It’s amazing how rich people, even if you take away their money, can return to being wealthy in a matter of time. How do the rich and successful do this?
This guide will help us understand the excellent money habits of wealthy people and the discipline behind their success.
We can definitely learn a thing or two from them and copy these habits to gain financial freedom!
1. Grow Your Savings
Every penny counts, and yes, it matters to the rich that they are able to grow their savings every opportunity they get.
What’s the trick? Every time they have earnings, a strict percentage goes to their savings account.
Many people go with the 50/20/30 rule, where 50% goes to basic or required expenses, 20% goes to savings and investment, and 30% is for discretionary spending.
However, those who want to grow their money faster switch over a good portion of their discretionary spending to savings.
Follow this framework, and be surprised how much money you’ll have regardless of how much you earn!
2. Focus on Acquiring Assets That Appreciate in Value
Why buy a car when you can buy a house? The difference? A car slowly loses its value as you drive it outside of the dealer, while a house increases in value over time.
Rich people prioritize investing in items that gain value over time — real estate, stocks, precious metals, bonds, and rare collectibles.
They hold on to these assets patiently until the value significantly increases, then sell. Then, they repeat the process to gain more money.
If you want a slow but effective way to get rich, this is it. Just be patient. Remember, success doesn’t happen overnight!
3. Build an Emergency Fund
Having a fund that can be used for a “rainy day” protects the savings of the rich. It prevents them from getting into debt when an emergency strikes.
You don’t need to rush into this, but it is critical to allot a certain percentage of your monthly income. A good start would be 10%, then gradually increase as you earn more.
Pro Tip: While many of the really wealthy people have spare funds that would last for 1 to 3 years, you can begin by targeting 3 to 6 months’ worth of emergency funds.
To make this more hassle-free, try setting up an automatic transfer of a portion of your paycheck into your savings account. This way, you won’t even notice it!
4. Declutter Your Home (Avoid Hoarding!)
A clean house makes for a clear mind! Many rich and successful people keep their homes clean by decluttering regularly.
You may be surprised by how many items you can find in the nooks and crannies of your house that you don’t use anymore.
If they are not trash and you don’t plan on keeping them, either donate or sell them!
By doing this, you don’t just free up space for new things, you also add more money to your savings for every item you convert to a sale.
Pro Tip: If you have cleared out an entire space in your house, such as your garage or storage area, you may want to earn more from these by ranting out these spaces!
Neighbor.com can help advertise your rented space for a nominal fee of 4.9% of the reservation and $0.30 per monthly payout. Earn passive income from your unused space now!
5. Take Advantage of Opportunities (Go for Multiple Streams of Income)
Name a billionaire who has accumulated his wealth with just a single source of income. None? That’s the point!
Rich people have a talent for finding money-earning opportunities and grabbing them! This results in multiple sources of income.
These can be in the form of a new job, a side hustle, an opportunity to learn, a new business venture, a new investment, or a new partnership. They are not afraid to take risks, but with proper precautions.
By this, you can’t expect the opportunity to come and look for you! You need to seek it yourself!
Looking for new jobs and opportunities is now even easier with the use of online applications.
Pro Tip: If you wish to land a freelance job or gig to add to your existing work, Fiverr or Upwork can definitely help!
Enjoy exploring a wide selection of jobs from writing and translation to graphics and design.
6. Wake Up Early and Get Yourself Organized
The early bird gets the worm. Similarly, many rich people go to bed early and wake up early, too!
They follow a balanced and organized schedule — each and every day. They even write this down on paper, along with their daily goals. This is what you call discipline.
This discipline is also precisely why they become so productive and focused both at work and at home!
Who said being rich is about work, work, work? Many successful people also give themselves time to unwind and spend quality time with their families.
Remember, a great work-life balance creates a healthy mind and body — a critical element of staying rich and productive!
7. Protect Your Investment
If you do not know how to secure your investment, your riches can easily go down the drain for every unexpected life event.
