I interviewed self-made millionaires for their money tips. Here are 3 everyone should know.

“Win the lottery!” Someone yelled out. 

I was delivering a corporate lunch-and-learn workshop and had just asked: “How does someone on a regular salary manage to retire at 30 or 40, while many struggle to afford retirement at 60?” 

The next slide was about lottery winners who declared bankruptcy. The room fell quiet. 

See, I had just started a financial education platform to help people take control of their finances. I’d spent a huge amount of time interviewing and working with financial professionals to pull together our Mastering Money program.

Watch: 5 money lessons your parents told you, that you should probably forget... Post continues below.

Today, hundreds of people have transformed their financial lives through the program, and the majority (over 65 per cent) are women. Collectively, we’ve helped our students create over $1 million dollars in personal wealth. 

In addition to working with experienced financial professionals to develop the program, I also interviewed several self-made millionaires to understand what they knew about wealth and what helped them achieve financial success. 

Here are three powerful insights I learned in the process, which can help you fast-track your financial success too.

1. Don’t just rely on the income from your day job. 

Here is how most people think about money: ‘get a job, earn an income, and keep chasing a pay increase’. In other words, the focus is almost entirely on the income you earn. 

Now, don’t get me wrong... Getting a pay increase can make a big difference to your financial situation. But it’s still only half the equation. 

If simply earning more was the answer to all money problems, how come there are countless examples of millionaires who declared bankruptcy, or high-income earners who live paycheck to paycheck?

There’s a difference between money (income) and wealth (assets). The key to sustainable, long-term financial success lies in converting income into assets. 

This is why investing is such a necessary part of building wealth.

The good news is that investing doesn’t have to be hard. You don’t need a finance degree or a lot of money. Thanks to technology, it has never been cheaper or easier to start investing. 

2. Understand that ‘risk’ is not a bad thing. It’s actually necessary to build wealth.

One thing that holds so many people back from creating wealth is: the fear of risk. 

Most people think of risk as a ‘bad’ thing. They think that ‘risk’ means: “I might lose money.” 

Here’s the thing though: there’s no way to completely avoid risk. No matter what you do... Risk is part of the equation. So instead of trying to avoid risk, learn how to better assess and manage it. 

For example, most people are scared to invest because it’s 'risky'. But not investing is also risky. 

There’s the risk of your savings losing their value to inflation, there’s the risk you might not grow enough wealth to achieve your long-term goals. Those are very real risks. 

However, most people are more worried about the risk of investing (than the risk of not investing) because they confuse ‘fear’ and ‘risk’. Fear is an emotion, and it is not a good measure of risk. Just because you’re scared of something (like investing), doesn’t make it riskier, and just because you’re not scared of something (like saving), doesn’t make it more safe. 

The reason this is so important is because taking calculated risks is a big part of how rich people create wealth (whether it’s as an investor or business owner). Your ability to assess and take calculated financial risks has a direct impact on your ability to grow wealth. 

So think about it: how much could your fear of risk really be costing you? 

3. Focus on what is in your control.

Our ‘system’ isn’t fair. There are many ways in which various groups are systematically disadvantaged financially, and we should all work towards a more inclusive, fair society. 

At the same time, there are actions we can all take within our individual control to significantly improve our financial lives. Whether it’s learning how to invest, or taking control of your superannuation, or even just knowing where all your money is spent… 

How many of us can really claim that we do what is within our individual control to improve our financial position? 

This is a common theme I noticed amongst all the self-made millionaires I’ve worked with. I know it’s easy to think that “oh they must have had it easy”, but actually... each person had their own setbacks and hardships (as we all do).

However, regardless of their background (whether they were migrants, women of colour, raised by a single parent, or faced mental health challenges), they focused less on how the odds were stacked against them, and more on improving the things that were within their control.

Listen to What The Finance, Mamamia’s podcast all about money. Post continues after audio.

The other advantage of this mindset is that it can also help lighten the ‘mental load’. 

When it feels all too much and too hard, focusing on making and celebrating the ‘small wins’ can make a big difference to how you feel about yourself and your circumstances. 

So, I encourage you to make a list: what are some actions you can take in the next few months to strengthen your financial position before the new year? 

It’s not too late to make some serious momentum. You’d be surprised how quickly things can change when you start taking consistent steps in the right direction. 

Paridhi Jain is the founder of SkilledSmart, an independent financial education platform helping people learn to save, manage and invest their money. For more money tips, you can get a free e-book on “5 Money Mistakes Costing You Thousands” via their website, and follow them on Instagram.

Feature Image: Getty Images / Mamamia. 

We need you! Tell us about your skincare routine for a chance to win a $50 gift voucher.