8 Money Habits of The Rich

8 Money Habits of The Rich

8 Money Habits of The Rich: The Powerful Habits

So much of the uncertainties that cause by the coronavirus epidemic, economy unstableness and death toll worldwide are worrisome. Hopefully, the coronavirus epidemic will be gone soon and the numbers of casualties will be reduced and not increasing daily. Economically affected countries can slowly back to the operations again.

Despite reading the unfortunate news, as investors, we read more and research more.  Here I stumble upon a good article from Thinkorswim. There are some good reminders about the behaviors of the wealthy: 6 Powerful Habits. There are very inspiring and powerful.

Each year investors will gather in Omaha, Nebraska to meet up and share the experience of investing. It also an opportunity to meet Warren Buffet, the 3rd wealthiest person in the world, to share his tips and advice on investing.

Learn how to safeguard your money and what are the habits of the rich here with great investors’ advice.

#1. Don’t think working for people is your only income source

Some people are never made more than $60,000 to $70,000 a year, adopt the habits of the rich, they are able to manage their money well, by saving up and place at the right place for it to grow.

They save actively and invest early and stay invested for the long term.

Hypothetically, if everyone’s wealth is combined and split equally to each of us, very soon the rich will make back their money, and make more, whereby the poor will become poor again due to not able to handle the money well. It is all because of the money habits of the rich, the powerful habits.

Let’s see what the rich do to stay wealthy.

#2. Always allocate money for your longterm goal

Financially educated people will tend to save a portion of their paycheck. That’s the most important thing to do first to reach their financial freedom goal. They will have a ready emergency fund for unexpected events, followed by settling bills for daily life. They spend frugally so that there are able to put money into hard work, investment.

Screen through monthly spending, minimize your budget, spend wisely. Everyone will be able to be rich if you plan for it.

“Do not save what is left after spending; instead spend what is left after saving.”― Warren Buffett

#3. Start early and trust the compounding system

Wealth is able to accumulate with a good plan. The earlier we start the sooner we will reach our financial goal.

Understand the power of interest compounding system, you will have a more measurable early retirement goal.

Prioritize daily activities that will help to improve your personal finance and investment knowledge. Study and understand what you do, keep track of the investment you do, review your investments from time to time.

There’s no one-time-get-rich-fast-scheme here, that you think that you can be one in a million. Hard work plays a big role.

#4. Know what you do, do what you know

Investment and risk go hand in hand. What we can do is to do what we can to minimize risk. Understand the business, how much risk you can take, watch your emotions. Confidence build from researches, facts, and numbers.

Once you have done enough heart work, risks are much lower with the facts and information you found. Keep learning and testing the strategy you have, see the short term result, review it from time to time, decide to continue or stop the loss.

Emotions play a part, observe it and understand your stressfulness threshold.

It’s a good idea to review past mistakes before committing new ones. So let’s take a quick look at the last 25 years. -1989 letter

― Mark Gavagan, Gems from Warren Buffett – Wit and Wisdom from 34 Years of Letters to Shareholders

#5. Budget-driven

Wealthy prefers buying experience than physical items. Education is worth spending on.

Only buy things that you need. Once in a while, you can buy the things that you like. Always set a budget to prevent overspending. The wealthy will always have more than one option, several prices to decide from.

Understand the difference between price and value. Always go for valuable things at a discounted price (if possible)

Price and value can differ; price is what you give, value is what you get.

― Mark Gavagan, Gems from Warren Buffett – Wit and Wisdom from 34 Years of Letters to Shareholders

#6.Keep learning

Getting more educated is the key to success. Do a lot of reading, research and stay open-minded to new age information.

According to Thomas Corley, author of “Rich Habits: The Daily Success Habits of Wealthy Individuals,” 67% of the rich watch TV for one hour or less a day. Only 6% of the wealthy watch reality shows, he wrote, while 78% of the poor do.

Corley, a CPA, and CFP found that 86% of the wealthy “love to read,” with most of them reading for personal self-improvement.

