Want to be a millionaire?
Emulating those that have already reached your desired goal could help you achieve those millions. Habits, good or bad help shape our lives. According to Society for Personality and Social Psychology, 40% of all daily activities are habits.
New York Times Best Sellers book Millionaire Next Door, states that 80% of millionaires are self-made. While there are many paths to success, there are patterns that emerged over the 5 year study that indicate self-made millionaires fall into two categories: risk takers and those that exhibit good habits over time.
The self-made millionaires that followed good habits over time also had sub-patterns around the specific habits they all seemed to follow.
Below are the top 11 habits of self-made millionaires.
#1 Reading for Self-Improvement
Self-made millionaires understand the importance of the phrase, “knowledge is power” — they read books, magazines, and online articles to stay ahead of the game. Mark Cuban and Warren Buffett both expressed they read several hours each day to help outperform the competition.
- 94% read current events
- 88% read thirty minutes or more per day on self-improvement
- 63% listen to audio books while traveling
#2 Avoid Lifestyle Inflation
Lifestyle Inflation is the concept of increasing your standard of living every time your income increases. While in some cases it is OK to increase your living standard as you make more money, when it becomes a habit of ever increasing expenses as income increases, people find themselves in a perpetual state of “near poverty.”
Many self-made millionaires live in the same house and drive the same car they had before they became millionaires, or at least, they don’t go overboard when upgrading.
“If you buy things you don’t need, soon you will have to sell things you need.”
— Warren Buffett, billionaire, investor, philanthropist, CEO of Berkshire Hathaway
#3 Exercise Regularly
Exercising regularly could be considered a pretty common goal among adults, and while it might be challenging to find time to pick up this habit, the benefits of exercising are clear.
- Improves mental sharpness and memory – Harvard study
- Stress reduction – Princeton study
- Promotes creativity – Stanford study
“I definitely can achieve twice as much by keeping fit.”
— Richard Branson, self-made billionaire entrepreneur, founder of Virgin Group
#4 Multiple Streams of Income
Self-made millionaires do not rely on a single source of income. Admittedly, this is probably one of the hardest of the 11 habits to start today, but it is a key habit as 65% of self-made millionaires had at least 3 streams of income on their way to reaching the millionaire status. (45% had 4 streams of income and 29% had 5 or more streams of income)
Multiple income streams can come from side businesses such as freelancing, real-estate holdings, or stock market investments.
“Diversifying sources of income allows you to weather the economic downturns that inevitably occur.”
— Tom Corley, author of Rich Habits
#5 Goal Setting
Self-made millionaires not just having “like to have” goals, they write them down and hold themselves accountable to reaching those goals. Self-made millionaires set goals early on in their lives and are passionate and positive about the habit of setting and achieving goals.
It is important to focus your goal setting on those that would help you achieve long-term benefits, not just short-term in nature.
Examples would be a goal to start saving $100 a week; this goal would help you start to achieve long-term financial freedom, while setting a goal to drive a Lamborghini (before you have enough net worth to support the purchase) is short sided and does not help you along the mission of long-term financial freedom.
#6 Get Enough Sleep
Binge watching shows all night is certainly a thing now, but self-made millionaires make it a habit to get enough sleep on a consistent basis. The Millionaire Next Door outlines that self-made millionaires sleep an average of 7.5 hours each night.
There are things you can do to get a better night sleep:
- Set a relaxing mood before bedtime by lowering the lights, taking a shower or listening to soft music.
- Lay out your next day’s clothes to set your mind at ease
- Make your bedroom as dark as possible.
- Stick to a constant sleep scheudule
- Ensure you have a quality mattress and pillow
Hours of Sleep per night of Successful People:
- Richard Branson: 6 hours
- Albert Einstein: 10 hours
- Tim Cook: 7 hours
- Bill Gates: 7 hours
- Benjamin Franklin: 7 hours
- Jeff Bezos: 7 hours
- Elon Musk: 7 hours
- Ellen DeGeneres: 8 hours
- Neil Patel: 8 hours
Understanding the value of sleep is important, as getting enough sleep has positive effects on memory function and creative thinking.
#7 Have Positive Mentors
Do not overlook this habit — mentors are critical to your success. Over 90% of surveyed self-made millionaires had a mentor they could identify who helped them reach the millionaire status.
Mentors can come from several aspects of your life:
- Parent Mentors
- Teacher Mentors
- Workplace Mentors
- Community Mentors
- Book Mentors
#8 Love Saving Money
Long before their millionaire status, these self-made millionaires learned to save early on in their lives and began to actually love saving money.
The rich view saving money as a necessity to building their long term financial freedom. Over 90% of self-made millionaires gained that status by saving at least 20% or more of their net income. That’s not to say you would have to start at 20% savings, but it is important to get into the habit now saving something, and build from there.
Keep in mind, saving along won’t make you a millionaire either, you have to make responsible investments to make sure you are generating healthy, but safe long term returns.
#9 Keep Expenses Low
This habit complements #2 lifestyle inflation and #8 saving; learning to keep expenses low is a habit mastered by self-made millionaires. Building a habit of keeping expenses low is something that you can incorporate into the ideal household budget, but it takes some planning and discipline.
Rich Habits, by Thomas Corley outline some interesting stats on self-made millionaire habits around keeping expenses low.
- 28% mowed their own lawn to save money
- 37% used coupons
- 8% shopped at Goodwill
- 19% managed their own investments to save money
#10 Strong Circle of Influence
Successful people tend to hang around other successful people – it is as simply as that. Many self-improvement gurus will tell you that you are the average of your 5 closest friends – meaning your friends have a significant impact on your future success.
96% of people struggling financially, associate with others who are struggling financially.
Surround yourself with optimistic, enthusiastic, goal-oriented positive thinkers and you will begin to develop those same attributes. Associate yourself with people who have the habits you are looking to gain.
Avoid at all costs the negative personalities that will ultimately bring you down in life and further away from financial freedom.
#11 Take Time to Reflect
The rat race is real — life is very busy and most of us find it hard to stop and reflect on the past. Self-made millionaires understand the importance of reflection and future vision, they dedicate at least 30 minutes a day to strategic thinking.
Strategic thinking includes topics such as finances, family, health, careers, and hobbies. Some questions self-made millionaires ask themselves are: How can I increase my earning potential? Do I enjoy what I am doing now? Am I exercising enough? Are there any more community organizations that I should be involved in?
Review your current habits and see if it is appropriate for you to incorporate any of the 11 habits listed here.
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Certified Public Accountant, Masters of Business Administration, Masters of Science in Accounting, Chartered Global Management Accountant, Family Man