10 Frugal Living Habits of Middle-Class Millionaires, According to Expert Austin Williams

According to Austin Williams, there are two types of millionaires: entrepreneurs and middle-class millionaires.

Entrepreneurs take huge risks trying to get startup businesses off the ground. They work 100-hour weeks, pouring their blood, sweat, and tears into trying to create something from nothing.

It can make an effective path to wealth — but it’s not for everyone. In fact, most people feel far more comfortable working a stable job.

Fortunately, you can still become a millionaire by working a middle-class job. Williams points to these habits to get you there.

The source of your future wealth isn’t a lottery ticket, inheritance or selling a business for $100 million. It’s your savings rate, right now.

The gap between what you spend and what you earn determines how much wealth you build. If you want to become a middle-class millionaire, you need to decrease your spending and increase your savings rate, to save and invest more of your paycheck.

Continuing that theme, middle-class millionaires don’t chase consumerism. They don’t flash status symbols at every opportunity. Instead, they focus on enjoying a modest, middle-class lifestyle.

This is the paradox of wealth: The more money you blow on looking wealthy, the less money goes toward actually building your wealth. Real wealth exists on paper, not in clothing or jewelry, and certainly not in your car.

Cars offer a prime example of a depreciating asset. Most lose 20% of their value in the first year alone, according to Kelley Blue Book.

Choose an affordable, reliable car. Not only do you save money on the monthly payment, but you also save money on maintenance, repairs, insurance, and gas.

You must make your savings your first priority if you want to become rich.

It should be the first “expense” that comes out of each paycheck. You don’t get to raid it just because you see a new pair of shoes you like. But you can, and should, save up for the purchases you want to make.

Along those lines, don’t buy anything on a credit card that you can’t pay off in the same month.

Save up for purchases in advance, and buy them with your own money.

As an employee, you have access to some benefits that entrepreneurs don’t necessarily have.

Take full advantage of matching 401(k) contributions, health insurance, health savings accounts, paid time off, and any other benefits your employer offers. It’s part of your compensation package, after all.

Employer retirement accounts can certainly help you build wealth, but don’t stop there.

Invest through a Roth IRA, and also invest money more flexibly through a taxable brokerage account. The more you save and invest each month, the faster you build wealth.

Educate yourself to become knowledgeable about basic investing strategies. You don’t have to become an expert — a few index funds are typically sufficient to build your portfolio.

But don’t rely on someone else to manage your money, because no one cares about or understands your financial goals like you do.

It takes decades to become a middle-class millionaire. You get rich slowly by living modestly and maintaining a high savings rate.

Given that it will take you at least a decade or two to become a millionaire on a middle-class salary, settle back and enjoy the ride.

Don’t look at your frugal lifestyle as a sacrifice. Reframe it to enjoy living frugally, to enjoy saving money, to enjoy finding bargains.