How to invest like a millionaire and build wealth for retirement – MarketWatch

Over the course of my career, I’ve had the opportunity to work with multiple self-made millionaires. Though they come from varied backgrounds, these investors have a few key habits in common—ones that you can replicate to build wealth to retire comfortably and hit your long-term financial goals.

My wealthiest clients pay themselves first by systematically putting money into savings with no intention of using it for day-to-day living. They’re also experts at reverse budgeting: living lifestyles that are affordable after both long- and short-term savings are in place. But what can you do, aside from the obvious saving, to secure wealth in retirement?

Let’s take a closer look at some of the strategies deployed by my millionaire clients that can help anyone improve their financial wellness in 2022.

1. Create an organized investment plan

Whether it’s in stocks, bonds or exchange-traded funds (ETFs), my wealthiest clients are diligent and organized about investing.

Setting up a monthly or bimonthly automatic transfer of cash from your checking account into an investment account ensures you’ll automatically invest—and learn to live on your post-investment funds. By employing this strategy, my clients find they don’t actually miss having that money in their cash flow, but it’ll be there waiting for them when they need to make a big purchase, travel, or retire.

Be calculated about your investments: how much risk are you willing to take on, and in what time frame do you need access to your money? My younger clients can take on a little more risk in exchange for significant yields. My older clients often feel more reluctant to take on risk, as they need access to their retirement funds sooner.

Having a solid grasp on their current financial situation, and their future needs, is a hallmark of my millionaire clients. And as a rule of thumb, they aim to save roughly 20% of their monthly income for savings, emergency funds, retirement and investments.

2. Take advantage of all employer benefits

Millionaires don’t leave money on the table. My wealthiest clients know to take full advantage of employer-offered benefits—and you should, too.

  • Employer retirement match: If your employer offers a 401(k) match, contribute enough money each paycheck to max out that match. This is basically “free” money for you to take advantage of in retirement.

  • Employer life or disability insurance: Your employer’s group plans can offer significant savings over buying these insurance policies on the market.