Blog Layout

10 Money Mistakes Millionaires Don’t Make

Diane Buchanan • April 17, 2018

So you want to be a millionaire.

Sigh, don’t we all. 

It might feel like a lofty goal but it turns out the underlying principles millionaires follow when it comes to their money are pretty basic. Some of them are downright boring. But they obviously work, so let’s have a look and see what we can learn.

Here’s the 10 money mistakes millionaires don’t make! (say that 5 times fast…)

1. Getting emotional over financial decisions.

Millionaires are cold hearted. The end.

Kidding! I’m kidding…

It’s not that millionaires don’t have emotions when it comes to their finances, they just know how to separate the two. How? By making a plan and automating their money.

Yup, super boring. They take the time to set up a plan for their money—by paying themselves first and automating their savings,investments, and bill payments—so they don’t have to spend time thinking about those things day to day. Having a plan is also what keeps them from freaking out and making irrational decisions when a bear market hits. 

Millionaires know their time and energy is limited and better used elsewhere. 

2. Thinking of themselves as rich.

Wait a minute, if you’re rich isn’t this the point?

Most millionaires—at least the ones that stay millionaires—don’t walk around thinking they’re rich and can afford anything and everything. They know there are trade offs and are frugal in many areas of their lives. Just because they can afford the most expensive car or bottle of wine doesn’t mean they’ll buy it. 

They’re clear on their priorities. They spend in the areas that matter to them and cut costs in the areas that don’t.

3. Focusing on cost over value.

Speaking of frugality… this one’s important. Millionaires don’t get hung up on the cost of something, instead they focus on value. They think long term. 

They’d rather spend a little more upfront now to buy something they won’t have to replace in a few years time. They have a sense of when things are over or under priced and buy accordingly.

Millionaires still love getting a deal like everyone else. 

4. Thinking your salary is the only way to get rich.

Your salary isn’t the be all end all to building wealth. 

Millionaires have multiple income streams. They don’t expect to make their millions from one day job, they understand the importance of diversification and have set up multiple ways to make money. Both active, through a job or businesses, and passive, through the stock market. 

They’re always on the lookout for opportunities and know a salary is just one piece of the puzzle. 

5. Not setting goals.

No eye rolling! Goal setting is incredibly powerful. If you’re dreaming of something that feels impossible or crazy that’s all the more reason to make it a goal. 

Be specific and write it down. Your goal might feel like a longshot but breaking it into measurable steps—a plan—roots it in reality. 

Putting a plan on it is the difference between a wish and a goal. 

6. Getting hung up on timing.

Millionaires know it’s about time, not timing. 

When it comes to investing they know focusing on timing is a waste of energy. They don’t try to time the market or pick stocks, they focus on long term strategies that ride out the ups and downs. 

They know it’s better to have time on your side and that’s why they start investing early. Once again, boring wins. 

7. Thinking wealth is a zero sum game.

You earning more doesn’t mean someone else has to earn less. 

Millionaires tend to have an abundance mindset, they see how finding a way to help more people helps them make more money, and that having more money in turn allows them to help more people. 

Look at famous millionaires you know… how did they make their money? By creating a product or service that was valuable to a lot of people. 

So it’s not about taking away from the pie, it’s about making the pie bigger. 

8. Only looking for ways to save money.

Millionaires can be frugal but they know getting ahead isn’t just about finding ways to cut costs, it’s about finding ways to earn more. 

This one also comes down to the difference between an abundance and scarcity mindset—if they want more money for something millionaires will look for a way to make more money to pay for it rather than solely seeing what other areas they can trim back on. 

Millionaires don’t view money as finite resource, they look for opportunities to make more. 

9. Hiding from their problems. 

When it comes to their money millionaires know how they make it and how they spend it. 

They aren’t ones to bury their heads in the sand. At least not the ones that want to  stay  millionaires. They want to know exactly what’s happening with their money, the good and the bad, because you can only solve problems if you know they exist.

Once you acknowledge something’s not working you can take steps to improve it—and this goes for a lot more than your money. 

10. Thinking it’s about luck.

Short of winning the lottery, millionaires know making and keeping money doesn’t come down to luck. 

Instead of looking at someone with a successful business and thinking,  “They’re just lucky… I could never do that!” they ask, “How did they do that? How can I do that?” They’re curious and want to know how things work so they can put it into practice themselves. 

Millionaires know their wealth isn’t accidental. Their financial success is built on a series of purposeful choices and habits—ones we can all learn something from.

 

 

This article was written by Kate Smalley of Nest Wealth, it was originally published here on July 28, 2017.

 

