Habits of the Fabulously Rich
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Let’s face it; a lot of us wish we could take the lazy way towards long-term wealth. We’re all looking for that one trick that will help us join the other 9.63 million American households with a net worth of over $1 million dollars.
Unfortunately, we all know that there isn’t one magic way to get rich and stay rich. If there were, everyone would be doing it!
Focus On Your Income
Essentially, there are two ways to become and stay wealthy; you either have to grow your income or reduce your expenses. Let’s start by talking about the power of growing your paycheck.
No matter what, your income is your most powerful wealth-building tool. The more you earn, the higher your likelihood of success. Furthermore, the higher your income, the more opportunity you have to become wealthy faster.
Speaking of income, there is one gigantic income issue that your average earner seems to miss. While the average earner typically relies on a single stream of income, wealthy people wouldn’t dream of putting all their eggs in one basket. Grant Cardone, author of “The 10X Rule”, says that, “The really rich never depend on one flow of income but instead create a number of revenue streams.” But what does that mean?
If you want to become rich, having one income stream usually isn’t going to cut it. You need to create several sustainable income streams to really get ahead. That doesn’t mean you have to pick up a crappy retail job. Stop selling your time to make money for somebody else. Instead, use your time to make money in ways that are more passive. Start a side hustle of some kind – sell crafts on Etsy.com, buy and sell old cell phones and tablets at SellCell.com, or teach dance lessons. Start a blog or a lawn mowing business. Do something – anything- that provides value.
Once you provide value, the money will follow. You can use that money to invest in things that create more value…making you even more money. The more streams of income you can create, the better off you will be. Not only will you make additional money, but your income diversification will create more stability for your total income over the long run.
Adopt Wealth-Minded Spending Habits
But income alone does not wealthy make. (Say that five times fast.) In fact, earning a high income only gives you the opportunity to become wealthy. We already know that a lot of high earners simply spend it all due to their own lack of planning. If you earn six figures or more, but spend every penny, are you really better off?
Obviously, the answer is no. After all, even rich people can go broke. Thrifty habits like cutting coupons and turning the furnace down a few degrees aren’t going to make you a millionaire, but adopting these habits can definitely help you reach your goals faster. Here are a few habits you can work on developing if you want to become wealthy.
- Learn how to budget and pay yourself first. – Before you can gain any traction, it’s important to figure out where the money you earn now is going. Start by tracking your spending, then finish the job by implementing a zero-sum budget. Budgeting is a great way to track your income and spending while also allowing you to make adjustments if needed. As a bonus, tracking your spending will often make you far more aware of any problem areas you may have.
- Live below your means. – Contrary to popular belief, most wealthy people did not actually inherit their money. They created and earned their own wealth by taking a chance and starting a new business and growing it over time, all while developing frugal habits in the process. Even Warren Buffet famously lives in a modest house and frequents his local Dairy Queen, which he now owns. If you’ve got it, you don’t need to flaunt it. Learn to live below your means.
- Adopt an attitude of abundance. – Most of the wealthy people I know love to hear about others success because they know how hard it is to achieve. That is one reason that successful people enjoy hanging around other successful people. They know that there is plenty of room, and money, for everyone. Attitudes are catchy. Adopting an attitude of abundance creates an attitude of success.
How to Be Fabulously Rich for the Long Haul
Learning how to generate income and cultivate healthy spending habits will help you become and stay wealthy. If you want to know more about how we’ve created our own wealth, check out “The 5 Financial Habits that Changed My Life.”
Now, adopt an attitude of abundance and share this valuable information on social media with your friends!
What habits are going to help you become and stay fabulously rich? Do you focus more in income or frugality?
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Revenue is the real variable in the wealth equation. You can only cut your expenses so far but you can always (OK, usually) make more money. I’d rather expand my means than have to live on beans and rice indefinitely. 🙂
We are now focused on frugality but we are trying to increase our income too. I agree with you : both of them are important if you want to become wealthy. I am just sorry I did not understand that before!
Join the club! =)
We come at the equation from both sides–we’ve increased our incomes and upped our frugality. For us, it’s been all about implementing sustainable measures that we can maintain for the long haul. We don’t feel deprived in our frugality (and we actually enjoy the changes it has brought to our lives), so we know we can keep it up for the long term, which helps us save more and spend less. A win-win!
Also, I love your comment that people who make a lot of money aren’t necessarily rich–so true! You’ve got to save that money!
Yep! Or you are just going live paycheck-to-paycheck with nice stuff, which is pretty sad.
