Rich Habits are the habits that were common among the self-made millionaires in my Rich Habits Study.
As you know, there are 4 Paths to Wealth. Each path has unique Rich Habits that helped those self-made millionaires become wealthy.
Below are the Common Rich Habits among the Saver-Investor Self-Made Millionaires in my Rich Habits Study:
- I Will Save and Invest My Income – Saver-Investors, more than any class of self-made millionaires, forge the Rich Habit of consistently saving 20% or more of their net income. This enabled them to then prudently invest their savings over many years. To help them save and invest, Saver-Investors used a strategy I call the Bucket System. They use the Bucket System to help them identify specific savings priorities and then devoted a percentage of their savings to each bucket: Wedding, First Home, Emergency Fund, College Savings, Investments, Retirement, etc.
- I Will Live Each Day in a State of Moderation – Saver-Investors, more than any class of self-made millionaires, forge the Rich Habit of living their lives in moderation. They do nothing in excess, except spend time with family and friends.
- I Will Never Quit on My Dreams – No matter what happened in their lives, they never quit on their dream of saving and investing their way to becoming self-made millionaires.
- I Will Focus on my Dreams and Goals Every Day – The Dream for Saver-Investors self-made millionaires was to save and invest their way to wealth. The goals they used to manufacture that dream were:
- Frugal Spending/Modest Standard of Living – Saver-Investors focus like a laser, every day, on frugally spending their money so that they could create a standard of living that allowed them to save and invest 20% or more of their net income.
- Invest Consistently – Saver-Investors consistently invested their savings. This consistency allowed them to take advantage of Dollar Cost Averaging and helped them consistently build their wealth over many years.
- I Will Take Calculated Risks – Many of the Saver-Investors in my Rich Habits Study were what I call “Home Depot Investors” – they did their own investing. This required that they do their homework before making any investment. They often relied upon financial advisors to help provide them with information to enable them to select suitable investments. The Non-Home Depot Investors relied upon financial planners or financial advisors in crafting and implementing an investment plan. They regularly communicated with their financial advisors – they devoted about 3-4 hours every month in discussions with their financial advisors.
- I Will Ask Questions in Order to Learn From Others – Saver-Investors ask their financial advisors many questions regarding their investments: investment-related questions, tax-planning questions, legal questions, questions regarding the fees of various investments.
- I Will Create Multiple Streams of Income – Over the course of their lives, Saver-Investors created multiple revenue streams: Interest Income, Dividend Income,Annuity Income, Rental Incomeand Capital Gain Income.
- I Will Seek Feedback From Others – Saver-Investors often rely on financial experts to help them select their investments.
- Law of Association – Saver-Investors surround themselves with other Saver-Investors. Because habits spread like a virus throughout your social networks, it’s important for Saver-Investors to limit their exposure to individuals who do not share their Saver-Investor mindset: Risk averse, frugal spending, consistently saving money, prudently investing their savings, maintaining a modest standard of living.
- Frugal With Their Money – Saver-Investors have forged the Rich Habit of seeking the highest quality product or service and the lowest price.