DIANE BUCHANAN
 Mortgage Broker

LET'S TALK

How To Get The Best Mortgage

By Diane Buchanan • February 19, 2025
If you’re looking to buy a property or have a mortgage up for renewal, and you’re thinking about connecting with your bank directly, save yourself a lot of money and regret by reading this article first. Here are four things that your bank won’t tell you, accompanied by four reasons that explain why working with an independent mortgage professional is in your best interest. Banks have Limited Access to Mortgage Products. Now, while this one may seem pretty straightforward, if you’re dealing with a single institution, they can only offer mortgages from their product catalogue. This means that you’ll be restricted to their qualifications which are usually very narrow. Working with a single institution significantly limits your options, especially if your financial situation isn’t straightforward. In contrast, dealing with an independent mortgage professional, you will have access to products from over 200 lenders, including banks, monoline lenders, credit unions, finance companies, alternative lenders, institutional B lenders, Mortgage Investment Corporations, and private funds. Working with an independent mortgage professional will give you considerably more options to secure a better mortgage. Banks Employ Salespeople, not Mortgage Experts. Banks don’t employ mortgage experts; they employ salespeople. Banks pay and incentivize salespeople to sell their products. There is a fundamental misalignment of values here. If the bank incentivizes a banker to make a profit for the bank, how can they at the same time advocate for you and your best interest? They can’t. Banks don’t have your best interest in mind. In fact, the more money they make off of you, the better it is for their bottom line. However, when you work with an independent mortgage professional, you get the experience of someone who understands the intricacies of mortgage financing and will advocate on your behalf to get you the best mortgage. It’s actually in our best interest to assist you in finding the mortgage with the best terms for you. Once your mortgage completes, we get paid a standardized finder’s fee by the lender for arranging the financing. So although we get paid by the lender, that lender has had to compete with other lenders to earn your business. When you work with an independent mortgage professional, everyone wins. You get the best mortgage available, we get paid a standardized finder’s fee, and the lender gets a new borrower. Banks Rarely Offer You Their Best Terms Upfront. Banks are in the business of making money, and they’re usually pretty good at it. As such, banks will rarely offer you their best terms at the outset of your negotiation. This is especially true if you’re looking to refinance your existing mortgage. With over half of Canadians simply accepting the renewal offer they get sent in the mail without question, banks don’t have to put their best rate forward. Instead, they rely on you to be ignorant of the process and will take advantage of your trust in them. When you work with an independent mortgage professional, we don’t play games with rates and terms. Our goal is always to seek out the lender who has the best mortgage for you from the start of the process, and if there are any negotiations to be had, we handle them for you. There is no reason for us to do otherwise. In fact, the better we do our job, the more likely it is that you’ll be happy with our services and refer your friends and family. Banks Promote Restrictive Mortgage Products. As if it’s not bad enough that banks don’t offer their best terms upfront, they actually promote mortgage products that are restrictive in nature. The fine print in your mortgage contract matters; understanding it is challenging. Banks do what they can to make it hard for you to leave. Now, if you’ve ever heard stories of outrageous penalties being charged, this is what’s called an Interest Rate Differential penalty (IRD). Each lender has its own way of calculating the IRD. Chartered banks are known for their restrictive mortgages and high IRD penalties. When you work with an independent mortgage professional, we take the time to listen to your goals and assess your mortgage needs based on your life circumstances. The best mortgage is the one that lowers your overall cost of borrowing. So not only will we walk through the cost of the mortgage financing, but we’ll also clearly outline the costs incurred should you need to break your mortgage before the end of your term. This might be the deciding factor in choosing the right lender and mortgage for you. Working with an Independent Mortgage Professional is in Your Best Interest. Banks have limitations to the mortgage products they offer. Working with an independent mortgage professional gives you mortgage options! Bankers work for the bank; they are incentivized to make money for the bank. An independent mortgage professional advocates on your behalf to get you the best mortgage available. Banks rarely offer their best terms upfront; they leave negotiations up to you. An independent mortgage professional outlines the best terms from multiple lenders at the start of the process. Banks promote restrictive mortgage products that make it difficult to leave them. An independent mortgage broker will outline all the costs associated with different mortgage products and recommend the mortgage best suited for your needs. So if you’d like to talk about the best mortgage product for you, you’ve come to the right place. Please connect anytime. It would be a pleasure to work with you.

Are You Ready To Buy A Home?

By Diane Buchanan • February 12, 2025
Buying your first home is a big deal. And while you may feel like you’re ready to take that step, here are 4 things that will prove it out. 1. You have at least 5% available for a downpayment. To buy your first home, you need to come up with at least 5% for a downpayment. From there, you’ll be expected to have roughly 1.5% of the purchase price set aside for closing costs. If you’ve saved your downpayment by accumulating your own funds, it means you have a positive cash flow which is a good thing. However, if you don’t quite have enough saved up on your own, but you have a family member who is willing to give you a gift to assist you, that works too. 2. You have established credit. Building a credit score takes some time. Before any lender considers you for mortgage financing, they want to see that you have an established history of repaying the money you’ve already borrowed. Typically two trade lines, for a period of two years, with a minimum amount of $2000, should work! Now, if you’ve had some credit issues in the past, it doesn’t mean you aren’t ready to be a homeowner. However, it might mean a little more planning is required! A co-signor can be considered here as well. 3. You have the income to make your mortgage payments. And then some. If you’re going to borrow money to buy a house, the lender wants to make sure that you have the ability to pay it back. Plus interest. The ideal situation is to have a permanent full-time position where you’re past probation. Now, if you rely on any inconsistent forms of income, having a two-year history is required. A good rule of thumb is to keep the costs of homeownership to under a third of your gross income, leaving you with two-thirds of your income to pay for your life. 4. You’ve discussed mortgage financing with a professional. Buying your first home can be quite a process. With all the information available online, it’s hard to know where to start. While you might feel ready, there are lots of steps to take; way more than can be outlined in a simple article like this one. So if you think you’re ready to buy your first home, the best place to start is with a preapproval! Let's discuss your financial situation, talk through your downpayment options, look at your credit score, assess your income and liabilities, and ultimately see what kind of mortgage you can qualify for to become a homeowner! Please connect anytime; it would be a pleasure to work with you!
Share by: