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Being successful is largely about following productive habits. Discover the most valuable millionaire habits that are worth repeating in your own life.
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With any type of goal, it often helps to follow the same approach as the people who have already done it. For those who want to be financially successful, it makes sense to learn from millionaires and multimillionaires.
Certified Financial Planner Tom Corley got to know 233 millionaires, with an average net worth of $4.3 million, during a five-year study. He found that there were quite a few behaviors and habits this group shared. If you want to improve your financial situation, here are the millionaire habits to adopt.
1. They take care of themselves
This first habit isn’t directly related to personal finance, but it’s important nonetheless. Millionaires don’t neglect their health. Even though they have lots to manage, they make sure to follow healthy exercise and sleep routines.
Of the millionaires in Corley’s study, 76% said they exercise at least 30 minutes per day, four days per week. Many of them (63%) said they play competitive sports. And despite the stereotype of the successful person who works around the clock and barely has any time to sleep, 93% of millionaires reported sleeping at least seven hours per night.
Habits like these are beneficial for your physical and mental health. That allows you to be more productive throughout the day and puts you at less risk of health issues.
2. They automate their savings
Most millionaires recognize the importance of saving money, with 88% saying it was critical to their success. Corley also found that almost half of the self-made millionaires he surveyed fell into what he called the “Saver-Investor” category. That means they built wealth through their saving and investing routines.
Every millionaire in this group took the extra step of automating their savings. They always saved at least 20% of each paycheck.
There were three other millionaire categories that Corley found: Company Climbers who worked their way up to a high salary, Virtuosos who are experts at what they do, and Dreamers who went all in on pursuit of a dream, such as starting a business or being a musician. While not all of these millionaires were as strict about saving, many of them also automated their savings like the Saver-Investors.
3. They invest and build wealth over time
In addition to saving money, millionaires also invest their money so it can grow. All the Saver-Investors did this. Among those who saved 20% of each paycheck, that was normally split evenly between employer-sponsored retirement accounts and savings accounts.
The most popular investment choices millionaires used to build wealth were individual stocks and mutual funds. That makes sense, considering the stock market has been fairly reliable over long time periods. The average stock market return is about 10% per year for the S&P 500, which tracks the performance of 500 of the largest publicly traded U.S. companies.
As millionaires get closer to retirement, they focus more on wealth preservation. To do that, they shift some of their asset allocation from stocks to more conservative investments, such as bonds.
4. They practice frugality
It’s almost cliche at this point to bring up how frugal millionaires are, but most of them are careful about how much they spend. After all, becoming a millionaire is usually a long process. It took most of them longer than 20 years, on average, and it took Saver-Investors an average of 32 years. The only way to consistently save and invest for that long is by managing your spending well.
Here were a few examples Corley found of frugal behaviors by millionaires:
96% said they spend less than $6,000 per year on vacations64% described their homes as modest55% buy used cars
5. They’re highly productive
A 9-to-5 routine isn’t the norm for millionaires. They work much more than average, with 73% saying they work an average of 58 hours per week. However, 86% reported that they enjoy what they do, which certainly helps when putting in those long hours.
They also manage their schedules well and avoid wasting time. A whopping 81% said that they keep a to-do list, and 24% also had a to-don’t list of time-wasting activities.
That focus on productivity pays off. The millionaires that Corley talked to earn at least $160,000 per year, and half of them make close to $500,000.
The thing to remember about millionaires is that most of them are regular people, just like anyone else. It’s their habits that make them successful, including how they manage their finances and their lives as a whole. If you adopt those habits in your own life, they could be a big help in reaching your financial goals.
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The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.Discover Financial Services is an advertising partner of The Ascent, a Motley Fool company. Lyle Daly has no position in any of the stocks mentioned. The Motley Fool recommends Discover Financial Services. The Motley Fool has a disclosure policy.
