Rich Habits Blog

Tom Corley city_compressRich Habits is all about unlimited opportunity, achieving the American Dream and ending poverty.

It is the by-product of  a 5-year study I conducted on the daily habits of wealthy people and poor people.

Follow me on this blog and I will share with you many of the secret strategies that I uncovered in my research.

The discoveries I have made will dramatically improve your life!

My CBS Interview

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Here is a link to my recent CBS interview:

Hollywood’s Mentor

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Habits spread like a virus throughout your social networks, according to a study conducted by Nicolas Christakis, Yale University.

Once forged, habits tend to stick with you for most of your life, according to another study conducted by Dr. Pressman, Brown University.

One of the most important sources of habits are your parents. 

The second most important source of habits are mentors. Mentors share their habits with their mentees. Mentees, thus, adopt the habits of their mentor and those habits stick with them for most of their adult lives.

If you don’t believe me, just look at the latest headlines on this Harvey Weinstein Hollywood mess. Women are now coming out of the woodwork to share their stories of sexual abuse, not only at the hands of Harvey Weinstein, but also at the hands of other famous male Hollywood actors who suckled at the tit of Weinstein.

Harvey Weinstein was a major power broker in Hollywood, as head of Miramax Films. Anyone in a position of power becomes a mentor, good or bad.

There is no doubt in my mind that Weinstein mentored hundreds, if not thousands, of subordinates over his thirty years.

This means there may be thousands of men in Hollywood who, thanks to Weinstein, have forged the bad habit of sexually abusing women.

Because habits stick with you for most of your adult life, this means we are only seeing the tip of the iceberg in Hollywood.

Harvey Weinstein may be gone for good, but there are literally thousands of Harvey Weinstein mentees out there in Hollywood, just waiting for your young daughter to walk through their door for their “audition”.

Let that sink in for a moment.

 

Bad Habits Always Take You Down, Eventually

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Bad habits generally don’t take you out immediately. They often take many years before they negatively impact your life.

Just think about some of the actors, CEOs, athletes, musicians, politicians and other celebrity types who were taken down by their bad habits:

  • Bill Cosby’s Alleged Sexual Predator Bad Habit
  • Tiger Woods’ Infidelity Bad Habit
  • Eliot Spitzer – Former governor of New York’s Prostitute/Infidelity Bad Habits
  • Bernie Madoff’s Theft Bad Habit
  • Aaron Hernandez’s Murder Bad Habit
  • Whitney Houston’s Drugs Bad Habit

And now we have Harvey Weinstein and his sexual abuse bad habit.

As I mentioned in my book Rich Habits, your habits create two types of luck – Opportunity Luck or Detrimental Luck. [Read more…]

How Successful Entrepreneurs Survive Adversity

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Eighty-two percent of the successful entrepreneurs in my Rich Habits Study, my millionaires, said they spent most of their entrepreneurial journey struggling with adversity. This ongoing battle often damaged their self-confidence and sometimes resulted in depression. They lacked confidence or became depressed because, despite their best efforts, they were unable to move the needle forward. Adversity never seemed to take a break.

So, what kept these self-made millionaires going? [Read more…]

Escaping a Culture of Poverty

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I was recently interviewed by the Washington Post. The Federal Survey of Consumer Finances had just released their 2016 report, showing the rising number of white millionaires in the last 25 years. The first question the Washington Post reporter had was why?

I told the reporter that many of the individuals who became millionaires over the last twenty-five years were baby boomers. Since most of those boomers were white, naturally there would be a greater number of white millionaires over the past twenty-five years.

Simple enough, right?

But the follow-up question the Washington Post reporter asked was really the more important question:

Why wasn’t the black community seeing a corresponding increase?

I told the reporter that we did not have a wealth gap in America, we had a parenting gap. Sadly, there is a culture of poverty in the black community and at the heart of this culture of poverty is one very alarming statistic – 72% of black children are raised without a father.

Why does that statistic matter?

According to my Rich Habits research, our daily habits are the reason why we are rich, poor or stuck in the middle-class. And where do we get most of our habits?

