Most wealthy people didn’t get that way because they were lucky. In fact, the average rich person possesses money habits that most people balk at using in their own financial lives. But when it comes down to it, to become financially rich it takes excellent habits and financial discipline if you want to build wealth that lasts. In today’s article, I’ll show you many of the top habits of wealthy people and why they work. They’re not only common knowledge among most wealthy individuals, but they’re also proven by scientific research!
At the end of each section I’ll share with you what I’m personally doing in that area and give myself a score. You can give yourself a score for each section too. At the end, you can add up your score and see how you’re doing at developing wealthy habits.
The Millionaire Next Door
The average millionaire looks a lot different than most people would imagine. When we think about wealthy people, most of us tend to think about famous singers, talented athletes, or CEO’s of large companies.
The reality is that the average millionaire looks nothing like we tend to imagine. In fact most wealthy people look just like you and me (and probably live in your neighborhood too!)
The Proof is in the Research
Dr. Thomas Stanley was a researcher who studied wealthy people and their habits. In his extensive research, Dr. Stanly discovered some surprising habits of the wealthy that on the surface seem counterintuitive to most of us. But once you understand the habits of wealthy people, you’ll totally get why they’re rich and most of the rest of us aren’t.
Dr. Stanley wrote several awesome books about the habits of wealthy people, and how those wealthy habits can make you rich too. You can check them out below.
The 7 Habits of Wealthy People That Will Make You Rich Too
Most of us confuse earning a high income with being rich. However, in his studies, Dr. Stanley shows that there are tons of high income families that live paycheck to paycheck just like average earners.
They don’t practice the wealthy habits you’ll find below. In fact, they’re on the financial edge, only one or two paychecks away from bankruptcy.
Rich People Don’t Always Earn a High Income
The interesting thing though, is that you don’t have to be a high-income earner to become wealthy. Even if you have an average income, when you practice the good financial habits below, you will eventually become wealthy too! It’s not about the income, it’s all about practicing wealthy habits over the long term.
So, without further ado, here are the habits of wealthy people that will make you rich too!
In each section I’ll also tell you what I’m doing to build wealth. I’ll assign myself a personal score (1-10) for each section. Follow along and you can keep score for yourself to see how well you’re doing at keeping wealthy habits in your own life!
Wealthy People Value Financial Security Over Status
Wealthy people would rather have money in the bank than expensive cars and brand name consumer goods. They would rather live in an average house in an average neighborhood instead of a high status neighborhood where they will feel pressure to keep up with the Joneses.
Wealthy people don’t care so much about what other people think. They’d much rather have financial freedom and security over fancy consumer goods and social status.
What I’m doing: I’ve always valued financial security more than status, although I do like to have nice things (within reason). We live in a large house, but the mortgage payment isn’t outrageous. On a rare occasion we will purchase something fancy and expensive, but we always save up and pay cash when we do.
My score: 7
Wealthy People Drive Used Cars
This is one of the more surprising habits of wealthy people. Most would assume that rich folks tend to drive brand new cars with name brands like Lexus, Infiniti, Tesla, and such.
But the complete opposite is true. The average millionaire drives a car that’s a few years old and was bought used. They tend to drive mid-level brands like Ford, Chevy, Toyota, and Honda.
Rich People Don’t Finance Cars
Another wealthy habit related to cars is that wealthy people don’t usually finance or lease a vehicle. They save up and pay cash for their cars because they know financing or leasing is a bad deal.
Even if you have a low income you can afford to pay cash for your cars. I wrote an article about it a while back that shows you how, which you can find here.
What I’m doing: We’ve paid cash for our last 3 cars. We always buy high quality used cars and drive them till the wheels fall off.
My Score: 10
They Don’t Increase Lifestyle
People who build wealth also know that when they get a raise, they don’t increase their lifestyle to match it. Unlike Joe Average, they know a raise is not an excuse to get a bigger house, a car payment, or more fancy stuff.
Wealth builders put their raises into savings and investments so their money can make more money.
What I’m doing: Over the last few years Angie and I have started making a lot more money. We’ve resisted the temptation to increase our lifestyle. Although this year we took a nicer vacation than usual, our day to day life is no different.
My Score: 9
Wealthy People Invest Their Money
People who are not building wealth tell themselves they will start investing:
- When they get their next raise
- Next year
- When they get out of debt
- Once they get the house paid off
- And a million other excuses
Wealthy people don’t make excuses when it comes to investing. They develop the financial discipline to consistently put money into investments, even during lean times.
They educate themselves about investing and how to put their money to work earning interest and dividends instead of stuffing it in a savings account or under the mattress.
What I’m doing: We put some money into investments every month, but not as much as we’d like. We have 2 kids in college (we’re paying cash) so we’re putting investments on the back burner for now. Once the kids are out of college, we should be able to put 40-50% of our after-tax income into savings and investments.
My score: 6
Willing to Take Financial Risks
Another habit of wealthy people is that they are willing to take financial risks, as long as the risk is worth the reward. They don’t gamble on stocks or other investments with long odds.
Most people who don’t build wealth tend to be too conservative if they invest at all. These people invest in things such as savings accounts, CD’s, and other investments that have very low risk of losing their money, but have terrible returns.
However, wealth builders consider riskier investments if they believe they will get a good return on their money without the potential of losing the entire investment. Some of their favorite investments are individual stocks, businesses, and income generating real estate.
What I’m doing: I have several low risk investments such as mutual funds and real estate. However, I do have some investments that carry more risk. I’m invested in a few individual stocks and getting started investing in cryptocurrencies (Bitcoin, Ethereum) as well. I also have an opportunity to invest in a bank startup but haven’t decided whether to invest yet.
My Score: 8
Wealthy People Spend Less Than They Earn
I believe spending less than you earn is one of the most important habits of wealthy people there is. There is no way you can build wealth if you consistently consume every dollar you make.
People with wealthy habits understand that living a reasonable, frugal lifestyle is key. Living on less than you make allows you to have money to set aside for wealth building activities.
What I’m doing: We consistently do a written budget and always live on less than we make. This is a wealthy habit we’ve been doing for years, even when our income took a huge hit during the recession a few years ago.
My Score: 10
They Teach Their Kids Well
Wealth builders also teach their kids good wealth habits. They teach them how to handle money, invest, and start money making businesses so they too can become financially independent someday.
Just as important, their kids don’t come back home to roost or depend on parents to prop up their lifestyle. Once the kids leave home they’re expected to go out and earn their own way without depending on mom and dad’s constant financial help.
What I’m doing: We’ve taught our kids well. Both have paid cash for their own cars with no help from mom and dad. Both are working during school to make their own spending money. My son just moved off campus into an apartment and started paying for his own groceries without me even asking (sweet!). I’m confident both of our kids are developing habits of wealthy people and will continue to do so.
My Score: 9
Do You Have the Habits of Wealthy People?
Developing wealthy habits takes time, so if you have a low score, don’t be discouraged! It’s taken me most of my adult life to develop the habits of wealthy people.
At this point in my life I’m still not wealthy, but I’m well on my way. I just have to continue the wealthy habits I’ve developed and eventually I’ll be financially independent.
My score is 55.
So how did you score?
0-35 You have a lot of work to do.
35-45 You’re doing a couple of things right, but need some help.
45-55 You’re well on your way to wealthy habits!
55-70 You’re rockin’ wealthy habits! Gates and Buffett would be proud!
If your score is low, don’t fret! Just continue seeking out ways to improve your habits. Eventually you’ll develop wealthy habits that you can be proud of!
What habits of wealthy people are you working on right now? Where could you use some improvement? Leave a comment here or on our Facebook page and let us know.