As a financial planner, I work with a lot of people that I would consider “wealthy.” But they didn’t start off that way. It was a specific set of habits and ways of thinking that allowed them to go from just OK to seriously successful.
I know the word “wealthy” can mean a lot of different things to a lot of different people, so let’s get clear on what I mean by this:
Whenever I use the term, I’m still working in the realm of reality. I’m not talking about Jeff Bezos or Warren Buffett, the one-in-a-million stories of people so rich they couldn’t run out of money if they tried.
I’m talking about real people — self-made people. People who built good habits, grew their income, and learned to manage the money they earned so they could grow it into wealth over time — and “wealth” means enough money to meet your long-term goals while still getting to enjoy using some of that money on stuff you want to do today.
Sounds pretty good, right? Here’s what’s even better: This is actually attainable for most people, and often what separates real-life wealthy people from those who struggle with money are habits and practices that you can pick up for yourself right now.
1. They ask questions
Whether they implement do-it-yourself financial planning and money management, have an accountability buddy, read financial blogs and listen to podcasts, or hire a financial planner, wealthy people always seek to learn new things, and they never stop asking questions.
They don’t assume they know everything or the best methods for achieving a goal. They ask, they research, they consider, and they get second opinions.
It’s not an obsessive quest for the next big thing but a regular habit of being curious and wanting to learn more. If you’re not asking questions about your money, start now.
2. They know when simple is better
A lot of the financial industry profits off selling you something based on your fears or insecurities (for instance, whole life insurance is a product most people do not need!), or they profit off selling complicated ideas.
Most of us can enjoy some level of financial success by sticking with some crazy-simple strategies:
- Spend less than you earn.
- Save as much as you can (20% of your gross income is great goal to aim for, but if you want to be wealthy, 30% to 40% is a better number to aim for — and yes, I know this is A LOT).
- Align the money you do spend with what’s important to you and stop spending on the stuff that doesn’t matter.
- Increase your income; making more money is one of the most powerful things you can do for yourself.
None of this is complicated. It’s simple but not easy. That doesn’t mean things can’t get complex. In fact, the more wealth you start to build up in various investments, the more complex your financial life will become.
But complex is not the same thing as complicated. Wealthy people know the difference.
Once you consistently nail these fundamentals and start increasing your net worth, you may want to look for sophisticated ways to manage your money and continue adding to your assets — but if you don’t understand how something works, it’s not a good thing to put your money in.
Keep it simple.
3. They don’t think the small stuff is beneath them
And, on that note, don’t think the small stuff is beneath you. You know what else wealthy people do? They keep budgets. They track their spending. They avoid unnecessary fees and don’t have luxury everything when the midrange product does the job.
Wealthy people tend to become wealthy because they pay close attention to the little things. They’re good stewards of their money, and they care about keeping it in the bank — not about showing it off via material things and flashy status symbols.
4. Wealthy people live below their means
The people I see who manage to build their own wealth are those who follow the steps above … but also focus on doing a few other key things with their cash.
First, they don’t spend money they don’t have, period. They understand their cash flow — or money coming in and money going out — extremely well. They spend time evaluating their transactions and making sure that their spending habits are aligning with their values and their goals.
They also know how to prioritize. Wealthy people pay themselves first by making sure they save money each month before doing anything else, and if they feel they’re not earning enough to generate the cash they need to save to meet their goals, they work to raise their income.
5. They prioritize saving and investing
They also save and invest. They’re not afraid of the market, and they know it’s one of the best opportunities for regular people to transform into wealthy people.
They also know that the key to success is to stay invested over the long run. They don’t try to pick the next hot stock or play with market timing. They stick with simple, proven, systematic strategies and invest over time.
6. They keep an emergency fund
They protect their position of financial success in a number of ways. They keep emergency funds, or cash reserves, that they can use should anything go wrong. This helps them avoid diving into debt when things don’t go according to plan.
They also protect themselves in a way that few people consider doing: by simply thinking positively.
7. They realize it’s not all about money management — it’s about mindset, too
Having a positive mindset is another thing wealthy people tend to have in common. This isn’t some new-age-y type of advice; there’s some real science behind why a positive mindset is powerful.
When you think positively, you prime your brain to look for more good stuff. You’re more likely to spot opportunities and feel you can and deserve to take advantage of those.
When you think negatively, you do the opposite: You prime your brain to assume the worst and tend to miss out on the good things you could have leveraged as opportunities to further improve your financial situation.
This stuff might sound woo-woo or fluffy; it’s certainly less tangible than something such as an asset-location strategy or complex tax-reduction tactics. But that doesn’t make it any less important.
How you think influences how you behave, and how you behave helps cement your habits. If you have a negative mindset or believe there’s nothing you can do to change your situation, those thoughts will form your reality.
That doesn’t mean you can just wish your way to success. It takes a lot of work, commitment, dedication — and, yes, a fair amount of luck and chances that go your way, too.
My point isn’t that you can simply manifest wealth by hoping for it. My point is that there’s enough in life that’s hard, bad, or a challenge. Don’t make it harder by drowning yourself in negativity and unproductive, unhelpful thoughts, too.
8. They focus on what they can control
Ultimately, the factor that might set the most successful clients I work with apart from the rest is the fact that they know how to focus on what matters and on what they can control.
While they’re informed and aware, they don’t get emotionally attached to the day-to-day market movements … and they definitely don’t buy into the financial media hype. They’re not glued to CNBC or frantically scanning the headlines every morning.
They have a bigger-picture view because they know they already have a solid, repeatable system they can use to build their wealth over time. They tune out the noise that comes from doom-and-gloom, short-term predictions and focus on the long-term.
You can do the same, and instead of getting caught up in making tiny tweaks to your money or your investments, consider the big-picture actions that will truly move the needle when it comes to building wealth.
Those actions are not trying to follow the market’s every move or believing that you have some kind of insight on the next hot stock (that no one else has). Instead, focus on nailing the fundamentals:
- Spend less than you earn, track that spending, and keep a budget.
- Save a large percentage of your income (at least 20%; 30% is even better) and make sure to invest, as well.
- Earn more money. Negotiate, get a new job, or start a business (or even just a side hustle). Get creative and explore every avenue you can think of for increasing your income.
- Think positively and always keep an eye out for your next opportunity.
If you can manage to do these things, you’ll start mirroring what wealthy people do with their money … and find yourself well on the way to your own financial success.