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Affordable Habits of the Wealthy


How did the wealthy get to where they are today? While there’s no universal path to financial success, emulating some of the financial habits of the wealthy may help you follow in their footsteps. Learn what they are—and how you can learn from them.

1. They spend less than they earn

While this may seem like a no-brainer, it’s a concept that many Americans struggle with. The “keeping up with the Joneses” mindset can be a recipe for disaster, causing people to buy things they can’t afford and ultimately don’t need. While many people think of the wealthy as celebrities who lavishly spend on extravagant goods, many of the wealthiest people in America maintain low-key lifestyles and are careful to spend far less than they earn. For example, Warren Buffett has billions of dollars but has lived in his Omaha, Nebraska, home for over 50 years without “trading up” to a mansion.

Budgeting is key to this process. Thomas Stanley and William Danko, authors of the popular book “The Millionaire Next Door,” found that millionaires spend substantially more hours per month reviewing their budget than non-millionaires do. No matter your net worth, carefully tracking your finances can help you better understand where you’re spending too much and where you can afford to spend or save more. This helps you gradually accumulate more and more wealth over time.

2. They set financial goals—and stick to them

To some, setting financial goals may be as simple as stating, “I want to be able to retire at age 60.” While big picture goals are important, this general approach isn’t very effective. In contrast, a goal of “I’ll save $500 per month” is just as ineffective without understand the broader context. Your financial goals should be clearly defined, prioritized, and you should have a plan in place with deadlines to help you reach them.

According to Steve Siebold, author of “How Rich People Think,” many middle-class people struggle with having loosely defined goals or give themselves too flexible of deadlines. The wealthy, on the other hand, have firm goals with ‘do or die’ deadlines along with next steps. Research has also found that the wealthy spend twice as much time planning a financial strategy than others. Setting goals, making a plan to achieve them, and then measuring your progress toward those goals are essential financial habits.

3. They save more

During their research, Stanley and Danko discovered that millionaires save, on average, 20 percent of their income. And, for the top 1 percent, that number is closer to 37 percent. It seems almost too obviousthe more you make, the more can afford to save. Very true. But, this comes down to creating a financial behavior that becomes a self-fulfilling prophecy. Similar to creating firm financial goals, a successful savings plan should have a target and no downward flexibility. Treat your savings as a budget expense item to establish a habit of saving. It’s easy to say that you’ll start to save “when you can afford it,” but by making it a practice to save at least a small amount of your income now, you set yourself up for financial success down the road.

4. They plan to retire later

It’s many people’s dream to retire at 40, but not the wealthy. A survey from wealth research firm Spectrem Group found that almost one-third of the highest earners in America don’t plan to retire until they’re at least 70 years old, while fifteen percent say they never plan to retire. For those making less than $100,000 per year, that number drops to 6 percent for both categories—most of this income bracket plans to retire by age 65.