It’s funny because I work with a lot of pretty wealthy people, and I see how they live and what motivates them. I also see what habits they have that people without wealth don’t have.
One thing that’s probably fair to say about people who have decent jobs but struggle to get ahead is that they haven’t developed good financial skills and habits.
Here are some of the habits of people with a net worth of between 1 and 5 million dollars, (not the super-rich) based on my observation and on independent studies too:
- They live below their means. They count financial security as more important than having lots of stuff. In fact, most often, the more lavish the lifestyle, the lower the person’s net worth. I know a lot of pretty wealthy people who drive older pickups and wear regular jeans and shake their heads at the lavish lifestyles of their subordinates.
- They are relationally stable, and their spouse is cheap. Are there divorced, wealthy people out there? Of course, but dividing your assets in half makes for a stiff headwind when it comes to accumulating wealth. And having someone who is on the same page with you around spending is a big help. You may have a good offense (high income) but a weak defense (high spending).
- They don’t drive ultra-expensive vehicles. By survey, their top 3 favorite car choices are:
- GM (26.7%)
- Ford (19.1%)
- Chrysler (11.8%)
A full 50% of respondents to this survey had never paid more than $30,000 for a vehicle in their lives. Most wealthy people are pretty regular, and don’t aspire to extravagant spending. That’s how they become wealthy in the first place.
- They weren’t supported by their own parents financially, they don’t tell their children about their wealth, and they don’t support them economically when they in turn become adults. They believe that children will never become strong financially until they learn to earn and save on their own.
- They enjoy their work. Work is not drudgery to them. They enjoy what they do and they’re good at it. It’s hard to be good at what you do if you show up every day comparing your weakness to other’s strengths.
If you want to get ahead, work toward these simple rules:
- Own your own home
- Invest 10% of your gross income every month
- Strive to build a happy marriage