Self-made millionaire assessment guide

Self-made millionaire assessment guide

Courtesy of this article, there are apparently seven habits most self-made millionaires employ to build their wealth.

From the study conducted, there are two types of self-made millionaires:  Risk-Takers and Savers.

Builders, entrepreneurs, and aggressive investors (in stocks or real estate for example) fall into the Risk-Taker category.  Risk-Takers can be rewarded for their risks, often accelerating and surpassing the other self-made-millionaire-status category:  Savers.

Savers are more risk-averse.  Savers are typically employed and have a modest standard of living.  Their path to wealth arrives usually from their slow-and-steady approach to investing.

Millennial Investing

In reviewing this article, I quickly recognized my category (Saver) and took stock to assess what habits my wife and I have embraced.  Let me know your thoughts in a comment below.

  1. They establish savings goals early in their lives

I’m not convinced doing this in my 30s was early by any means but this is something my wife and I have been practicing for many years now.  The article suggests “with your first paycheck, get into the habit of saving something — 10% or 5% or even just 1%. The point is to set some savings goal and stick with it.”

You can see how we budget here.

You can also read about our latest financial goals here.

  1. They are frugal

We consistently look for value for money on our purchases.  That doesn’t mean we’re cheap but rather we are quite selective in how and when we spend our money.

Here is an example in this article – how we save but also splurge on vacations.

(We just did the same thing in Portugal for two weeks, some frugality so we could splurge…future post to come.)

From the article: “being frugal will not make you rich, but it does mean you will keep more of your money as your purchases are driven by quality and price.”

Then again, if you want to be a cheapass there are many ways to do so.

  1. They avoid lifestyle creep

We could certainly afford nicer cars, nicer things around the house but we don’t give in to that.  Over the years, we haven’t increased our standard of living to match any salary increases – we put that money in the bank instead.  We do this because we know more “stuff” doesn’t make us happy.  We strive to strike a balance between spending cash today and socking away cash for our future.

  1. They make their money invisible

This is arguably the most powerful wealth-building tool there is:  making savings for investment purposes automatic so you never get a chance to spend any money.  I’ve been doing this for decades and it’s phenomenal the power that automating your savings can do for you.

  1. They keep their expenses low

I wish I knew then what I know now but discussions about the cost of pricey financial products, and how they can kill your portfolio, wasn’t mainstream twenty years ago (when I started to invest.)  The investment world didn’t want you to know it’s dirty secret.  Today, there are no excuses.  Dozens if not hundreds of websites and articles all proclaim the same thing:  high money management fees will not help you grow your portfolio.

This means for most investors who want to avoid any form of stock picking, they should consider owning low-cost Exchange Traded Funds (ETFs) to help grow their wealth.  Given the vast menu of ETFs out there, I believe there is absolutely no reason why you should be paying more than 1% in money management fees per year to run your portfolio.

Don’t know what ETFs to own?  Read up on these articles here.

Don’t want the stress of managing your own portfolio?  I encourage you to consider hassle-free investing thanks to my partnership with a leading robo-advisor firm here.

Still nervous about any fintech firm?  Want to stay with your big bank?  OK, well, I can save you money if you use these promo codes here.

  1. They avoid spendthrift friends

Maybe it’s more of a subconscious choice (?) but we have very few spendthrift friends.  Most if not all our friends understand the value and benefits of consistently living below your means and putting money away for their financial future.

  1. They marry well

I’m very fortunate my wife shares many of the same money values as I do:  save for tomorrow but also live for today.   She does encourage me to index invest more, for extra portfolio diversification and to help simplify things for her if something should happen to me *gasp* so I’m trying to do that over time.


My wife and I have reached self-made millionaire status because we have been Savers.  The path has been slow and long; it has required patience but we’ve also made some of our own breaks.  We’ve worked hard to establish our careers.  In the process, we managed to save a good portion of our income for investing purposes.  We live within our means.  It’s not a glamourous lifestyle but one of balance we enjoy.

What self-made millionaire path are you following?  What do you make of my assessment?  All comments and feedback are welcome.

My name is Mark Seed - the founder, editor and owner of My Own Advisor. As my own DIY financial advisor, I'm looking to start semi-retirement soon, sooner than most. Find out how, what I did, and what you can learn to tailor your own financial independence path. Join the newsletter read by thousands each day, always FREE.

28 Responses to "Self-made millionaire assessment guide"

  1. Great post Mark. Can’t agree more about what makes a millionaire. I can’t help but notice that almost all the traits are behavioural; nothing in there about ETFs vs. Mutual funds or whether to invest in this stock or that. Although it’s not sexy, the behaviours listed win the day, whether you’re a white middle aged male or not. To play the victim when it comes to finances does not change a person’s situation. Get up each day, set yourself up for success by stacking the deck in terms of your behaviours, and be patient. It takes time. I’m at a net worth of around $500,000 and it’s so easy to get impatient and want to turbo charge things or to play poor me and do something dumb. Slow and steady wins the race is a cliche for a reason…because though not always true, it often is!

