just “in” her life. She “gets” the quote by Father Alfred D’ Souza when he says “Happiness is a journey, not a destination”.
In a way, anti-materialism, financial responsibility, and a balanced work and family lifestyle compliment one another. Someone that has the foresight to lead a balanced family and work life may not earn as much as if they were totally career orientated. Yet if they are not material, and financially responsible, they tend to be able to live on less anyway.
Rich Feight is a Fee-Only Certified Financial Planner and founder of IAM FInancial, LLC in Michigan. He is also the author of Thinking Beyond Numbers, the financial planning and investment blog that brings awareness to your financial habits so that you can make good decisions. You can learn more about Rich at IAM FInancial, LLC.