Do you want to be rich? Most people do. But building serious wealth doesn’t happen by luck or magic
. The truly rich people all share certain habits and mindsets when it comes to earning, saving, and investing money.
If you study and copy the habits of the wealthy, you too can put yourself on the path to financial success and freedom.
Here are 7 key habits that rich people cultivate:
1. Live Below Your Means
This is rule number one for building wealth over time. Rich people avoid spending every last penny they earn. Instead, they live relatively modest lifestyles, well within their means.
Living below your means means spending less than you earn each month and year. You budget carefully and make room for consistent saving and investing, in addition to covering necessities.
While rich people absolutely enjoy nice things, they avoid flaunting excessive luxury that drains their wealth. Things like owning multiple mansions or a garage full of exotic cars are the exception, not the norm among the wealthy.
2. Pay Yourself First
Financially successful people make saving and investing a top priority. They “pay themselves first” before spending money on anything else each month.
This means automatically transferring a set percentage of their income into savings and investment accounts right when they get paid.
That way, they ensure their future financial goals are funded before they can even spend that portion of their income.
Creating this automated system makes consistent saving and investing a habit that happens without having to think about it each month.
Over decades, this habit allows their net worth to continue compounding powerfully.
3. Invest for the Long-Term
Speaking of investing, the wealthy understand that it takes patience and a long-term outlook to build a massive portfolio over time. They invest continually through ups and downs, without panic selling during market crashes.
Rather than gambling on speculative get-rich-quick schemes, wealthy investors build low-cost, diversified portfolios designed to grow steadily over decades.
They take advantage of dollar-cost averaging and let compound growth work its magic.
Whether investing in stocks, real estate, owning a business, or other assets, the rich maintain a big-picture perspective. Short-term losses don’t scare them out of their long-term investing strategy.
4. Make Their Money Work for Them
The wealthy understand that the highest form of income is when your assets generate income for you. Rather than just trading time for money through earned income, they build sources of passive and portfolio income.
This could come from real estate rental properties, interest and dividends from investments, owning parts of successful businesses, royalties from creative works, and more.
Their income-producing assets create a steady stream of cash flow.
Meanwhile, the middle-class tends to depend entirely on earned income that requires continuous hard work.
The wealthy progressively shift towards having their accumulated assets and investments do the heavy lifting for them financially.
5. Invest in Themselves
Self-made wealthy individuals understand the importance of continual self-improvement, learning, and personal growth. They actively invest in activities and education that increase their value and income-earning potential.
This could mean taking courses to upgrade skills for their career. Or reading books and studying successful people to improve business, investing, and wealth-building knowledge. Physical, mental, and emotional self-care also falls into this category of personal investments.
By consistently upgrading their human capital over time, financially successful people ensure their income can continue growing throughout their working years and career.
This allows them to save and invest more each year as well.
6. Stay Out of Debt
You’ll be hard-pressed to find a wealthy person with high-interest consumer debt like credit card balances, auto loans, payday loans, and so on. That’s because those debts siphon off money towards interest payments, preventing you from building wealth.
The financially successful avoid the cycle of debt by saving for large purchases, living within their means, and delaying gratification when needed.
When debt is needed for an appreciating asset like a mortgage or business loan, they maintain affordable levels.
Rather than letting debt own them, wealthy individuals strive to maintain control and own assets that create income streams for them. Avoiding problematic debt is a cornerstone habit.
7. Keep Creating More Income
Even if you’re already wealthy, the most successful people don’t just sit on their assets while fully retiring young. Instead, they keep working and creating more income in some capacity, whether that’s through a business, career, investing, or elsewhere.
This final wealth habit relates back to the first one about living below your means. No matter how much money you have, continuing to live frugally while earning more allows you to save and invest more. It prevents lifestyle inflation from eating up all your gains.
The wealthy understand that building a fortune is a continual process of earning, saving, and investing over decades. So they maintain an industrious, hard-working mindset and keep building income streams until very late in life.
Start Your Own Habits Today
There you have it – seven key habits toModel your financial behaviors after the wealthy if you want to join their ranks.
Building serious wealth rarely happens by chance or luck. It’s the result of very intentional, disciplined habits maintained over many years and even decades.
Fortunately, the habits needed are straightforward and reasonable. With patience and consistency, replicating these simple but powerful money habits can put you on the path towards financial independence and success.
While getting rich overnight is extremely unlikely, diligently practicing habits like living below your means, saving a good portion of your income, investing for the long-term, and making income from your assets can make you wealthy over time.
The choice is yours to emulate the wealthy and commit to these habits starting today. The sooner you start, the sooner you’ll reap the rewards of financial freedom and security. What are you waiting for?