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How would your life change if you had a net worth in excess of $1 million? How about some millionaire habits to get you started?
Financial freedom is something that most of us aspire to. We want to live life on our own terms. Most of us want the freedom to choose our work based on what we enjoy rather than needing to pay the bills.
While $1 million isn’t a magic number that translates to having enough money to pursue all of your dreams, it is an important milestone that can serve as a target or goal.
Millionaire Habits You Can Start Developing Now
When it comes to growing net worth and building wealth, a lot of people tend to look at ways to make more money. Increasing your income certainly can help, but the way you manage the money that you make is also critical. The mindset or outlook that you have towards money is also essential because it can put you on the right path.
With that in mind, there are several habits you can develop that will help you reach your financial goals. Let’s take a look at some of the millionaire habits that are sure to help your net worth climb.
1. Maintain a Positive Outlook
How do you view your financial situation? What’s your perspective on your life in general?
It’s easy to focus on the negatives and the challenges when you’re struggling financially, along with other problems. We all face stress on a daily basis, and most of us tend to look at life and finances pessimistically.
Think about the most successful people that you know. There’s a good chance they keep a positive outlook on life and their finances. It’s hard to achieve success if you’re always focused on the negative, so it should be no surprise that most successful people are optimists.
Optimism is a habit that can take some time to develop if you tend to look at things negatively, but you can practice changing your perspective. Pause when you catch yourself in a negative thought, and revise your internal dialogue every day, even if you’re going through a challenging time.
When you’re able to develop and maintain a positive outlook, you’ll find that you have more success. You’ll notice opportunities that you’re more likely to miss if you’re focused on problems or challenges. You’ll be more open to trying new things, and you’ll expect to succeed rather than fail.
There are a number of ways to change your mindset, but we have some recommendations:
- Setting aside time daily for reflection, prayer, or meditation.
- Listing the things that you’re grateful for (daily, if possible).
- Surrounding yourself with positive people rather than negative people.
- Developing your own plan that you can follow, rather than simply reacting to what happens.
- Reading books on personal development.
2. Set Goals and Think Big
What are your financial goals? It might be surprising to know that many people don’t have specific goals. If you don’t have goals, you’ll most likely fall into the same traps that prevent other people from growing wealth.
Setting goals will give you something to pursue and help you to keep your sights on what’s most important to you. Your goals will challenge you and provide the motivation to help you reach new levels of success.
The goals you set should be SMART:
Since we’re talking about millionaire habits, maybe one of your goals is to achieve a net worth of $1,000,000. If you really want to achieve that milestone, your goal should have a deadline.
One note: Although your goals should be attainable, they should not all be easy. It’s ok to set a few different levels of goals and start with something easy, but if all of your goals are too easy to reach, you won’t be challenging yourself. The purpose of goal-setting is to push yourself, so you’ll need to set goals that might be difficult to reach.
If you don’t already have a set of financial goals for your life, take some time to create a few SMART goals. It’s a good idea to have short-term and long-term goals that will align together to help you get where you want to be.
3. Be Persistent and Patient
You can’t grow wealth overnight. Reaching your ultimate financial goals will require some persistence and patience. You’ll need to have the endurance to stay disciplined and stick with your plan, and you’ll need to be resilient, because you’ll inevitably face some challenges that threaten to derail your progress.
In order to build wealth, you’ll need to spend less than you earn and invest the difference. With patience, you’ll see your net worth increase as you continually invest more money, and the value of your investments increase.
Of course, there will be some times when your portfolio drops in value, so you’ll need the persistence to stick with your plan and the patience to wait for it to pay off.
When it comes to long-term investing, there are a few different options that you may want to consider:
Create Your Own Automated Investment Plan with M1 Finance
M1 Finance is a free app (there are some optional paid upgrades available as well). You can choose from one of their expertly-created pies that determines exactly how your money will be invested, or you can create your own. Then, all you need to do is add money to the account, and M1 Finance will invest it according to your plan.
Have a Custom Investment Portfolio Built for You and Managed by SoFi
Another hands-off option is to use SoFi’s automated investing features that involve goal setting, auto rebalancing, and diversification. You can start an account with no minimums, and it’s a great way for anyone to get started.
Take a DIY Approach by Investing in Stocks, ETFs, and Options with Robinhood
Robinhood is a popular investing app that’s had a huge impact on the industry by offering commission-free trades in order to make stock market investing more accessible to new investors.
4. Develop Multiple Sources of Income
Something most millionaires have in common is multiple streams of income, rather than relying on only one means of making money.
Of course, your job is your primary source of income (whether full time or part-time), but there are a lot of ways to add additional streams of income. The most common option is to start a side hustle, and there are countless ways that you can make extra money outside of a traditional job.
If you have an entrepreneurial mindset, you could start a business or even purchase a business that provides another source of income.
Additionally, you could use your money to purchase income-producing assets like rental properties or farmland. As your net worth increases, you’ll be able to use your financial resources to make money for you, rather than dedicating more time to working a side hustle.
