I became a millionaire at 35, and since then, I have interviewed a lot of millionaires. Over 200, in fact. And while each millionaire has their own unique story to tell, most of them share traits common to all of them. You might be surprised at what some of these are.
Here are 12 habits that each millionaire has.
They Didn’t Inherit Their Wealth
Contrary to popular opinion, most millionaires don’t inherit their wealth. This has been proven time and time again across multiple studies and research from a variety of universities and financial experts. More on this in the last slide, so keep going.
For now, understand the majority of millionaires earned it.
Millionaires Are Laser-focused
Becoming a millionaire doesn’t happen by accident. The “build it, and they will come” philosophy doesn’t work, at least for most. Instead, millionaires are millionaires because they go after it. They work hard (and smart) in well-paying jobs and build wealth by controlling their expenses and investing in their future. Don’t have a well-paying job? Don’t worry. It’s not required.
We will talk about that next.
Income Does Not Equal Wealth
A high salary won’t automatically make you a millionaire. Someone with a $100,000 salary who spends $80,000 yearly isn’t building much wealth. Instead, they’ve designed a lifestyle so expensive that they’re handcuffing themselves to working a job for the rest of their lives.
This is called the “golden handcuffs.”
Health > Wealth
Millionaires understand that poor health destroys wealth. No amount of money can buy back lost time or restore ailing bodies to their former vitality. A person in good health possesses the greatest wealth – the ability to enjoy life to its fullest, pursue their passions, and build meaningful relationships.
Health is the foundation upon which all other achievements are built, enabling us to savor life’s precious moments.
Family Is Everything
We always hear stories about millionaires who put their jobs before their families. While this does happen, it’s the exception rather than the norm (because those make good news stories). Millionaires understand that their families help them build wealth. They give them a reason to keep working hard and earning money to provide for their family.
To most millionaires, family is a critical component to building wealth.
Spend Money To Make Money
Spending money to make money is the cornerstone of wealth. Millionaires use money to buy assets like stocks and real estate, and those assets tend to make money over the long run.
Consider investing in assets that generate passive income, such as stocks, real estate, or dividend-yielding investments, as they can offer long-term financial stability. And don’t underestimate the importance of hiring competent professionals or outsourcing tasks that can free up your time to focus on income-generating activities.
Pay Themselves First
Millionaires don’t budget. They pay themselves first.
This money philosophy involves setting aside a portion of your income for savings or investments as soon as you receive it, treating it as a non-negotiable expense. Doing so ensures that you consistently save or invest money before spending it on discretionary items or bills. This proactive approach fosters a healthy savings habit and allows you to build a financial cushion or work towards your long-term financial goals, such as retirement or purchasing a home.
Assets Over Things
All that stuff in your closet (and garage) used to be cash. Now, all that cash has turned into depreciating assets you don’t use. It happens to all of us (yes, including millionaires).
Millionaires devote at least 20% of their income to their investments. This means $1 out of every $5 is spent on income-generating assets in the market. Assets build wealth. Stuff removes it.
Most millionaires use automation to make this process easy.
Invest More Than 10%
For several reasons, investing just 10% of your income is no longer enough to secure your financial future. Firstly, it often fails to keep pace with the rising cost of living and inflation, eroding your savings’ real value over time. Secondly, it limits your ability to use compounding interest, a powerful wealth-building tool that requires consistent and substantial contributions to maximize its benefits. Thirdly, unforeseen emergencies or expenses can quickly deplete your savings if you only set aside a small fraction of your income.
Invest at least 20% of your income.
Switch Companies Regularly
Company loyalty is overrated, and the numbers prove that those who switch companies regularly make more money in their careers than those who stay.
By exploring new opportunities, employees can negotiate higher salaries and better benefits, especially if they possess valuable skills or experience. Additionally, different companies may offer more generous retirement plans, stock options, or performance-based bonuses, which can significantly boost long-term wealth accumulation.
Investing In Self-Improvement
Millionaires spend lavishly on improving themselves. No, I’m not talking about expensive suits or bling but about education, health, skills, and experiences. Hiring a personal trainer to design a workout program is a great example of self-improvement. So is going back to school, taking a class at a local community college, or getting certified in a new skill.
Millionaires know that the buck stops with them, literally and figuratively. The stronger and more confident they are as people, the more money they stand to make.
Becoming a Millionaire Is a Mindset
Wealth is not just about accumulating riches; it’s about embracing a mindset, adopting a relentless work ethic, and building a thirst for knowledge.
Studying millionaires shows us that the path to prosperity is paved with resilience, innovation, and unwavering determination. So, whether you aspire to join their ranks or simply seek to improve your financial well-being, remember the invaluable lessons these millionaires have imparted: the power of dreams, the value of hard work, and the importance of never giving up.
What About Inheritance?
The vast majority of millionaires earned their wealth. They weren’t just born into it.
For instance:
- Fidelity found 88% of millionaires are self-made
- Cato said “most millionaires inherit their wealth” is a myth
- WealthX found 68% of wealthy people earned it themselves
- Dave Ramsey found 21% of millionaires inherited an inheritance, and of those, only 16% inherited more than $100,000
Inheritances for most don’t last long. According to the New York Times, most people who inherit money get about $50,000. And a significant portion spend it, donate it, or simply lose it.
If you think getting rich is about luck, you’d be wrong.
