How to get rich without winning the lottery

How to get rich without winning the lottery

One man explains how setting a goal helped turn his teacher's salary into a $1.5 million nest egg.

Self-made fortunes all begin the same way: with a good idea and some startup cash. Steal these savings tips from three millionaires who made a little into a lot.

Winning the lottery is everyone's fantasy, but the better bet is on a plan that relies more on pluck than luck. "You can become wealthy if you're disciplined, consistent and patient," says Andrew Hallam, who pulled it off on a teacher's salary. These qualities are especially important when you're starting out and trying to save the money needed to get your business idea (or investment strategy) off the ground.

To help you take the first steps, we asked three millionaires-none of whom were born that way-to share how they saved the money that launched their fortune. As you'll see, it's not only the rich who get richer. Photo credit: Thinkstock 

Super-Saver Tips: Joyce Bone

Cofounder of EarthCare and author of Millionaire Moms

SAVED: $10,000

WHAT SHE DID WITH IT: Started an environmental waste management company that became a $125 million business. Photo credit: Picassa

"We were living off my husband's salary when he and I decided that we needed to get serious about saving if we were ever going to realize our dream of me owning my own business. So I began tracking our money like it was my job. I carried a notebook everywhere I went, wrote down each purchase and tallied up the total at the end of the day. That way, I knew exactly if and where I'd overspent, and I would cut back accordingly.

"I also carefully went over our bank and credit card statements each month. Mistakes happen. Once the bank put a $2,500 deposit in someone else's account instead of ours. And several times, I saw that the credit card company had charged us a late fee when we were only a day late. Each time, I called right away and was able to get them to rescind the fee.

"But it wasn't all bean counting-my husband and I also made sure to have fun. Our cheapest date nights cost $5. We'd get my mom to babysit, go to the $1 movie theater and have dinner at Costco-a hot dog and Coke for $1.50." 

Enjoy date night without spending a fortune. 

Super-Saver Tips: Andrew Hallam

High school teacher and author of Millionaire Teacher

SAVED: $100-$300 a month throughout college

WHAT HE DID WITH IT: Invested in mutual index funds and some individual stocks, eventually amassing $1.5 million. Photo credit: Daemon Baizan

"When I was in college, I remember wanting to save $4,000 a year. That was huge-and what I actually started out saving was $1,200 per year. But having a goal, writing it down and keeping the piece of paper where you can see it every day are key. It keeps you committed and accountable, so you're more likely to stick with your program. When I was coming up short, I'd take extra jobs I wouldn't normally have been motivated to take, like washing buses and mowing lawns. Seeing that number in black and white increased my commitment and spurred me to stick with the program. When I reached my goal, it felt awesome.

"Even now, my wife, who is also a teacher, and I write down a savings goal every year. We aim to save 50% of our salaries, post-tax. Besides things like skipping cable TV and not buying the latest tech gadgets, we save a ton by being mindful of how we socialize. For example, we have certain friends who always like to eat out. If we tried to keep pace with them, we wouldn't save nearly as much money. So when getting together with those friends, we ask them to come to our house for dinner instead. Similarly, when we go on vacation with friends, we avoid the big spenders and travel with frugal people." 

Discover 17 things you can get for free.

Super-Saver Tips: Dani Johnson

Owner of five businesses, author of First Steps to Wealth and mom of five

SAVED $5,000

WHAT SHE DID WITH IT Bought weight loss shakes and supplements to sell. Within two years she made her first million.

"Twenty years ago, I was homeless, literally living out of my car. I couldn't afford food, let alone gasoline, and my 4-year-old daughter was staying with family. I would go on dates in order to eat!

"One day, I looked in the back seat and noticed some leftover products for a weight loss program I used before I had hit such hard times. It occurred to me that if I could sell these products and collect payment before, rather than after delivery, I'd have instant cash flow, which I desperately needed.

"So I made a flyer, copying the ad, and posted it at a local post office. Forty people answered that first flyer, and with the $5,000 I got from charging them the retail price, I bought enough products, paying wholesale, to fill my orders and have extra to sell. (I sold the products from the trunk of my car!) I continued to buy and sell that way, reinvesting the original seed money and much of the profit, attracted more and more customers, and grew my business that way.

"But a decade later, when I had a family and could afford a beautiful 6,000-square-foot house, I got myself into debt because I was overspending. To save, I cut way back on all kinds of purchases, including groceries. I used to spend $300 a week at the supermarket, but I've cut it down to $100. Now I always shop with a list; without one, you tend to buy more. I also plan seven days' worth of lunches and dinners at a time, so I can shop just once a week. I save on gas, and I have fewer chances to make an impulse purchase at checkout.

"I try to stick to a regular supermarket, too. In a big-box store or a price club, there's so much that you never knew existed, and all of a sudden you have to have it! You end up buying more and more.

"And I'm always on the lookout for the cheaper alternative. For instance, instead of paper towels, I use a rag. It does the job just fine." 

See more helpful work and money tips. 

Keep Your Cash

To control spending, get a grip on your mail. Three out of four Americans say they've made purchases based on a direct mail solicitation; nearly 60% say an email has persuaded them to buy. So make the call-or hit reply-and ask to be removed from the mailing list today! 

Source: yahoo