When setting a goal, it is beneficial to emulate the strategies of those who have achieved it before. For individuals aspiring to achieve financial success, studying the habits and practices of millionaires and multimillionaires is a logical step.
If you are looking to enhance your financial situation, consider adopting the habits of millionaires.
1. They take care of themselves
The first habit is not directly related to personal finance, but it is important nonetheless. Millionaires prioritize their health. Despite having numerous responsibilities to juggle, they ensure they maintain healthy exercise and sleep routines.
A majority of respondents, 76%, indicated that they engage in physical activity for a minimum of 30 minutes per day, four days a week. Additionally, a significant portion of these individuals, 63%, participate in competitive sports.
Contrary to the common perception of successful individuals as workaholics who sacrifice sleep, a staggering 93% of millionaires reported getting at least seven hours of sleep per night.
Developing healthy habits such as these can greatly benefit both your physical and mental well-being. By incorporating these habits into your daily routine, you can enhance your productivity and reduce your risk of health problems.
2. They automate their savings
The majority of millionaires understand the significance of saving money, with 88% stating that it was crucial to their success. Nearly half of the self-made millionaires surveyed fell into what is known as the Saver-Investor category. This indicates that they accumulated wealth through their disciplined saving and investing practices.
Each millionaire in this group has taken the additional step of automating their savings, consistently setting aside a minimum of 20% of their earnings from each paycheck.
There were three additional categories of millionaires identified: Company Climbers, who diligently worked their way up to a high salary; Virtuosos, who are highly skilled experts in their field; and Dreamers, who wholeheartedly pursued a dream, such as starting a business or pursuing a career in music.
While not all of these millionaires were as disciplined in their saving habits, many of them also automated their savings, similar to the Saver-Investors.
3. They invest and build wealth over time
In addition to saving money, millionaires also invest their money to ensure its growth. This practice is common among all Saver-Investors. Specifically, those who saved 20% of each paycheck typically allocated their savings evenly between employer-sponsored retirement accounts and personal savings accounts.
Individual stocks and mutual funds have been the preferred investment choices for millionaires seeking to build wealth. This preference is justified by the stock market’s historical reliability over extended periods. The S&P 500, which monitors the performance of 500 of the largest publicly traded U.S. companies, has yielded an average annual return of approximately 10%.
As millionaires approach retirement, their focus shifts towards wealth preservation. In order to achieve this, they reallocate some of their assets from stocks to more conservative investments, such as bonds. This strategy allows them to safeguard their wealth and ensure financial stability during their retirement years.
4. They practice frugality
It is almost cliché at this point to mention how frugal millionaires tend to be, but the majority of them are diligent in monitoring their expenses. Achieving millionaire status typically involves a lengthy and deliberate process.
On average, it took the majority of individuals over 20 years to achieve their financial goals, while Saver-Investors took an average of 32 years. The key to successfully saving and investing for such an extended period is through effective management of your expenses.
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5. They’re highly productive
The typical 9-to-5 routine is not the standard for millionaires. They often work well beyond the average, with 73% stating that they put in an average of 58 hours per week. Despite the demanding schedule, 86% of millionaires reported that they genuinely enjoy their work, which undoubtedly contributes to their ability to sustain such long hours.
They demonstrate excellent time management skills by efficiently managing their schedules and avoiding time wastage. An impressive 81% of respondents reported maintaining a to-do list, while 24% also implemented a to-don’t list to eliminate unproductive activities.
It is important to remember that millionaires are often just regular individuals, like anyone else. What sets them apart is their habits, particularly in how they handle their finances and overall lifestyle. By incorporating these habits into your own life, you may find significant assistance in achieving your financial objectives.