Hence, one of the secrets of the rich to staying wealthy is the protection of their assets.
Here is a rundown of the most basic insurance you need to prioritize to protect your investments.
- Life Insurance
- Health Insurance
- Fire Insurance
- Car Insurance
The cost of protecting your investments is always considerably cheaper than buying new ones.
Pro Tip: Based on a 2024 analysis of Forbes Advisor, Pacific Life Insurance tops the list of the best life insurance companies, especially in terms of rates and cash value accumulation.
8. Invest in Yourself (Financial Education Matters)
When talking about investments, we tend to think about businesses, properties, stocks and bonds, and other expensive items.
However, what you might not know is the considerable amount of time rich and successful people spend investing in their own financial education.
Why is this important? Financial education will make you smarter about how to handle, grow, and protect your money.
Further, learning new skills and mastering your current ones will unlock many employment opportunities and increase your income!
Here are some practical ways on how you can develop your financial knowhow:
- Read self-help books: I personally have read and recommend The Total Money Makeover by Dave Ramsey. It stresses the importance of budgeting, eliminating debt, and wealth-building!
- Enroll in financial education courses: Check out the ones offered on edx.org. You can even choose from free and premium courses.
- Get yourself a mentor: You can either ask to be mentored by a wealthy friend you personally know or enroll in online sessions by top financial mentors like Robert Kiyosaki, author of Rich Dad, Poor Dad.
The best thing about financial education? It is an asset that nobody can steal. It is yours to make you rich for the rest of your life!
9. Give Back to the Community
They say that with great power comes great responsibility. Many wealthy people have benevolence funds that they use for their philanthropy efforts.
We can see these in the examples of Bill Gates, founder of Microsoft Corporation, with the Bill and Melinda Gates Foundation, and Mark Zuckerberg, founder of Facebook, with his Chan Zuckerberg Initiative.
These rich and powerful individuals have donated millions to their own charities to support many initiatives, from fighting poverty to improving education.
We may not have the means yet to do a charity this huge, but it is always best to start small!
You can donate a portion of your extra income to a charitable institution, buy food for that poor old lady across the street, or volunteer in a relief effort mission!
Your good deeds will be sure to attract more blessings in the future!
10. Do Not Show Off!
You know what is ironic? The truly wealthy people live simpler lives compared to those who pretend to be rich.
They do not brag about their million-dollar dress watch or their signature bags or shoes. In fact, they prefer to wear the simpler brands on a daily basis.
They do not have to prove themselves to anyone because they are confident in their own wealth.
Practically, this humility and down-to-earth attitude also prevent them from being targets of people with bad intent, such as theft or robbery.
11. Be Mindful of Your Spending
Being rich and having a lot of cash does not translate to buying the most expensive item on the menu or the fanciest dress.
How do you think the wealthiest people accumulated their wealth? They know how to keep track of their spending and save a ton of money!
Here are some practical ways to manage your expenses:
- Take advantage of cashback apps or coupons on groceries, gas, restaurants, and hotels. Some of the top apps for these are Fetch, Dosh, and Rakuten.
- Cancel all your unused subscriptions and memberships.
- Stop swiping your credit card on unnecessary items.
- Prepare homemade meals.
- Choose reusable and durable items over disposables.
- Stop buying items out of impulse or emotions.
- Quit the urge to upgrade to a new gadget every time.
Doing these tips earlier rather than later will determine how early you can start accumulating wealth.
12. Set a Goal and Plan Accordingly
The difference between successful and mediocre people is how clear their goals are and how carefully they draft and execute their plans.
Rich people try to avoid distractions as much as possible to achieve their financial goals.
They also make multiple plans just in case something doesn’t work out the way it should, like a business gone bad or being terminated from a job.
So, when you make your own goals, remember that all these rich people started with having one too, which they worked on effectively.
Make yours big enough to excite you that you will also be one of them soon enough!
Are you now inspired to copy the effective money habits of the rich and successful? Tell us about your experience, or ask your questions in the comments below!
