Although ASX millionaires come from a diverse range of backgrounds and industries, there are some simple habits that many of them have in common.
And it's all behaviour that all of us can emulate to improve our finances.
Let's check out five of those millionaire secrets:
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1. Actively managing assets
To grow your wealth you need to actually consciously manage it, rather than just letting it sit idle because it's all too hard.
This might sound obvious, but many Australians do not pay attention to their finances.
This doesn't necessarily mean going to the time and expense of establishing a family trust or a self-managed superannuation fund.
It could be as simple as checking what your superannuation balance is and setting it to an appropriate risk-reward setting. For example, if you're in your 20s, you might want to take it off "cash" and put it into "high growth" mode.
There is also knowing how much and where you have money saved up in your various bank accounts. That'll allow you to figure out how much you could set aside for investing and how much to reserve as backup funds.
2. Manage your tax
It wouldn't surprise you that pretty much every millionaire and billionaire would be smart at minimising their tax obligations.
Again, this doesn't necessarily mean anything complicated like seeking out overseas tax havens.
It could be as simple as having a 30-minute chat with a tax professional. And knowing how much capital gains and losses you have racked up for the financial year. Or contributing to superannuation over other investment channels.
And with ASX shares specifically, there are great devices like franking credits and the capital gains tax discount that you could take advantage of, depending on your circumstances.
3. Plan for your retirement
A recent international survey conducted by DeVere Group showed that 59% of its millionaire clients ranked planning for sufficient retirement funds as a top priority.
Because of rapidly ageing populations in the developed world, DeVere chief executive Nigel Green warned punters they can't count on a safety net.
"In the future, it's unlikely that governments will be in a position to support older people like they have done for previous generations," he said.
"As individuals accumulate wealth, the focus shifts towards preserving and enjoying that wealth during their later years, underscoring a strategic approach to financial longevity."
4. Spend less than you earn
Again, this one seems obvious but we all know plenty of people who immediately burn all the cash they get in their paycheque. Then they spend some more on the credit card.
Millionaires didn't get to where they are by doing that.
They ensured they spend less than they earn so that savings can go towards productive assets, such as ASX shares.
Yes, plenty of wealthy folk have debt. But that leveraging is often to invest in an asset that could pay back the loan plus more over the long run, such as ASX shares or a private business.
5. Think long term
This one's easier said than done.
So many people invest in ASX shares with the best intentions, but end up checking their portfolios everyday and micromanaging it to underperformance.
Successful investors understand the power of compounding over a number of years. And when they buy ASX shares because they think the business will be in better shape in five years, they have the discipline to hold onto the stock for a half-decade.
Millionaires have long-term financial goals in mind. They want their investments to get from point A to B by the time it's year Y.
If you don't set goals, then you will make inappropriate investment choices.
