Attaining wealth is hard and requires real effort. Below are ten tips to help you develop a wealth mindset based on our client and personal experiences:
1. Wealth is Fleeting
As they say, “easy come, easy go”. Too often we have seen people lose wealth just as quickly as they earned it. Look at those that invested in GameStop (GME) at its highs or other investing fads to see this. Those that typically attain wealth do this over time with great consistency and purpose. Rarely is wealth attained overnight and even more so is it kept if it comes quickly. An interesting study on Lottery winners has shown that it is far harder to keep wealth than it is to earn it.
2. Aim to Have Just Enough
It can be very frustrating trying to earn a specific number before you feel comfortable about retiring. Working with a financial planner can instead help you quantify the “just enough” amount so you can retire. There is so much more to life than just chasing wealth and do not lose sight of other priorities in life.
3. Develop Wisdom and Knowledge
Many wealthy individuals have several common traits. Studies have shown that most millionaires are lifelong learners and voracious readers. They constantly are committed to learning new things, growing, and improving themselves through reading and experience.
4. Have Active Hands
One of my favorite quotes growing up was from my grandfather who said, “Idle hands accomplish nothing”. The meaning of this phrase was to encourage me to find hobbies and pursue passions. According to a study by A.C. Nielsen the average American watches 4 hours of TV a day. This means most people work and then go home to watch TV. Watching TV is not inherently wrong, but those four hours can be spent to increase your health or wealth. Many individuals that have accumulated wealth often have hobbies where they create something. This could be in music, creating art, writing, or fixing cars. But there is a strong correlation between having wealth and having hobbies that stimulate creativity.
5. Don’t Be Fake
In today’s society, it is heartbreaking to see how many people pretend or try to portray that they have wealth. Just go to Instagram and you can see the fake pics taken next to cars they do not own or pretending to be on private jets. Do not be discouraged by the fake perception others have. Remember that life is like a book and do not compare yourself to someone else in chapter 20 when you are on chapter 5. Take time to unplug from social media and remember to take care of yourself.
6. Be Thoughtful About Debt
It is important to try and have as little debt as possible because not having debt provides tremendous freedom and joy. Having debt is like being a prisoner until that debt is paid off. We are not saying that all debt is bad, but just be smart in how you handle your debt and have an emergency fund for those unexpected expenses.
7. Save Constantly
You cannot build wealth unless you are saving. The earlier you save and the larger amount you save the faster you will build wealth. It should go without saying as it is impossible to attain wealth without saving.
8. Change Your Mindset
Most people work similarly with money. They spend first, save second and give (if at all) last. Many wealthy individuals I have worked with have the exact opposite mindset. For them, the mindset is either save first and then spend or often it is giving, saving, and then spending. Develop that mindset by creating healthy financial habits and instill good financial habits into your kids at a young age.
9. Be Generous
The most charitable people I know are also the wealthiest. Psychologically this does not seem to make sense. You would think of the rich being like Scrooge McDuck and only thinking of themselves first. While there are certainly some wealthy people that have this mindset, the majority of people that we work with are generous people and love to share knowledge, time, and resources for the greater good.
10. Be Satisfied
If we do not take for granted what we have and enjoy the small things in life, then life becomes more enjoyable. Being satisfied also helps us to keep things in perspective and not lose sight of what is important. Remember happiness is a choice as we learned.
While none of these tips on their own will make you wealthy, hopefully, they can help you to adopt a wealthy mindset, and this will be a valuable resource for you in life.
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Over the years there have been many studies on the wealthy to find what habits they share. This is important because the reality is our habits shape us and impact our health, wealth, and happiness. Let us explore just a few of the most common habits that have to lead many individuals to become self-made millionaires:
1. They do not follow the crowd – Often these individuals are independent, critical thinkers and do things that go against the grain.
2. They are constantly reading – While most individuals watch hours of tv each day, the rich typically read at least half an hour daily and focus more on education than being entertained.
3. They exercise regularly. – The same habits that are needed for good health like consistency and discipline are also needed to grow wealth, so it is not a surprise to see that they exercise often.
4. They develop and pursue goals – To become a self-made millionaire does not happen by accident. These individuals often dream and set realistic goals to attain their dreams. They are often self-motivated because they are pursuing a passion.
5. They surround themselves with other successful people – As the old saying goes we are the company we keep. Often these individuals seek other like-minded individuals to spend their time with. This allows them to consistently learn from and motivate each other.
6. They get up early – For many people this is quite painful and again an example of how millionaires tend to not follow the crowd. Getting up early is a great life hack. It provides more opportunity to prioritize your day and allows you to accomplish important tasks (like reading and working out) without disruption.