According to a study by Dr. Pressman of Brown University, we pick up most of our adult habits by the age of nine. And for most of those formative years, it is our parents who teach us those habits. Most of the self-made millionaires in my study confirmed that they were taught certain, specific habits by their parents that enabled them to succeed in life.

Children raised in single-parent households are at a clear disadvantage. And it’s not a 50% disadvantage, it’s a 100% disadvantage. Single-parents are the sole provider and this often means working long hours or taking on a second job in order to earn enough money just to survive. This leaves little to no time to mentor their kids for success by teaching them good success habits. This 72% single-parent statistic represents a culture of poverty. And until that culture changes, or until that one parent becomes a success mentor to their kids, children raised in single-parent households will forever lag behind children raised in two-parent households.

This single-parent statistic, along with the story of Ben Carson, motivated me to write my book Rich Kids, a book which shares the success habits self-made millionaires learned from their parents. It is also why I spent the past six years speaking to close to 2,500 high school and college students, specifically in lower-income school districts in the New York metropolitan area.

Dr. Ben Carson was raised by a single mother in the ghettos of Detroit. Concerned that their sons, Ben and Curtis, were taking the wrong path in life, Sonya Carson made a fateful decision that altered all of their lives forever. Sonya Carson, a single mother with a third grade education, turned the T.V. off for her kids, limiting them to only two hours of T.V. a week and forced her two young boys to read two books every week and then write a summary of what they read and what they learned from their reading. Each week they would hand their mom this summary for her to review. Sonya would mark up the summary with notations and hand the summary back to her boys. Reading for learning, soon became a daily habit for Ben and Curtis.

What the boys didn’t know until they were in high school was that their mother, Sonya, was illiterate. She could not read their book summaries. But intuitively Sonya knew that reading for learning was a way out of the ghettos. Sonya did not believe life was hopeless. That belief was pulled, like a weed, from their lives. Hopelessness never had a chance to take root in their family household.

Ben Carson went on to become a world famous neurosurgeon and recently ran for President of the United States. Curtis Carson went on to become a senior mechanical engineer with Honeywell, specializing in developing braking systems for aircraft. Sonya went on to get her GED, went on to college and in 1994 received an honorary doctorate degree from Spalding University. All of Sonya’s grandchildren attend college or graduate school in prestigious higher education institutions.

One good habit, reading, taught by one parent, literally lifted Ben and Curtis out of poverty. So, there is hope, even in single-parent households. The cycle of poverty can be broken, even in single-parent households. But only when that single-parent becomes a success mentor to their children. And in order to be a success mentor, you must teach your kids certain, specific habits that will help them succeed in life.

It’s Not How Much You Make – It’s How Much You Keep

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Conor McGregor, one week after receiving $30 million in winnings from his very lucrative loss to Floyd Mayweather, bought a super yacht reportedly worth $12 million. That’s on top of the multiple Lamborghinis, BMWs, Rolls-Royces and Range Rovers he owns. I’m not done. He also owns a 12,000 square foot home in Las Vegas worth $20 million and a mansion in Dublin, Ireland worth in excess of $2 million. Still not done. He has a luxury watch collection worth over $300,000. And, unless he finds some financial religion, his want spending will continue to get worse, until he finds himself one day sharing a room with M.C. Hammer.

The tabloids are replete with stories of prodigious earners who had nothing left after years of excessive spending:

  • According to The Daily Telegraph, the forensic accountant at Michael Jackson’s 2005 child sexual abuse trial stated that Jackson had been spending $20 to $30 million more than his earnings per year.
  • In 2012, the financial advisors of the former NBA champion Dennis Rodman reported that he was broke. Years of extravagances, wild spending was the reason given.
  • Courtney Love, wife of Nirvana’s Kurt Cobain, squandered over $27 million of Nirvana earnings on years of hard partying and wild spending.
  • Thomas Jefferson, founding father, author of the Declaration of Independence and America’s third president, had a half a million dollar a year (in current dollars) wine spending habit that left him penniless when he died.
  • Famed actor, Nicolas Cage, who made $150 million in his acting career, at one time owned a haunted mansion, a private island, a collection of shrunken heads and spent $276,000 on a skull of a Tyrannosaurus Rex. His reckless, excessive spending forced him into bankruptcy in 2009.
  • Johnny Carson sidekick, Ed McMahon, who made millions during his fifty year career, was forced to sell his home, or face foreclosure by his bank. In a 2008 Larry King interview,  McMahon told King, “Well, if you spend more than you make, you know what happens.”
  • Johnny Depp, according to Court documents obtained by The Hollywood Reporter, spends $2 million a month. His reckless spending over the years included $75 million on fourteen homes, an $18 million luxury yacht and $30,000 a month on wine.
  • Then there are the stories of the extravagant spending habits of Mike Tyson, Muhammad Ali, Toni Braxton, M.C. Hammer and many, many others.

