4 types of rich people and their top habits

I began my five-year “Rich Habits” study in 2004 with the goal of learning how the world’s richest people approach their finances. I spoke with 225 millionaires, and they all fit into one of four groups:
No matter what their day job is, saver-investors include saving and investing in their everyday routine. They are always considering clever methods to increase their money.

Company Climbers: Climbers are employed by big businesses and focus all of their time and effort on moving up the corporate ladder in order to secure a senior executive job with a high income.

Virtuosos: These people are among the best at what they do and are compensated highly for their skill and knowledge. It is typically necessary to have formal education, such as postgraduate degrees (in law or medicine, for example).

Dreamers: The people in this category are all pursuing a dream, whether it be starting their own company, breaking into the entertainment industry as a successful actor, musician, or best-selling author. Dreamers are passionate about what they do for a job, and their success reflects this.

The least risky path is the saver-investor one, at least in comparison to pursuing an artistic or entrepreneurial desire. For their long-term financial success, however, 88% of the millionaires I spoke with believed that saving in particular was essential.

In my research, it took the typical millionaire between 12 and 32 years to amass a net worth of $3 to $7 million. Here are their three most prevalent behaviors that everyone can pick up on:

1. 20% of net pay was saved through automation. Every saver-investor in my study routinely sets aside 20% or more of each paycheck’s net income.
Many did this by setting up an automatic withdrawal of a certain amount of their net pay.

Typically, 10% was automatically transferred into a separate savings account, and the remaining 10% was placed in employer-sponsored retirement plans.

The saver-investors would then transfer their total monthly savings of 10% into an investment account, like a brokerage account, once a month.
Even if 20% is too much right now, consistently saving a lower amount can still help you reach your long-term financial objectives.

2. They regularly put some of their savings into investments. Because saver-investors invested their money on a regular basis, their savings grew over time.This compound interest was not particularly important when they first started. But after ten years, they started to amass a sizable fortune. The saver-investors’ wealth increased to an average of $3.3 million by the end of their working lives.

The millionaires who followed their passions and founded businesses, often known as “dreamer-entrepreneurs,” were unable to invest their savings, especially in the beginning phases of doing so. They used any savings they did have as working capital to finance their dream.

It’s interesting to note that the majority of these dreamer-entrepreneurs switched gears and started investing their profits as soon as they started to generate available cash flow.

3. They were very thrifty. Being thrifty was one of the traits that saver-investors, big company climbers, and virtuoso self-made millionaires all shared.

These billionaires started being frugal as soon as they got their first paycheck. It began for the dreamer-entrepreneurs when their vision generated enough income to allow them to save and invest.

Three things are necessary to be frugal:
Being conscious of your financial habits; Put quality first by investing in high-quality goods and services; Shopping for the best deal possible means trying to spend as little money as possible.

Being thrifty won’t make you affluent on its own. There are many components to the “Rich Habits” puzzle, and this is only one of them. However, you will be able to save more money as a result. Additionally, the more money you have saved, the more you can invest.

Author of “Rich Kids: How to Raise Our Children to Be Happy and Successful in Life” and “Rich Habits: The Daily Success Habits of Wealthy Individuals,” accountant and financial advisor Tom Corley

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