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TOM@RICHHABITS.NET
Almost everyone wants to be wealthy. Very few ever get there. After five years of studying 233 wealthy individuals and 128 people living in poverty for my Rich Habits research, I learned that the gap is not luck, intelligence, or a college degree. It is a handful of factors most people refuse to confront. These factors quietly keep people on the sidelines of wealth creation.
Factor #1: Not Willing to Put in the Time and Money
Building wealth is expensive in two currencies: time and money. The Saver-Investor path in my study took an average of 32 years of consistently saving 20 percent or more of income and investing it prudently. The Dreamer-Entrepreneur path was faster—about 12 years—but required putting homes, retirement accounts, and savings on the line, often followed by debt. Virtuosos poured thousands of hours and tuition dollars into becoming the best in their field. Most
people want the outcome without the investment. They will not devote years or write the checks required for formal education, self-education, building a business, or the time required, building wealth demands. Without that willingness, wealth remains an elusive wish.
Factor #2: Not Willing to Make Sacrifices in Recreation Time
The poor in my study spent far more time on time-wasting recreational activities. Seventy-seven percent of the poor watched reality TV daily versus 23 percent of the rich. Many of the poor in my Rich Habits Study devoted more than an hour a day to recreational internet and social media.
Conversely, the wealthy in my Rich Habits Study limited those activities and redirected the hours into reading, skill-building, building multiple streams of income, networking, or pursuing their dreams and goals. The Delayed Gratification Rich Habit was nearly universal among the self-made millionaires in my Study.
Few of the poor forged that Rich Habit.
Recreation is not evil, if engaged in in moderation (Rich Habits #6 – Everything in Moderation). However, unchecked recreation is a wealth killer. If you will not trade some of today’s leisure time for tomorrow’s financial freedom, you will stay exactly where you are.
Factor #3: Low Risk Tolerance
Almost every path to significant wealth involves risk. Fifty-one percent of the self-made millionaires in my study took meaningful financial or career risks—starting businesses, changing careers, or investing heavily in themselves. Risk-averse people are limited to the Saver-Investor path, which works but takes the longest – 32 years. Fear of failure, bankruptcy, embarrassment, or loss of lifestyle keeps most people in jobs and spending patterns that never compound into wealth. Calculated risk is not recklessness or speculative. It requires homework and due diligence, which is the price of admission for faster, larger wealth. Low risk tolerance creates a permanent ceiling for building wealth.
Factor #4: Holding Onto Limiting Beliefs and a Victim Mindset
Poverty as an adult is often the byproduct of a mental state I call Poverty Thinking. Ninety percent of the poor in my study believed fate dictated their financial circumstances. Many inherited the idea that rich people are greedy, that money is the root of evil, that they are victims of the economy, government, or “the system,” or that luck—not habits—creates wealth.
The wealthy in my five-year Rich Habits Study believed the opposite: they believed they were individually responsible for their financial and life circumstances. They believed anyone can become rich, and they believed that daily self-improvement growth habits produce results.
Beliefs are unconscious programming, usually inherited from your parents and your inner circle. Until you replace victim thinking with a self-reliant mindset, you will not take the actions wealth requires. You cannot out-hustle a belief that says the game is rigged against you.
Factor #5: Surrounding Yourself With the Wrong People
Your environment is either a tailwind or a headwind. Eighty-six percent of the wealthy associated with success-minded peers who challenged them and everyone within their inner circle.
Ninety-six percent of the poor associated with people who reinforced limiting beliefs and Poor Habits.
The rich networked with other success-minded or successful people and worked diligently building strong relationships with influencers within their community or industry. The rich also sought out mentors who could teach them what to do and what not to do.
Ninety-three percent of self-made millionaires in my Rich Habits Study credited mentors for their success and their wealth.
Toxic relationships reinforce or facilitate the creation of Poor Habits, inaction, limiting beliefs and seek to punish those with ambition or a desire to break out of poverty by pursuing dreams and big goals.
Birds of a feather do flock together.
If your inner circle does not value delayed gratification, calculated risk, and daily improvement, you will become infected, like a virus, by their limited, poverty thinking.
These five factors are not theories. They showed up repeatedly in the data and in the media coverage of my Rich Habits findings. The good news is that each one is a choice. You can decide to invest time and money, sacrifice some recreation, raise your risk tolerance, rewrite your beliefs, and change your associations.
Wealth is not reserved for a special few. It is attracted to those willing to stop doing the things that hold everyone back and start doing the things that help create generational wealth, leaving poverty in the rear view mirror.
Tom Corley is an accountant, financial planner and author of “Rich Kids: How to Raise Our Children to Be Happy and Successful in Life”, “Effort-Less Wealth”, “Change Your Habits Change Your Life”, “Rich Habits Poor Habits”, “Rich Habits: The Routines Millionaires Use Daily to Build Wealth” and “Rich Habits Wealth Academy.”