This excessive spending is also known as

Lifestyle CreepIncreasing your standard of living in order to match your increased income. Lifestyle Creep is driven by want spending – spending your money on things you want but do not need. Left unchecked, want spending can become an addiction.

And it’s one of those Poor Habits I like to write about.

At its very core, being wealthy comes down to two things:

  1. Making It and
  2. Keeping It

Many ordinary individuals, like our celebrity friends above, are very good at creating wealth but terrible at keeping it.

You see it every day all around you. A friend, colleague or neighbor suddenly comes into money – a large bonus, a big promotion, stock vesting or an inheritance. Suddenly, they are finding novel ways to spend their newfound wealth: super sizing their home, new expensive cars, a vacation home or that boat they’ve always dreamed of.  Or, far more common, you probably know individuals who live beyond their means, relying on credit cards in order to fund their lifestyle.

Sometimes, lifestyle creep can get out of hand. How many of you know someone who has filed for personal bankruptcy? I know a few. Barring outlier causes (failed business, divorce, disease, or chronic disability), excessive spending is usually the main culprit for the vast majority of those who eventually find themselves broke.

According to Census Bureau data, there are approximately 30 million people who make more than they need but who are, nonetheless, one paycheck away from poverty. Far too many regular, ordinary individuals take a page out of the celebrity money mismanagement playbook, spending excessively and living beyond their means for too many years, one job loss away from being homeless.

Being rich is not always about how much you make, but it is always about how much you keep.

Top 9 Money Habits of Self-Made Millionaires

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My Rich Habits research has been covered by the media in twenty-seven countries. I’ve done my best to share that research with over thirty million people around the world through my books (Rich Habits, Rich Kids, Change Your Habits Change Your Life and Rich Habits Poor Habits) my blog and through my TV, radio and various other media outlet interviews. In my books, I go into greater detail on this topic, but below are some of the key points I cover in those books on this topic.

Self-made millionaires fall into two categories:

  1. Savers
  2. Risk Takers

Savers

Self-made millionaire Savers accumulate their wealth by living below their means, saving money and then investing that money prudently. According to my Rich Habits research, this path to multi-millionaire status takes about thirty-two years. Savers typically are risk averse, employed most of their lives and have a low or moderate standard of living. Self-made millionaire Savers were among the least wealthy in my study, with an average net worth of $3.4 million. Being a Saver is the risk-free way to building wealth. It’s the safe path to wealth accumulation. It requires discipline, diligence and adhering to a low to modest lifestyle.

Risk Takers

Self-made millionaire Risk Takers are individuals who take some risk in the pursuit of wealth. They are typically business owners, entrepreneurs, aggressive-savvy investors in stocks or real estate or they create some product or service that is so unique they are able to demand a significant premium in return for the purchase or use of their product or service. Self-made millionaire Risk Takers were among the wealthiest in my study, with an average net worth of $7.4 million. Being a Risk Taker is only for the bold and courageous. It’s the high-risk path to wealth accumulation. It requires courage, persistence, cunning and a hard core work ethic.

This article is devoted to the Savers out there – those who wish to become millionaires with little to no risk.

In my study, I found that all Savers have a specific money mindset. Below are some of the top money strategies of self-made millionaire Savers: [Read more…]

Marry Well If You Want to be Happy, Healthy and Wealthy

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Eighty-one percent of the self-made millionaires in my Rich Habits Study were never divorced. This equates to a divorce rate of only 19%. That’s a staggering data point, considering, in the general U.S. population, the divorce rate, according to data from the National Survey of Family Growth, was somewhere between 44%-48%.

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.