I focus more on the income side than the frugal side. That isn\’t to say I just spend money without thinking, it\’s just that I can earn more money than I can cut out of my budget. There comes a point when you cannot cut expenses without lowering your standard of living. But, you can always find new ways to bring in more income.
Yes, there is a point where reducing your living expenditures starts cutting meat instead of fat. But that point could be a good ways away from a person’s present spending levels.
In my case, gradual and continuous effort ended up reducing my basic living expenses by 42% from where I started the process. And almost all that expense cutting was the result of finding no-or-lower-cost SUBSTITUTES for goods and services. About the only thing I flat out ended doing without was the once-a-week maid service. :O
I’m all about the multiple income streams. I’m around 4 or 5 right now and it’s the first time in my life that I feel like I’m not struggling to make it.
Yep! And if you lose one, you can just go out and replace it. I have no idea why people feel that having one 9-5 job is the most secure situation you can be in.
I definitely try to come at it from both sides, though right now I’m (at least trying) to lean more toward frugality. My work is pretty much feast or famine so during the next rush, which will probably happen April-July season, I’ll have the chance to focus again on maximizing income. For now, I’m taking it easy…
At least you know so you can prepare! That is half of the battle.
Nice post Greg! We focus more on the income side of the equation. I believe there is more bang for your buck there. You can only cut expenses so far…income has theoretically unlimited potential. Nice redo of the site by the way…looks great!
I agree with you. We *could* cut our budget more but we’re pretty happy with where it’s at. On the other hand, we can always use more money!
Like the FW, we take a two pronged approach by living frugally while also focusing on upping our income (through as many revenue streams as possible) so we further multiply what we’re doing. Making all sorts of money is going to do you squat if you’re also not living under your means. Of course, you can only cut things so far but we do what we can.
Same here. Our budget is very frugal but we’re not eating rice and beans every day. We have tried to find a balance that makes our lives better and easier.
Practice delayed gratification!
Unfortunately, we have always been pretty good at the frugality and earning money, but since Marie has left her stable job to pursue a career as a freelance PR writer, money has been tight/irregular.
Our frugal habits have meant that we’re okay/able to save a little money, but the whole ‘side-hustle’ is becoming vastly more important now that we don’t have $3,000+ a month to put away.
Everything changes, I guess! Just got to find a way to make value for someone else.
I absolutely agree you need many sources of income, preferably ones that are passive because there is only so much time in the day. I do both: I try to increases my income and cut back expenses.
Income and keeping more of that income is our main focus right now. It doesn’t matter how much money you make if you can’t live below your means.
Love this! It surprises me how many people pay themselves last, which typically means they set nothing aside. Even with best intentions, we will often spend the money we intended for retirement and/or other goals on other things. I also think there needs to be a mind shift when it comes to multiple streams of income. People today still associate having anything other than a 9-5 as being a failure and that is simply not true.
Living below our means is the biggest focus for us right now. We are also focused on increasing our income.
I love the attitude of abundance alliteration there, now I will always remember it!
First, LOVE the site. I checked it out yesterday on mobile but first time on screen today- love it.
You’re so right, SO much more than about money. If you don’t understand how to make it work for you or make it last it doesn’t matter!
I think consistency is key to building wealth. Consistently saving and investing, in particular. But it’s also much easier to save and invest on a high income. So I do agree with living below your means, but it’s important to evaluate what lifestyle you are pursuing. It’s going to be easier for someone who is happy in a small 2 bedroom home who makes all their meals at home and never travels to live within their means than someone who wants 8 kids and a cabin to bring them to in the Summer.
Truth! Increasing incomes streams and living below your means is where it’s at!
We’ll definitely be looking into alternate income streams once we have this major expense out of the way this year. I’m going to start saving for a down payment on a rental property. I think, while it certainly has its own pitfalls, it’s one of the best ways to keep income for the rest of your life.
Meanwhile, I’m trying to focus more on my blog to help generate income.
Peer to peer lending is next on our list. It\’s not as glamorous as a side hustle or rental real estate but it\’s something that is fairly passive but had a better ROI than most other things I can do with my money.
With a baby at home, my opportunities to get radical on income are constrained at the moment. But I\’m looking forward to moving to a lower cost of living area in a few years and bring able to purchase multiple rental properties with my current home equity.
I really advocate for the wealth minded spending habits. Some of the most successful people I know continue to live within their means and still live very modestly. It’s hard not to want to keep up with lifestyle inflation and want nice things but in the end, it’s just stuff. No one cares about it.
Yes Holly! I gotta surround myself with successful people. If I want to be someone I dream of, I will find the best people whom I’d like to be someday. Thanks for reminding me how to be fabulously rich.
You have brought up a really fantastic point. Thank you for sharing your article.