Financial Success Rich Habits

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It takes time to become a self-made millionaire. Eighty percent of the self-made millionaires in my Rich Habits study became wealthy after age fifty. Somewhere along the line these self-made millionaires learned the secrets to saving and spending. In most cases, they either stumbled upon some mentor or read some book or watched some T.V. program or listened to some radio program that gave them the critical financial success habits that allowed them to save and moderate their spending.

Most, unfortunately, never forge financial success Rich Habits. As a result, the vast majority of people live paycheck to paycheck, one job loss away from being homeless. And when they retire, they live the remainder of their years in near or abject poverty.

Let’s take a look at the Financial Success Rich Habits of self-made millionaires:

  1. Self-made millionaires Start Saving Early – As soon as they begin earning money, the self-made millionaires in my study saved a percentage of their earnings. This could be 5%, 10% or 20% or more. The higher the percentage, the faster you will become wealthy. For those in my study who saved 20% or more, they became rich in their mid-forties. For those who saved 10% or more, they became rich in their sixties. The more you are able to save at an early age, the more wealth you’ll accumulate and the sooner you’ll be financially independent.
  2. Self-made millionaires Establish Savings Goals – They save money in order to buy a home. They save money in order to fund college for their kids. They save money to fund their retirement. They determine what is most important to them in life, and build their savings goals around their priorities.
  3. Self-Made millionaires Automate the Savings Process – This is where the rubber meets the road – implementation. Self-made millionaires create a process that allows them to automate the savings process. Some create savings buckets, which are separate savings accounts for specific purposes, such as saving for a home, saving for a wedding, saving for a child’s education or saving for retirement.
  4. Self-made millionaires Put Their Money to Work – Accumulating wealth is important but you must also put your wealth to work if you want to keep it growing. Putting your wealth to work means investing it wisely in stocks, bonds, real estate and other business opportunities that create additional sources of income.
  5. Self-made millionaires Invest in What They Know – Self-made millionaires do their homework about each and every investment they make. They do not speculate or take irresponsible risks with their money. They study one investment at a time until they become informed investors. Only then do they invest their savings.
  6. Self-made millionaires Marry Well – When you marry well, it shows up in the form of a long-term, sound marital partnership. When you marry well it also shows up on the Balance Sheet, in the form of wealth accumulated over many years due to common values and habits concerning money When both spouses have similar values and habits, when they are on the same page, so to speak, building wealth and mutual fulfillment becomes much easier. When values and habits conflict, both spouses are not on the same page, and building wealth and securing mutual fulfillment becomes difficult, if not impossible.
  7. Self-made millionaires Have a Financial Plan – They create a blueprint of their ideal future financial life and then follow that plan every day, month and year.
  8. Self –made millionaires are Frugal Spenders – Being frugal requires three things:
    1. Awareness – Being aware of how you spend your money,
    2. Quality – Spending your money on quality products and services and
    3. Bargain Shopping – Spending the least amount possible, by shopping around for the lowest price.

On its own, being frugal will not make you rich. It is just one piece to the financial success puzzle. But being frugal will enable you to increase the amount of money you can save. The more you have in savings, the more options you have to make money. Having money set aside in savings allows you to take advantage of opportunities. Without savings, opportunities pass you by.

  1. Self-made millionaires Keep Their Standard of Living Low – “Same house, same wife, same car.” There’s a lot of wisdom in these words. What they really mean is that no matter how much your income increases, do not change your standard of living. Don’t supersize your life by buying things you really do not need. Live a modest life and forge the Rich Habit of Delayed Gratification – putting off what you want today so that you can have something to fall back on in the future. Here are some ideas to help you do that:
  • Use Coupons – Even the wealthy in my study engaged in this money savings habit. 30% of the rich used coupons to buy food. Why pay more than you have to on groceries or other expenses?
  • Keep Housing Costs Low – For most, a home or apartment is the most expensive part of the spending budget. When you keep the size of your home or apartment small it will also reduce how much you spend in mortgage interest, real estate taxes, repairs and utilities. Seek to keep your housing costs below 25% of your monthly net pay.
  • Bargain Shop – Far too many make spontaneous purchases, paying much more than they otherwise would. That’s a Poverty Habit. Shopping for bargains and taking advantage of sales events is a smart money habit.
  • Stick to BYOBs – There are many restaurants that do not sell alcohol, beer or wine and allow you to bring your own spirit of choice into their restaurant. Restaurants markup liquor sales by as much as 100%.
  • Keep Vacation Costs Low – Spend less than 5% of your net income on vacations. Self-made millionaires do not go on exotic vacations. They take modest, inexpensive vacations. They find bargain vacation deals for their family. They use Internet sites like Airbnb, VRBO and HomeAway to find discount lodging. They suffer through the sales pitches of Timeshare companies in order to get discounted or free vacation packages. They book last minute cruises because they know certain cruise lines discount their fees when their cruise ship is not at full capacity.
  • Food Budget – Spend less than 15% of your net income on food. Entertainment Budget – Spend less than 10% of your net income on entertainment/gifts. This category includes bars, restaurants, movies, music, books, gifts, etc. Eating out and any prepared food you purchase is part of your entertainment budget.
  • Cars – Spend less than 5% of your net income on car expenses. Car expenses include monthly car payment, car insurance, gas, tolls, registration fees, repairs and maintenance.
  • Clothing – Spend less than 5% of your net income on clothing. Many goodwill stores carry high quality clothing. You may have to spend a few extra bucks on tailoring, but it is well worth the additional cost.
  • Avoid Want Spending – Want spending is emotional spending. It is never a good idea. You need to take the emotion out of your spending habits. There is always time to plan and shop before your spend your hard earned money.
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Thomas C. Corley About Thomas C. Corley

Tom Corley is a bestselling author, speaker, and media contributor for Business Insider, CNBC and a few other national media outlets.

His Rich Habits research has been read, viewed or heard by over 50 million people in 25 countries around the world.

Besides being an author, Tom is also a CPA, CFP, and hold a master’s degree in taxation. As president of Cerefice and Company, CPAs, Tom heads one of the premier financial firms in New Jersey.
 
Phone Number: 732-382-3800 Ext. 103.
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