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5 Habits That Keep Rich People Rich

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SteveGuest Blogger
May 12, 2016 · 2.7k Views
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Hang around rich people enough and you will begin to notice certain habits that rich people practice that keep them rich. These habits aren't necessarily hard, but they are consistent - and they work well. Habits, both good and bad, can literally make or break us. Develop good ones and you will set yourself up for a lifetime of success.

These five habits practiced by rich people keep them making money and taking control of their lives. How many of these habits do you practice in your daily life?

 

1. Take advantage of opportunities to invest.

There are a lot of opportunities out there in this world. Programs, scholarships and investment avenues are very often available in ways that we simply don't know about, but also in other ways that are fairly common. Perhaps the easiest and most straight-forward investment opportunity comes to us from our employer-sponsored 401k retirement plan. This is an excellent way to both save for retirement as well as reduce your taxable income, and if your company matches a certain percentage of your salary, that match is quite literally free money that will build, with interest, over the years in the market. Do yourself a favor and contribute at least what your company matches. Remember, it really is free money.

Be on the lookout for opportunities and take those that make the most sense. And don't be afraid to ask for opportunities, either. You might be surprised at what is possible simply by asking!

2. Minimize debts and credit card balances.

Rich people almost never carry credit card debt and very rarely hold additional debts that aren't directly related to investments (like real estate, business loans, etc). It is near impossible to get (and stay) rich if your debts get out of control, and revolving high-interest debts or mortgages on large homes destroy your chances at achieving riches.

Instead, use credit more wisely by taking advantage of credit card rewards programs for cash back or discounts on travel. Also, always pay your credit card bills off in full to avoid punishing fees and interest payments. Be smart. In other words, use credit, but don't let credit use you.

3. Stay disciplined and motivated to make more money.

Rich people are not only goal-oriented, but are motivated and remain focused on maximizing their return on every dollar that they spend. It is easier said than done to avoid the temptation to spend money in our society. From television, to radio, the Internet and keeping up with the Joneses, spending money on things these days is just too easy. There will always be an emotional reason to spend.

People who are wealthy break through this phenomenon and keep themselves laser-focused on their goals, both financial and otherwise. They understand that things don't bring them happiness and investments will very often result in beautiful wealth. They focus on their future rather than their immediate and temporary urges, and base their decisions on long-term returns.

4. Spend money wisely.

Rich people are not afraid to spend money - just look at Warren Buffett! But, the difference between spending money wisely and spending money irresponsibly cuts to the heart of why rich people can spend a lot of money, but still be rich.

For example, emotional spending is the worst type of spending that exists. Emotions respect no logical argument, and they are often rash and ill-conceived. However, spending money on a good financial or estate planner, for example, is often money well spent. Spending money on investment opportunities or to shore up limitations in knowledge or experience (like a tax accountant, for example) can easily provide a substantial return on investment. The more tangible the value from spending, the more wise that spending will become.

5. Automate, automate, automate!

Automation makes the process of getting (and staying) rich much, much easier. For example, automatic 401k, Roth and other investment contributions from your paycheck mean that we don't have to lift a single finger when adding to our investment accounts. Every paycheck, let automated processes quietly run in the background to invest your hard-earned money into your future self through retirement and other taxable investments. It's great not having to think about this stuff every two weeks, and automation eliminates temptation!

Even without investments, automated monthly transfers from a checking to a savings account can have a substantial benefit in the future. The key is to make it automatic and not rely on yourself. When it's automated, there is no possibility of "I'll do it later" or "Maybe I won't do it this month." Set it up, then forget about it. Let the system do the work for you. Over time, automation will help to maximize your chances of getting rich.

By following these 5 habits, rich people are able to maintain the wealth that they have accumulated while continuing to see it grow even further. Try to incorporate some of these habits into your own life and see how beneficial they can be.


 

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Steve is a personal finance blogger with a goal of retiring from full time corporate work by 35. Steve can be reached on his personal blog at ThinkSaveRetire.com.

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