Intelligence, talent and charm are great, but more often than not these aren’t what separate the wealthiest among us from the poorest. Instead, the differences are in our daily habits. Habits are neural pathways stored in the basal ganglia, a golf ball-size mass of tissue right in the center of our brains, in the limbic system. However, we all know there are good habits and bad habits. I spent years studying the difference between the habits of our country’s rich and poor, questioning hundreds of individuals. On the rich side, these were people with annual gross income north of $160,000 and net liquid assets of $3.2 million or more. I defined the lesser-off as those with gross income of $35,000 or less and no more than $5,000 in liquid assets. My ensuing book became a sort of instruction manual for how to become wealthy.
The gulf between Rich Habits and Poverty Habits is staggering. Some of the differences between rich and poor are obvious, while others are a little more surprising. Here are the most important Rich Habits you can take up to reach and maintain your wealth potential.
1. Live within your means.
Wealthy people avoid overspending by paying their future selves first. They save 20 percent of their net income and live on the remaining 80 percent. Among those who are struggling financially, almost all are living above their means. They spend more than they earn, and their debt is overwhelming them. If you want to end your financial struggles, you need to make a habit of saving and budgeting what you spend. Ninety-four percent of the wealthy buy instead of leasing. These folks keep their cars until the wheels fall off, taking great care along the way so that they save money in the long run. Stay away from accumulating credit card debt. If you are doing this, it’s a clear sign that you need to cut back somewhere. Try to stash six months of living expenses in an emergency fund in case you lose your job or your business goes belly-up. Contribute as much as you can afford to a retirement plan. Always take that free money when you can get it.
2. Don’t gamble.
Wealthy people do not rely on random good luck for their wealth. If you still want to bet after knowing the risk, use money from your entertainment budget.
3. Read every day.
The reason successful people read is to improve themselves. Comparatively speaking, only one in 50 of those struggling financially engages in this daily self-improvement reading, and as a result the poor don’t grow professionally and are among the first to be fired or downsized.
4. Forget the boob tube and spend less time surfing the internet.
Two-thirds of wealthy people watch less than an hour of TV a day and almost that many 63 percent spend less than an hour a day on the internet unless it is job-related.
5. Control your emotions.
Not every thought needs to come out of your mouth. Not every emotion needs to be expressed. When you say whatever is on your mind, you risk hurting others. Conversely, 94 percent of wealthy people filter their emotions. They understand that letting emotions control they can destroy relationships at work and at home. Wait to say what’s on your mind until you’re calm and have had time to look at the situation objectively. Fear is perhaps the most important negative emotion to control. Any change, even positive changes such as marriage or a promotion, can prompt feelings of fear.
6. Network and volunteer regularly.
You’ll build valuable relationships that can result in more customers or clients, or help you land a better job if you spend time pressing the flesh and giving back in your community. Developing personal relationships with these folks will often result in future business relationships.
7. Go above and beyond in work and business.
Wealthy individuals, on the other hand, make themselves invaluable to their employers or customers, writing articles related to their industry, speaking at industry events and networking. Successful people work hard to achieve the mutual goals of their employers or their businesses.
8. Set goals, not wishes.
You cannot control the outcome of a wish, but you can control the outcome of a goal. Every year, 70 percent of the wealthy pursue at least one major goal. Only 3 percent of those struggling to make ends meet do this.
9. Avoid procrastination.
Successful people understand that procrastination impairs quality; creates dissatisfied employers, customers or clients; and damages other nonbusiness relationships. Here are five strategies that will help you avoid procrastination:
- Create daily “to-do” lists. These are your daily goals. You want to complete 70 percent or more of your “to-do” items every day.
- Have a “daily five.” These activities represent the crucial things that will help you get closer to realizing some major purpose or goal.
- Set and communicate artificial deadlines. There’s nothing wrong with finishing early.
- Have accountability partners. These are people you team with to pursue a big goal. Communicate with them at least every week, and make sure they hold your feet to the fire.
- Say a “do it now” affirmation. This is a self-nagging technique. Repeat the words “do it now” over and over again until you begin a task or project.
10. Talk less and listen more.
Wealthy people are good communicators because they are good listeners. They understand that you can learn and educate yourself only by listening to what other people have to say. The more you learn about your relationships, the more you can help them.
11. Avoid toxic people.
If you want to end your financial struggles, you need to evaluate each of your relationships and determine if they are a Rich Relationship or a Poverty Relationship. Start spending more and more time on your Rich Relationships and less on your Poverty Relationships.
12. Don’t give up.
Those who are successful in life have three things in common: focus, persistence and patience. They simply do not quit chasing their big goals. Those who struggle financially stop short.
13. Set aside the self-limiting beliefs holding you back.
Rich people have good luck and poor people have bad luck. I’m not smart. Almost four out of five wealthy people attribute their success in life to their beliefs. Change your negative beliefs into positive affirmations by reading lessons from the greats of personal development, like Napoleon Hill, Dale Carnegie and Jim Rohn.
14. Get a mentor.
Among the wealthy, 93 percent who had a mentor attributed their success to that person. Mentors regularly and actively participate in your growth by teaching you what to do and what not to do. Finding such a teacher is one of the best and least painful ways to become rich. If you know your goals, find someone who has already achieved them. You’ll be amazed by how many people want to lend a helping hand.
15. Eliminate “bad luck” from your vocabulary.
Those struggling financially in life have a way of creating bad luck for themselves. Conversely, successful people create their own unique type of good luck.
16. Know your main purpose.
It’s the last Rich Habit, but it might be the most important. Because they love what they do for a living, they are happy to devote more hours each day driving toward their purpose. Odds are, if you are not making sufficient income at your job, it is because you are doing something you do not particularly like. When you can earn a sufficient income doing something you enjoy, you have found your main purpose. Believe it or not, finding this purpose is easy. Make a list of everything you can remember that made you happy. Total the two ranked columns. Aim to take up all 16 of these habits, and you’re almost guaranteed to become better off.
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