    1. Thanks Matt. Yes, behaviours rule the day, in money management or in relationships or at work for long-term success.

      Continued success on growing your portfolio. Cheers!

  2. ” She does encourage me to index invest more, for extra portfolio diversification and to help simplify things for her if something should happen to me *gasp* so I’m trying to do that over time.”

    Glad to see I am not the only one “sleeping with the enemy” 😉

  3. I’m definitely currently in the saver category, but not by choice. I’m naturally an aggressive risk-taker, but I had to learn the hard way that its less stressful and easier (on family in particular) if I practiced my risk taking strategies after I have reached a comfortable level of wealth via savings. To say the least, I still have quite a-ways to go before I can fully enjoy the risk-taking and loving streak in me.

  4. I will use a page of Rich Dad Poor Dad and highlight that you should only look at income-producing assets for your millionaire status and therefore, your home should not be included. You cannot use your home as savings and your home should not be part of a retirement plan.

    There is one point missing in the list in my opinion and it is the understanding of having your money work for you. Be it that you invest it, start a small business, or do real-estate, the self-made millionaire will have their money work for them and understand how to do effective leverage.

    1. As always I feel it not the size of the pile, but the amount of Income ones pile generates! Once the Income is above ones needs, you can begin to relax and hopefully the Income continues to grow whether the pile does or not.

    2. Well, I’m certainly not a millionaire by just straight invested assets….but I’m/we’re working on it.

      We do however consider our home an asset but I get your point – you have to live somewhere.

      Leverage is important but money working for you in general is more important I think – meaning – wouldn’t it be ideal to be debt-free millionaire?

  5. Read the article…pretty generic MOR advice we read all the time.
    I do have a beef with some points. Let’s examine some of the figures:

    The ultimate goal, if you want to become a self-made millionaire, is to save 20% or more or your net pay…
    Yeah. Median Canadian net income (individual) is ~$31,000. That’s saving $6,200/yr. As we will see, you better escape the median income trap into that upper earnings echelon if you want to be rich.

    Saving just $250 a month over 40 years will produce $500,362 at a 5% return.
    40 years?!?!? Hasn’t this guy heard of FIRE?!?! Working for 40 years is like 35 years way too much working for The Man!!!

    Don’t spend more than 25% of your monthly net pay on housing.
    You’re paying $645/mo on all housing costs. At least half of you will never buy a house (good luck trying to save up for a downpayment) and will always be renting…most likely with roommates. Oh, and forget living in any of Canada’s five largest cities…unless you and your roomies like sharing that one bedroom.

    Don’t spend more than 15% of your net monthly pay on food.
    Again, that’s $390/month…or less than $100/week for food. Good luck staying healthy eating KD, white bread, and bologna. Perhaps in the US a person could pull it off, but not in Canada.

    Stay away from accumulating credit card debt. If you are using credit cards to meet your living and household expenses, by definition you are living above your means.
    As we’ve seen from the rise in both HELOC and CC balances, that’s exactly what Canadians are doing. But I’m suspecting that’s because we need to spend far more than 15% of our income on food and far more than 25% on housing…so we are using debt not to live above our means but merely to keep them from plummeting! Well, at least for those 50% of us who are median (and below) earners. We are told to “live below our means”…does that mean median income earners have to start living a life which closer resembles poverty?!

    Read his ‘Rich Habits’ data and you’ll see what the one true “habit” of being a North American millionaire: white middle-aged male.
    If you aren’t that, then you have a lot of ground to make up. Good luck to all.

    1. You are absolutely right. I always feel that having a decent job paying a decent salary is the most important part of any financial plan.

      But I do think 15% of net income for food is pretty good. We spend around $1000 per month for a family of five and I feel we are eating pretty well.

    2. I don’t necessarily believe in the “you must pay X for food” or rent or other. Simply focus on spending less than you make and ensuring the difference is invested in assets that will deliver growth or more income over time. It’s simple formula really but difficult for most to sustain.

      “Stay away from accumulating credit card debt. If you are using credit cards to meet your living and household expenses, by definition you are living above your means.” Indeed, and it’s getting worse in Canada. Another rate hike would have proven that this week but it did not happen.

    3. @SST As a “white” handicapped female that retired from full time employment at age 45, I disagree with your last statement. I personally feel it reads like you are offering excuses for not trying. I started saving for retirement with my first paycheque. I learnt everything I could about investing in the stock market and trusted my education. I also have faithfully taken one international and one Canadian vacation every year. When not traveling, I make it a point to balance my life between physical and mental excercizing, and socializing. I may not be a millionaire, but I have the lifestyle I dreamed about.

  6. My path to millionaire status (achieved it last year) was a combination of both being a saver and risk taker. I was a saver first then a risk taker.

