All millionaires start somewhere. Are you wondering how to start on your own journey to millionaire status? Here are some tips on habits of millionaires to help get you started in the right direction. I love studying the habits of millionaires, and have even had a few millionaire mentors of my own.
In this article, I explore the actual habits of the wealthy. Read on to discover how self-made millionaires actually get there!
- Live within your means
This might sound obvious, but first generation millionaires and people who build their own wealth know how to live within or well below their means. Wealthy people pay their future selves first. They save at least twenty percent of their net income and manage to live on the remaining 80 percent.
Here are some guidelines for your overall spending for your NET (take home) income:
- Housing = no more than 25 percent, no matter if you rent or own
- Food = no more than 15 percent
- Entertainment – (i.e. movies, bars, bowling, vacations etc.) no more than 5 percent of annual net income.
- Auto loans – spend no more than 5 percent on auto loans, and avoid a leas. Ninety-four percent of the wealthy buy instead of lease. Most wealthy individuals keep their cars until the wheels fall off
- Credit card debt – avoid it at all costs.
- Savings and Investments – two different categories. You should never lost money on savings. Try to sock away six months of living expenses in a savings account in case of an unexpected events.
- Retirement accounts – Contribute as much as you can to both your company sponsored retirement account (If you have one) and max out your personal IRA. 2021 contribution limits for a 401(k) are $19,500 and for an IRA is $6,000
- Read consistently
According to Thomas C. Corley and his five year long research study on the habits of the wealthy, outlined in several books including, Change Your Habits Change Your Life.
According to his research, the rich would rather be educated than entertained. Corley found that 88% of the rich devote thirty minutes or more each day to self-improvement or self-education reading, and that most did not read for entertainment.
The wealthy individuals surveyed tended to read three types of books: biographies of successful people, history books, or self-help or personal development books. This is also a lifelong and
- Exercise!
Cardio exercise is good not only for the body, but also for the mind. More than seventy six percent of the rich exercise for at least 30 minutes or more each day. Exercise has numerous benefits. Most importantly, exercise promotes all kind of changes in the brain, including neural growth, reduced inflammation, and new activity patterns that support a feelings of calm and wellbeing. Exercise also releases endorphins, which are powerful chemical in your brain that lift your spirits and help you feel good. This is why exercise is one of the most powerful habits of millionaires.
All of this happens for free and without any negative side effects. It’s easy to see why the majority of the rich take advantage of this powerful habit. Just don’t over do it and make sure to ease into the habit if it’s been awhile since you’ve hit the gym.
- Hang Out with Other Successful People
Successful people like to hang out with other successful people. This provides not only an opportunity to network and make connections, but also a change to give back to other people who share their beliefs and convictions. Through networking with other successful people, the wealthy can both share what they know and look for ways to improve themselves as well.
- Volunteer
It feels good to give back. The rich know that volunteering helps not only the people or organization receiving the services, but also the people giving the service. Through volunteering, the wealthy know that the can stay connected to their communities and feel good about themselves. All for free!
- Practice Dream Setting
Through dream setting, you script your future life. 61% of self-made millionaires report using this strategy to plan out their lives. In this process, you define your future life by feeling your future situation in very complete detail. Dream setting involves setting your intentions and imagining these details in a way that brings them closer to reality. And then committing these details to paper in roughly a hundred to one thousand words.
This is a powerful planning strategy and habits of millionaires because it allows you to imagine your future life with no restrictions. By imagining your future, you bring it closer to reality. You also imagine the details that will make this more likely to come to pass by becoming the type of person who will make the decisions that lead you to this desired outcome.
- Pursue Their Own Goals
The longest term happiness comes from pursuing your own dreams and goals. It also results in the greatest accumulation of wealth. Too many people make the mistake of chasing someone else’s dreams while most rich people define their own goals and pursue them with relentless passion.
- Sleep at least seven hours a night.
Sleep is the secret to success. So many restorative processes occur while the body is sleeping, including boosting the immune system, and improved memory function. Sleep affects almost every tissue in our bodies. It affects our growth and hormones, appetite, breathing, blood pressure, and cardiovascular. The benefits of a solid night of sleep are extensive and comprehensive. Health and sleep is wealth.
- Get Up Early
Close to 50% of the self-made millionaires in Corley’s study wake up at least three hours before their day at work actually begins. This is a powerful strategy to deal with inevitable daily disruptions and helps clarify priorities before the day begins. Disruptions have a negative psychological effect on us. They can see into our self consciousness and eventually form the belief that we have little control over our lives. This is a very powerful
Getting up early to tackle the most important tasks of the day will give you a sense of control over your life. This may also provide a much needed confidence boost. This makes it one of the very powerful habits of millionaires to adopt.
- Multiple Sources of Income
Self-made millionaires do not rely on a single source of income. They have developed multiple streams of income. Three seems to be the magic number in Corley’s study. At least 65% of self-made millionaires had at least three streams of income that they created before they made their first million dollars. Some examples of these additional streams of income include stock-market investments, real estate rentals, and part ownership in a side business.
BOTTOM LINE – Becoming a millionaire takes time, discipline and perseverance. Adopting the habits of a millionaire will bring you closer to millionaire status.
Good article Christianna. You know how to make yourself a millionaire and you’re already doing or working on most of the things on your list. (For one thing, you’re doing well so far on keeping your car until the wheels fall off!)
You didn’t mention it in this article (though you have in others), but if you work on your relationships and value experiences over material things, you can feel like a million bucks even if you don’t actually have a million dollars.
(Psst… 🤫 Besides a couple of minor typos, I think you missed the end of a sentence again: “This is also a lifelong and” – and something… But yes, from the section it was in, keep reading, and keep learning. An investment in yourself can pay great dividends also.)