Investing in real estate is a proven way to build wealth, and many millionaires have built their fortunes thanks to real estate. Today, investing in real estate is easier than ever, thanks to platforms like Fundrise and Roofstock.
5. Track Your Net Worth
Tracking your net worth may seem like something that’s only relevant for millionaires, but that’s definitely not the case. Even if you’re just getting started on your financial journey, it can be very worthwhile to calculate and track your net worth.
You’ll experience a few significant benefits from tracking your net worth, including:
- Clearly seeing your progress over time
- Seeing the true impact of your financial decisions
- Quickly viewing your overall financial health
Your net worth is simply your assets minus your liabilities. It’s not uncommon to have a negative net worth, especially for younger people who have significant amounts of student loan debt. However, with continued progress, you should see an upward trend that helps you to reach your goals.
Personal Capital offers free software that will automatically calculate and track your net worth for you. You can link Personal Capital to your financial accounts, and then at any time, you’ll be able to login to your personalized dashboard and quickly see your net worth, among other things.
If you’ve set the goal of reaching $1 million in net worth (or any other figure), then tracking your net worth and liquid net worth (only liquid assets are counted) should be a part of your monthly financial routine.
6. Think Like an Entrepreneur
Although there are a lot of different ways to make money, many millionaires have achieved financial wealth by starting a business rather than relying on a traditional job as an employee.
You may not see yourself as an entrepreneur, but there are a lot of different types of businesses that you could start, and there is probably something out there that would be a good fit with your own interests and experience.
Earlier, we looked at the possibility of starting a side hustle in order to develop multiple streams of income. While there are a lot of different side hustles that you could pursue, not all of them offer the same potential. Some side hustles involve simple tasks that may earn you some extra money in your spare time, but other side hustles involve starting a business that could grow into something substantial in the future.
If you have a goal of becoming a millionaire and you’re looking at different side hustle possibilities, consider a side hustle that involves starting a business. It may take more time for your income to grow, but the long-term potential is far more significant.
7. Don’t Act Rich
Why do you want to become a millionaire? Is it because you want to reach financial independence and gain control over your life, or is it because you want to impress other people with your money?
Most self-made millionaires aren’t concerned with impressing other people with their wealth. Instead, their money allows them to live an average lifestyle and cover living expenses and surprise expenses. If your goal is to impress other people, you’re sure to spend more money than necessary on cars, homes, clothes, and other things.
You don’t need to be overly frugal, but you should live a modest life that allows you to save and invest as much as possible. This gives you the best chance to experience long-term growth.
8. Make the Most of Your Money
Your financial decisions will have a snowball effect. Good decisions and good habits will allow you to save more and invest more, which leads to quick growth in net worth.
Bad financial decisions and habits will lead to debt, which will continue to pile up until you start making better decisions and developing better habits.
Making more money is certainly helpful when it comes to building wealth, but it’s also important to make the most of the money that you already have. This means controlling your spending, living responsibly, and investing wisely.
A few of the resources mentioned earlier in this article can also be very helpful for making the most of your money.
- Personal Capital provides reports that show the impact of the fees that you’re paying with your investments. It also provides other reports on the progress of portfolio investments, helping you to make the best decisions.
- M1 Finance offers a wide selection of expert pies that you can select, based on your own financial goals.
- SoFi will handle the most challenging parts of investing for you.
9. Develop the Habit of Reading
One of the best and most valuable millionaire habits that you can develop is reading on a regular basis. Reading will help to keep your mind actively engaged, and it’s a way to keep learning new things.
If you want to improve your finances, you could read books on topics like budgeting, debt payoff, investing, and other aspects of money management. You could also read books on business and entrepreneurship, to provide ideas and inspiration that you can use to increase your income through a business of your own.
Whatever you want to learn, there are books that can help. And if you’re strapped for time due to a busy schedule, a handy alternative is to listen to audiobooks. You can listen during your daily commute, while exercising, or while doing other simple daily tasks that may not require all of your brainpower. You may be able to listen to several hours of books each week without changing your daily schedule. For those who like audiobooks, Audible can be a great resource. If you prefer ebooks, an Amazon Prime membership offers outstanding value — you’ll get access to a huge library of ebooks.
10. Spend Time With Successful People
We tend to be like the people we spend the most time with. If you spend most of your time with negative, pessimistic people, you’re likely to be the same. But if you spend your time with positive, successful people, they’ll likely have a positive impact on you.
Think about the people in your life that are around you the most. You might not have much choice with some of these people (family members and co-workers, for example), but you can choose how you use your spare time and who the people you’re around during those hours.
Make a conscious effort to find successful people and spend more time with them. You’ll see that it impacts the way you think and the way you view life. These types of people can either directly or indirectly challenge you to reach your potential.
If you want to reach financial freedom in your life, take a look at these millionaire habits and see which ones you need to develop. Establishing good habits will take some time and effort, but the long-term impact will be well worth it. You’ll find that your success increases and your net worth grows as you develop these proven millionaire habits.
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