Wes Moss: 8 secrets of millionaires that might surprise you

“Dad, how do people become millionaires?” It’s a question I’ve gotten many times from my kids. I typically listen to financial talk radio while I’m driving, and “millionaire” or “billionaire” verbiage gets thrown around on a daily basis. Naturally, as kids grow up, they begin to learn about money, and their curiosity turns to the relatively abstract subject of what it takes to build wealth.

The late author of “The Millionaire Next Door,” Thomas Stanley of Atlanta, created an institution around the concept of what it takes to become wealthy. He crafted an image around millionaires that removes the private jets and bottles of Cristal Champagne. He found something that I see firsthand every day: There are multiple paths and seemingly endless formulas to build wealth. I’ve seen teachers, janitors, midlevel corporate managers, salespeople, doctors, lawyers, CEOs and small-business owners alike become millionaires, and all without an inheritance.

Their exact path to wealth may look dramatically different from case to case, but here are eight habits that many of them have in common.

1. They set goals.

Millionaires don’t simply expect to make more money; they plan and work toward their financial goals that they’ve outlined. Millionaires have a clear vision of what they want, and take the steps necessary to get there.

2. They’re steady savers and investors.

The majority of rich retirees began making the maximum contribution to their 401(k)s in their 20s or 30s. Remember, money you put into your 401(k) is pre-tax, which helps to reduce your overall tax burden and adds to your nest egg. Many companies also offer to match a percentage of your contributions, which can be a huge bonus over time.

3. They save their raises.

Many millionaires see a raise as the ability to increase their overall wealth rather than just spend some extra money. While it’s tempting to spend that extra money on a vacation or a new car, I’ve seen that many of these millionaires instead save at least half of their pay raises. Those dollars end up in retirement or brokerage accounts, compounding for a larger return later.

4. They have job stability.

Interestingly enough, millionaires have often stayed with one employer for sometimes 30 or 40 years. Staying with the same company can offer big rewards, including a very nice ending salary, significant pension benefits and hefty 401(k) balances. While we constantly hear about the high rates of employee turnover these days, there are still a number of people who have this kind of job stability, like teachers and other government workers.

5. They’re not afraid to ask for advice.

Most millionaires don’t do their own taxes and aren’t do-it-yourself (DIY) investors. They know what their strengths are, and if their strengths don’t lie in investing, taxes and financial planning, they leave it up to dedicated experts.

6. They’re mortgage free.

A characteristic of the happiest retirees, according to the research for my book, “You Can Retire Sooner Than You Think,” is that they go into retirement without a mortgage or at least know they’ll pay it off within five years. On top of this, the average price of my happiest retirees’ homes was $355,000, proving you don’t need a McMansion to be happy.

7. They don’t indulge in fancy toys.

Millionaires don’t necessarily own BMWs, Mercedes, $3,000 watches, or $5,000 suits. Nearly 40 percent of the “rich” buy their cars used. In fact, many millionaires are conservative with their spending.

8. They have good credit.

The better your FICO score, the lower the interest rates you will pay on your mortgage and car loans. The “rich” do this by carrying low debt loads.

The secrets to becoming a millionaire are not as mysterious as many people think. Small tweaks, goal setting and long-term financial planning can move you closer to that seven-figure number.