You like many others may feel overwhelmed with what tools, techniques or philosophies to follow and learn from in your financial journey. Everywhere you look, there are ‘how-tos and quick fixes’ on achieving seemingly overnight success. You will find several courses, articles, videos and books on how to achieve financial success.
Thomas Corley studied millionaires and the poor for over five years and the result is his book: Rich Habits: The Daily Success Habits of Wealthy Individuals,
Unsurprisingly, Mr. Corley found some major differences in millionaires and average people. An eye opener in this are the traits that set millionaires apart have little to do with money itself. The most common things many millionaires shared were simple daily rituals that over time, lead to improved productivity, health, relationships, knowledge and wealth.
What if you could achieve success by merely following these 7 millionaire success habits?
1. Track Your Money
They average millionaire does not believe leave everything up to luck. They fully understand their cash flow and when they need to throttle their spending or make adjustments in an area. With this heightened awareness of their finances, they establish a monthly budget and stick to it.
The goal of the budget is to minimize unnecessary expenses. This has very powerful in helping you gain complete control of your financial life. Budgeting helps you to avoid overspending by always knowing where you stand financially in relation to your goals.
For those who really struggle with budgeting try this: Budgets Suck. Do This Instead.
2. Read and Never Stop Learning
A daily habit that most millionaires share in common is reading. Whether you are an entrepreneur, investor, or working your way up in your line of work, you need to read to become more effective leader and a productive business owner. Reading helps you to grow and learn without requiring the time and money in traditional routes of education, like college.
Research by Thomas Crowley indicated about 85% of self-made millionaires read at least two or more books each month. Warren Buffett is one of these examples. He spends much of his day reading.
Millionaires do sometimes read for pleasure, but they also read to learn how to improve themselves. They read topics on leadership, investing, self-help, biographies, and stay current on world events.
3. Manage and Maximize Money
The most significant education for a millionaire is in developing their financial intelligence. You’re not likely to just happen upon financial freedom without gaining financial intelligence. This is can be seen in their ability not only to save and invest their money but to control typically everyone’s greatest expense in life, taxes.
They always seek to reduce their tax bills. One approach they employ is by living or incorporating their business in states with no income tax, investing in tax efficient accounts, and tax efficient investment vehicles throughout life.
4. Establish Multiple Sources of Income
Another habit of people is that they aren’t reliant on a single income source. Nearly every millionaire possesses multiple sources of income. This helps them to manage economic challenges and also make more money.
They have a focus on passive income with the limited time required to maintain it and its ability to compound while they focus efforts elsewhere, be that time with family, working their job, or building the next business.
They earn interests from loans, rental income from real estate, royalties from intellectual properties, and dividends from investments.
How income is made either passively or actively is what separates their success from those who never make it. They are continuously striving to learn ways to build multiple streams of income.
5. Set Daily Goals
It does not matter if they are setting up a business, a career, or financial projections; they have the success habit of setting short term goals. They plan daily and weekly goals to generate momentum in achieving their long-term goals.
Ensure you prioritize when setting daily goals. This will help you to achieve the most important to-dos on your list.
Setting priorities will help you to focus on highly rewarding activities. If you desire financial freedom, it is wise to pursue activities that earn you thousands of dollars rather than hundreds of dollars.
6. Avoid Debt
Another habit that separates the millionaires from the rest of the world is how they manage debt. Earlier we mentioned having a budget and avoiding bad debt, like credit card and other high interest consumer debt, makes managing their finances much simpler.
They don’t live above their means; instead, they only buy what they need and can actually afford to pay for. They aren’t out there maxing credit cards to buy new flashy things and often buy reasonable slightly used cars.
They are conscious of the interest rates even when they use credits cards or take loans. If possible, they try to pay with cash because they pay no interest there.
7. Don’t Act Rich
The goal is not to act rich but to be productive. Thomas Stanley buttressed in his book that for the most prestige brands of cars, about 86% percent are toys of the non-millionaires. While most believe that people with huge fortunes tend to drive exotic cars, in reality the largest consumers of pricey cars are aspiring millionaires (But likely not financially on the right path).
According to findings by Experian Automotive Researchers, 61% of individuals who earn $250,000 or more rarely buy luxury brands. they instead buy Hondas, Toyotas, and Fords like the rest of us. The reason is they are not ready to spend money on premium cars that tend to drop in value in a couple of years instead opting to spend much less on slightly used vehicles allowing them to invest much more into their portfolio or business.
What’s interesting about these daily rituals of millionaires? I think the main takeaway is that building wealth doesn’t necessarily equate with just sound investment strategy or working extra to make extra money.
Note how many items on this list revolve around general self-improvement, like he mentions in the book by likening it to sharpening a saw or honing a blade it takes time to see dramatic results. Better brain power, better nutrition, and better screen habits create needed room to embrace financial success.