#7. Sleep well, eat well and work out

Successful people believe that everyone has an equal amount of time. They plan ahead activities that they want to do and start early. They watch what they eat and work out to stay healthy.

According to Corley, 57% of wealthy people count calories every day, while 70% eat fewer than 300 calories of junk food per day. Some 76% do aerobic exercise at least four days per week.

#8. Have a plan is always better than none

You might think you are not making a lot of money, and it’s hard to have a good game plan. But as long as you are making money, you can plan for your money. Start saving your penny, even it is just a penny. Keep searching for ways to invest, when the right time comes, your savings will be able to work hard for you.

Takeaways: 8 Money Habits of The Rich

  • #1. Don’t think working for people is your only income source
  • #2. Always allocate money for your longterm goal
  • #3. Start early and trust the compounding system
  • #4. Know what you do, do only what you know
  • #5. Budget-driven
  • #6. Keep learning
  • #7. Sleep well, eat well and work out
  • #8. Have a plan is always better than none

Feel free to leave me some comments, let me know why is it hard for you to start? I can give you some ideas! Meanwhile please take care and stay away from crowds.

Stay clean and sanitize.

12 Comments

  1. As well as being good habits for those who want to accumulate material and monetary wealth, I think these are pretty good habits to have for a healthy life too, especially focussing on the long rather than the short-term, keeping learning throughout life and the advice to sleep well, eat well and work out. Making time for yourself is really important, no matter what you want to do or whether you want to be materially rich.

    • I think we all should have a better money mindset. Money can do evil or it can do good deeds. We don’t have to be rich, but we are always able to help others by sparing a little. 🙂 Stay optimistic!

  2. Many thanks to you for sharing such an excellent article with us .Money Habits of the Rich is a very worrying and powerful practice .Wealthy people are better able to manage money, by saving and putting it in the right place to grow .They invest money differently .The rich always shoot the money for the long-term goal of staying rich, trusting the compound system, building confidence, getting enough rest, etc. Through your article I learned about one of the wonderful things the rich have done to detail how to do it and hopefully everyone will know and share their new experience with you soon.

    • Yes, understand ourselves more is important. So that we know how much stress and risk we can take, we have different ways to manage our money. Everyone’s upbringing is different, we all understand money differently. It is good to learn from successful people and what is their habits of managing their personal finances. Continue learning!

  3. Hello, I really want to first appreciate your effort in putting this great website together and writing this article. I have never been more enlightened and inspired like this in a long while. Your explicit tips will really help me moving forward as I try to establish my online business. I think this article is well researched and should be shared to other platforms 

  4. Hi and thank you for you to sharing your ideas. I love the content that’s coming out of it. I am pretty much into investing as well and i have to say at the beginning of the journey I was pretty much scared and made a few mistakes. What was my biggest problem at the beginning besides that fear, was that i did the opposite to what Warren Buffet was suggesting , I spent first and then saved, terrible, if I realise how much money I lost already…But on the other side, I am glad it happend, because I might easily did not move the letter if I would not fail at the first. Not I learned on that( which is by the way taking care of any unexpected outcomes and now I can proudly say I am not having financial issues, NEVER, in none moment and I am not earning so much more than before) and I am overcoming my fears and starting investing in riskier(but with higher chance of profit) platforms. Very good, useful and helpful article, thank you !!

    • Yes! We must go through the learning curves journey. The more we do, the more experience we will be and eventually we will be familiar with the habits we used to be unfamiliar with. Keep that up! thanks for dropping me a message.

  5. I think that these 6 points that you collect here are fundamental in the way to be able to create wealth to a certain important point, and I do not think that any of them is more than the other, we must get to work on them as soon as possible, and each step will be closer of our goals.

  6. This was I am looking for this is what I am doing daily I started this year and I have a passion that I can reach my goals successfully, yes we are in a situation that our business just freezes for some week but this is not for the life this will be gone just we have to remember to keep going and don’t stop.

    Good post keeps doing what are you doing.

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