What does being “rich” come down to?
A study has been made on millionaires for 6 years and we have realised being ‘rich’ comes down to only two things. These two actions will teach you how to grow wealth in the most stable way possible:
- Accumulating wealth
- Keeping the wealth you’ve accumulated
The first step, getting rich, requires that you forge certain specific habits that make getting rich possible. Some of the most important habits on how to grow wealth include:
Pursuing daily growth.
Daily self-improvement is a hallmark of self-made millionaires. They read at least 30 minutes a day to gain knowledge. They also devote significant time every day to practising and perfecting their skills.
The rich build goals around each of their dreams. This makes it possible to realize those dreams. Think of every dream as a rung on your own ladder. Your ideal, perfect life is realized when you reach the top of the ladder. Eighty per cent of the self-made millionaires in my study built goals around their dreams.
Ninety-four per cent of the rich saved 20% or more of their income for many years prior to becoming rich. They then put their savings to use by taking calculated risks.
Taking calculated risks.
Fifty-one per cent of the self-made millionaires in this study took a calculated risk in time and money. Calculated risk is a unique type of risk that requires you to do your homework.
Seventy-one per cent of the self-made millionaires in this study were optimistic about life. Their optimism infected everyone around them. They became magnets for other success-minded people.
Being open to new ideas, new ways of doing things and the opinions of others is critical to learning and growth. Growth is the parent of success. You must grow into the person you need to be in order for success to visit you.
Finishing what you start.
The rich don’t quit. They stick to something until they succeed, go bankrupt, or die. Eighty per cent were focused on achieving some goals and 55% spent one year or more on one singular goal.
But accumulating wealth is only one part of the equation, and knowing how to grow wealth is only the first step!
Staying rich requires that you forge certain specific habits that ensure the wealth you’ve accumulated does not disappear. Here are a few of the most important Rich Habits that will help you keep your wealth:
Putting your wealth to work.
Putting your wealth to work means investing it wisely in stocks, bonds, real estate and other business opportunities. These investments create additional streams of income that pay dividends down the road.
Setting aside part of your wealth for retirement.
Save 10-20% of the income you make and put that money into long-term retirement assets that you don’t touch until you retire.
Knowing how to grow wealth is great – but are you watching what you spend?
Do you know where your money goes? You should. Tracking what you spend opens your eyes so you may know exactly where your money goes. Tracking your spending allows you to make adjustments to how you spend your money. If you don’t track your spending it can get out of control. This “lifestyle creep” can cause your wealth to disappear over time. Knowing how to maintain wealth is crucial, as anybody can know how to grow wealth, but if you can’t maintain it, then it will soon go!
Avoiding spontaneous or emotional purchases.
Never buy anything on impulse. It is almost always the wrong thing to do. That spontaneous or emotional purchase will lose its lustre after only a few weeks. Then you’re stuck with something you don’t need and that does not generate any income.
Living below your means.
Living below your means keeps you from falling into the trap of lifestyle creep. No matter what good fortune visits you in life, do not change your standard of living. Don’t supersize your life by buying things you really do not need. Live a modest, simple life.
About Mike Coady
Mike Coady is an expat expert based in Dubai and is on hand to help with all of the above and more.
Mike is an award-winning money coach and industry leader in the financial sector.
Qualified to UK Financial Conduct Authority (FCA) standards, a member of the Chartered Insurance Institute, a Founding Fellow of the Institute of Sales Professionals (FF.ISP), a Fellow of the Institute of Directors (FIoD) and featured as a highly qualified Financial Adviser in Which Financial Adviser.
To learn how to choose a great financial adviser, download our free guide.
Blog published by Mike Coady.