SHARED VALUES

What, exactly are Values? [Read more…]

Rich Habits Poor Habits Episode 36 | The 4 Paths to Wealth

Becoming rich means taking risk or making sacrifices, you get out what you put in.

In Tom Corley’s five-year Rich Habits study of 233 rich people and 128 poor people he discovered that your habits dictate your circumstances in life.

He discovered that daily habits dictate how successful or unsuccessful you will be in life.

There are four ways to become rich:

  • Live Below Your Means
  • Expand Your Means
  • Do Both
  • Getting Lucky

1. Living Below Your Means

Living below your means and investing your savings prudently is the only guaranteed way to become rich.

But, this approach requires enormous sacrifices – you must manage your spending your entire life and that requires making sacrifices: small house in an inexpensive neighborhood, no vacations, no restaurants, no kids. lose saving

If you do have kids your kids are forced to sacrifice along with you.

They have to buy their own stuff: iPhones, movie tickets, toys, cars, college education, etc.

Most are unwilling to make those sacrifices.

We want the nice home in the safe neighborhood, we want the nice vacations, we want to give our kids their iPhones and a college education.

So, for the vast majority, living below your means requires too much sacrifice.

But, for those willing to make the sacrifice, wealth is virtually guaranteed.

So, the question is, how bad do you want to be rich? Is being rich so important to you that you are willing to make the sacrifices that are required?

2. Expand Your Means farm seed soil grow wealth

Expanding your means usually requires taking on risk and working long hours, by pursuing a dream or starting a business.

According to my research and many other studies on wealth creation, about 80% of the multi-millionaires and billionaires make their money this way.

The upside is enormous wealth where everyone in your family benefits from your risk taking and hard work.

The downsides include time away from family due to long work hours or poverty, you could fail.

3. Doing Both

Living below your means and expanding your means requires the most sacrifice.

4. Getting Lucky

Getting lucky means you fall into money somehow without any real effort. success

Examples of this are big gambling wins such as hitting the lottery, the slots, horses, etc.

Or, you you inherit your wealth – you’re born into a rich family or inherit money from a parent, grandparent, aunt, uncle, brother or sister.

The reason so many gamble is because they are unwilling to make the long-term sacrifices required.

Almost everyone wants to be rich, but they want that wealth without having to take on risk, work long hours, or make sacrifices for themselves or their family.

Becoming rich is not easy.

 

 

Successful Self-Published Author Shares His Mistakes, Failures and Success Tips

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My first self-published book, Rich Habits, has sold nearly 50,000 copies so far. It rose to #7 on Amazon in ALL BOOK CATEGORIES in the U.S. and stayed in the top 100 of ALL BOOK CATEGORIES in the U.S. for 3 weeks. That puts me in the top .1% of first time, self-published authors. Most first time, self-published authors sell no more than 500 copies of their books, ever.  I’ve been on CBS Nightly News, Australian TV, The Dave Ramsey Radio Show, hundreds of other radio shows, Money Magazine, Inc. Magazine, Fast Company Magazine, SUCCESS Magazine, Epoc Magazine (Brazil’s largest weekly), More Magazine and many other print and online magazines. I’ve received media publicity in 23 countries. I’ve even spoken to millionaires on the same stage as Richard Branson.

Every week a new first time, self-published author asks me what they need to do in order to succeed. I never, ever ignore them because I have a very long memory. I remember how hard, how lonely and how depressing it was for me in the early going, primarily because I was on my own. I never wrote a book before, never promoted a book before and knew no one who did any of those things. I had to figure things out on my own, through the School of Hard Knocks. I had to learn what to do and what not to do. And I failed so often and made so many mistakes. Those failures and mistakes are scar tissue inside my brain. Honestly, I think even Forest Gump would be appalled at the mistakes I’ve made. It’s so unbelievably hard to succeed, as a self-published author, if you don’t know what you’re doing. And, so I made a vow to myself that I would never leave a fellow first time, self-published author on the field of battle if they asked for my help. I don’t care how successful I become in this book business. I will always find the time to share what I’ve learned with new authors. So, in an effort to do just that, I thought I’d lay out what I believe are the major things first time, self-published authors need to do in order to have a shot at success. Let’s go. [Read more…]