    For me to have the money to take risk and invest in real estate and stocks, I had to have quite a bit of savings. Without my savings, I would not had been able to leverage my money to purchase rental properties.

    In addition, without my savings and home equity, I would be able to build a seven figure stock portfolio.

    The key ingredients to achieving my millionaire status are saving diligently, investing wisely and take calculated risks. The last one is important because you don’t want to over extend your finances and get burned because you are biting more than you can chew.

    Millionaire status is achievable. The question is, “how hard are you willing to work for it?”

    1. Interesting evolution – I guess I haven’t gone past “Saver” status really.

      I could see that: re: “For me to have the money to take risk and invest in real estate and stocks, I had to have quite a bit of savings. Without my savings, I would not had been able to leverage my money to purchase rental properties.”

      So what is the longer term plan for you Leo?

      1. Hey Mark,

        My long-term goal is to reach my $2M net worth. By the end of this year, I should be at $1.3M. At this pace, I am about seven years from FIRE.

        I am at a stage where I have a great balance in real estate and stock investments. Once your net worth hits the seven figure, it’s not that hard to increase your net worth by six figures on an annual basis. You only need about an 8% return on your net worth and add your savings on top. There’s your six figure increase.

        It’s not easy to balance your full time work, investments, landlord duties and side hustles. However, I am more than willing to trade in a couple more years of hard work for my financial freedom for the rest of my life.

  7. I was the risk taker that worked hard. Was the only one that believed I could make it – to be a millionaire. (until I met my wife). Both wife and I had nothing from the start and came from families that could not help us in anyway. In fact I really did not have a family and was on my own at age 15. Went through some ups and downs where on 2 occasions we lost almost everything. But always had each other. When things were good, we spent money like nothing. When things were bad, we became frugal. Today, we live somewhat – slightly frugal but do not have to (our choice). I am a thinker and planner and follow a blue print. I love the thrill of risk and its made my life exciting – so I continue. But, today we have a very solid foundation of assets we never put at risk. (we made it). However, I do have $$ set aside for me to do what I do – that is make more money to add to the foundation of assets we keep.
    So what continues to drive me? I have an anxiety of not having enough money (although I know i do). I believe it stems from the fact that at age 15 – I went 5 days with no food and lived on drinking water from a fountain. I told myself – I would never be hungry again.

    1. On your own from age 15? Geez. No doubt being a “thinker and planner” has helped you Mike.

      I also worry about not having enough to provide for us in our financial future, which is why I continue to believe we need to save $1 M in addition to having no debt; own our home; and have some workplace pensions to rely on (in addition to CPP and OAS payments – whatever they will be at the time). I will also always work at something, this blog, writing in general, other as to earn income once our $1 M portfolio goal is reached. Active body and active mind should help me long-term with my health. Thanks for sharing your self-made journey.

    2. @mike — reading your story is like looking into a funhouse mirror — I can see my myself in it but it’s a different kind of reflection. I knew there was a reason I liked your style!

      “I was the risk taker that worked hard.” — Yup, and still do. Risk seems to be a four letter word for many people, but if you work hard and work smart you can mitigate a lot of that perceived risk.

      “I love the thrill of risk and its made my life exciting – so I continue.” — Yup. I’ll also add that being involved with risk, as well as the wins and losses which come with it (in any walk of life), have great lessons to teach those who are observant and astute. I’ve learned far more taking investment risks than if I would have just following a preset menu as put forth in the article et al. Seeking risk also makes us look at different situations as well as situations differently than those who seek safety.

      “So what continues to drive me? I have an anxiety of not having enough money (although I know i do).” — Yup, again, but on slightly different foundations. Would be interesting to find out who has more money, those millionaires who wanted to be rich (they want to make money), or those millionaires who didn’t want to be poor (they need to make money).

      1. Thanks for the comments Mark & SST. Managing risk is not for everyone, but what some think is risk may not be a risk to me. People lack the time & smarts to lower a risk and form a better understanding. The good news is you can make the time (to investigate) and gain the smarts to lower risk. Some people think investing in stocks is a risk. I guess it is if you don’t know what your investing in. SST is correct – I never want to be poor ever again. It was painful, lonely and dead end. There was no help, family or life. I had no dreams – I had to learn how to survive. Risk was all around me at a young age. There is no amount of risk today that can relate to the amount of risk I have had to deal with from age 8 – 25. in fact, life is full of risks and we all have the same risk of running out of money before we die. So – again – what some people think is a risk – may not be a risk to me. Don’t settle on 4-5% returns when there is little risk in making much more.

        1. I believe Mike there is risk in everything but when it comes to investing in particular, some folks have a hard time understanding what that means and how to develop a decent financial plan with that in mind.

          It certainly sounds like you’ve come out of a dark space and done well for yourself, understanding risk has been an important part of that journey for you.


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