How do rich people get rich? You may think that they’re born into wealthy families and inherit their money (the vast majority of them don’t), they’re privy to some secret skills or knowledge that the rest of us aren’t, or their fortunes turn on sheer luck. But none of that is accurate, as the rich people achieve success – including financial abundance – as a result of the daily habits they employ.
Here are 20 habits of the rich that poor people don’t have:
1. They start early
We’re not talking about starting their day early (although rich people do that, too), but the habit of starting to manage their finances early in life. That includes saving young (when their friends are blowing money), investing, and enrolling in an IRA or other retirement plan. Rich people understand the time-value of money and the magic of compounding, and use it to their benefit.
Wealthy people ensure that their finances run smoothly, efficiently, and always on time by automating. That includes online banking to monitor balances, auto-pay features on any bills that allow it, and even automatically contributing savings from their paycheck.
3. Pay cash – or pay down your credit cards if you use them
The best tool to help you live within their means is to pay cash for most purchases. Studies show that people pay about 20-40% less for every trip to the mall or the grocery store when they pay cash, including avoiding impulse purchases. When they do use credit cards and debt, wealthy people have a plan to pay it off or down immediately that month, which also helps them improve their credit score
Surprisingly, research shows that 63% of Americans don’t even have a monthly budget! How can they successfully manage their money, savings, and investments if they don’t even know how much is coming in and going out? They can’t, of course, and that’s why rich people always have a detailed budget – that they actually monitor on a regular basis.
5. They have clear goals
Studies show that the single most important benchmark of achievement is creating clear goals, committing them to writing, and holding yourself accountable to them. That’s exactly what rich people do with money, as they set clear, quantifiable, and measurable financial goals, whether it’s with income, savings, their 5-year plan, etc.
Rich people don’t just write out their goals and then hide them away in a drawer, never to be seen again. Instead, they check in with their progress and growth frequently. In fact, 62% of rich people say they focus on their goals every day, versus only 6% of poor people who say the same!
6. They’re constantly educating themselves
One of the most powerful habits of the rich is that they constantly are looking to learn, develop and grow. To that end, they fill their day with educational podcasts, reading, and self-development. Consider that 86 percent of wealthy people love reading daily, compared to only 26 percent of poor people. It’s not just entertainment fiction they’re reading, either, with 88 percent of rich people read for self-improvement at least 30 minutes per day versus only 2% of poor people.
Additionally, the rich make good use of their down time, as 63 percent listen to audio books or podcasts on their commute to work, while only 5 percent of poor people do the same.
7. They block their time
Rich and successful people make sure that they use their time wisely and efficiently. They do that by blocking out time for different tasks and jobs and then sticking to that schedule. That way, they can prioritize the most important and fruitful tasks every day, and work through them proactively without distractions or multitasking – not reactively, like most poor people do.
8. They network
It’s not what you know but who you know, the saying goes, and that’s essential advice for wealthy people, who constantly network, form relationships, and surround themselves with mentors and other positive, motivated people. Whether it’s getting a better job, learning how to invest wisely, or get new clients, your net worth equals your network, and rich people take that very seriously!
9. They control their own destiny
No matter who they are, where they’re from, or how they accumulated their wealth, rich people have one thing in common: they take charge of their own lives. While the victim’s mentality is much more prevalent among the poor, rich people truly believe that they can impact their own destiny. Therefore, their success if a foregone conclusion – not just a pie in the sky wish. Maybe that’s why 77 percent of poor people play the lottery regularly, compared to only 6 percent of the rich.
10. Rich people choose to get paid based on results – not time
This is fascinating; people who end up well off usually do so by betting on themselves, and that includes focusing on getting paid for results, not just their time. So instead of lounging, lazing, and lollygagging through the day or staring at the clock, hoping time goes by quickly, they’re incredibly motivated to be as productive as possible, and do quality work in the process.
Look for part two of this blog with 10 more habits of the rich!