According to the Rich Habits study by James Corley, being rich and staying rich is a rather straightforward process – it is all down to one’s everyday habits, both with money and in daily life.
Working with high-net individuals I can corroborate with this study – the super wealthy do things differently than most people, but this isn’t to say that these behaviours cannot be picked up and practiced by anyone. Here are the habits of the super wealthy that everyone should follow.
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1. They save
There is no such thing as becoming rich quick. Most millionaires are past the age of 50, so don’t worry if you haven’t made it by the time you’re 30. However, accumulating wealth takes time and you will find that high-net-worth individuals have started saving a long time before they become wealthy. The majority put away 20% or more of their income a month, so this is a good place to start.
2. They plan long term and set goals
The money-savvy build goals around each of their dreams, making them easier to obtain as a step-by-step process. They are not quitters and will focus on achieving their goals until it is a success, or not. The same goes for investing their money – they tend to invest for the long term and can compartmentalise their investments, knowing what they need the money for when.
3. They take calculated risks
Generally, high-net-worth individuals are entrepreneurial by nature and have a higher risk tolerance than the average person. Once they have wealth they make sure they retain and grow it by taking calculated risks. This means they do their own homework when making decisions and understand the variables involved when taking risks.
4. They live below their means
The second richest man in the world, Warren Buffett, still lives in the same house as he did before he became a billionaire. This is a common trait of the super wealthy. Living below your means keeps you from falling into the trap of overspending and having your wealth disappear. No matter what good fortune visits you in life, do not change your standard of living too drastically. Tracking exactly what you spend your money on is a good place to start so that you can make adjustments where necessary.
5. They understand the value of advice
You will never see a millionaire basing their investment strategy solely on articles they have read on the internet or something they may have heard on the radio. They understand the value of professional advice and trust the specialism of their advisor. Often, they will have an advisor for each area of their money – whether it be tax, wills or investments. However, in my experience, they are not afraid to challenge advice based on their own knowledge and hold advisors accountable.
By James Ferguson, Senior Financial Planner, Guardian Wealth Management
