A couple months ago I posted on Millionaire Habits, a list of 13 things Business Insider considered to be traits of millionaires.
In this piece I thought I’d share what I consider to be my personal millionaire habits.
I think it will also be fun for you to share yours in the comments on this post.
Here’s what I consider to be the habits that have helped me become a millionaire:
- I’ve developed many sources of income. It started with growing my career but then expanded into real estate investing and, more recently, P2P lending. Hopefully it will expand to even more options in years to come. I’m currently considering dividend investing.
- I’ve lived below my means. I have lived on much less than I’ve earned, creating a money gap that’s pretty substantial.
- I’ve invested the gap between earning and saving. In addition to the investments noted above, I’ve invested a lot in index funds over the years.
- I’ve done these things for a long, long time. Over 20 years for many of them and over 25 for some.
Those are the millionaire habits that I think really matter.
They are not glamorous. In fact they are the opposite of glamorous.
But they are effective because they are the right things to do and they have one big advantage: time. Time to build and grow over a few decades.
In short, these tips boil down to three things:
And thus the reason this blog is named as it is.
What do you think? Are these the right habits? What would you add or change?
Hi,
I might also add:
– Taking Risks. These need not be casino style but consistent effort to seek a return over the risk free rate.
– Never give up, stray or get caught up in hype. (Think dot-com, subprime or swearing off equity markets)
– Stay diversified. It doesn’t create billionaires, but does grow millionaires.
My 2 bob.
I think it’s also important to add a spending category or philosophy. Of course, spend much less than you earn. But we also like to identify what is important to us to spend money on (travel, health, food) so we can identify monetary goals and see how they fit in the framework of growing our net worth.
Basically I’m talking about looking at our annual budgets every year for these things and examining how they affect our saving and whether we’re spending too much or even too little. For example, we decided to spend more money on higher quality food recently as part of our growing income- we were surprised we were still spending so little despite our income growing so much. It means growing into our income some, sure. But what’s the point of having all this money if you don’t enjoy some of the benefits now?
Marrying a partner with a similar philosophy re spending/saving.
To steel a popular quote
“the road to a million dollars begins with the first dollar earned, saved and invested”
Add in time, risk, focus, diversification and any other number of factors and you will eventually arrive.
I think what you are doing is stellar. It’s not sexy nor glamorous day-to-day but in the long run it makes all the difference. It pains me when friends and relatives do not have their spending under control and do not think that things could ever be any different than living paycheck-to-paycheck or massively in debt. Slow and steady does win the “race”.
We are doing many of the things you are doing and see light at the end of the tunnel.
Would it be worth adding that when you must spend, spend on quality items/goods that more often than not wont lead to repeat purchases? For instance, stay within a budget but purchase the longest lasting vehicles and clothing within your budget even if it means you have to save longer to pay cash for it?
I think there’s one obvious one that needs to be added. Spending!
After a lifetime of earning, saving, investing, don’t forget to spend and live it up! Otherwise, what’s the point of it all?
Sam
totally agree. you need to enjoy it all at one point!
Good list. I agree with Financial Samurai’s addition of Spending, but to a reasonable level that your passive income allows.