12 Habits of Millionaires

Money lists as follows:

1. Millionaires are super savers.
2. They get an early jump on building wealth.
3. They value hard work.
4. They invest for the long term.
5. They don't take crazy investment risks.
6. The majority seek out advice.
7. They value education.
8. They splurge but within reason.
9. Some aren't above serious economizing.
10. They shop at discount stores.
11. They tend to be planners.
12. They are givers and not gamblers.

Here's my take on these:

1. Got to agree that saving is a key part of building wealth. In the details of the piece, 58% say "saving early and often" was a top contributor to their success. That's because it gives compounding a looooooong time to work and . FYI, 38% list "controlling spending" and "smart investment choices" as keys to success while 26% say "earning a lot of money" is a key. I guess they'd go for .

2. Covered that issue above.

3. 95% say "hard work" contributed to their success. The other factors were: education (83%), smart investing (79%), frugality (78%), and risk taking (57%). This seems like the right order of priority for me as well.

4. Yes. If you "invest" then it's much better to go for the long-term view. If you need money soon, it's not good to tie it up in investments that could go down in the short-term (but will likely be up over the long haul).

5. 60% classify themselves as having a "moderate" risk tolerance. 22% say "aggressive". I'm probably in the moderate camp but have pushed the envelope a bit (mostly in my asset allocation which has always been heavy in stocks).

6. 62% rely on a financial advisor to help manage wealth. This is where I break from the pack. I am my own financial advisor. I do use professionals for things like taxes and estate planning, but I am in charge of the overall plan myself.

7. 86% say getting a college education is very important and 82% are college graduates. I would say the right education is important. I would NOT advise getting a $150k degree (and having student loan debt) for a job that pays $25k a year -- it just doesn't make financial sense. On the other hand, my MBA was probably one of the best money moves I've ever made.

8. 92% spent money on vacations in the past year. When our kids were growing up, most of our vacations were trips to see family. As they got older, we took some more expensive trips (one trip to Disney and three separate cruises). You can still save/invest even while spending on something expensive like a cruise, but you have to have . In other words, you have to pick and choose what to spend big bucks on and reap your savings from the other things that don't matter to you as much.

9. Ok, I do three of the four things that they list as "serious economizing": using coupons, mow their own lawn (actually my son does it), and shop at Goodwill (FYI, we also shop at Costco, Walmart, and used to shop at Aldi when we had one in our city). Why not? Why pay more for something than you have to?

10. Now we get to the places that Money deems "surprising" to see millionaires shop at: Amazon, Walmart, and the like. Why is this surprising? Probably because all the Money editors who are not millionaires shop at Nieman Marcus and Saks Fifth Avenue.

11. I do have a to-do list (like 67% of millionaires), write down goals (like 67%), and network close to 5 hours a month (like 79%). It's the small things that add up over time and these do pay off if you use them day after day over the course of years.

12. 97% donate to charity (we do too) and 74% spent no money on gambling the past 12 months (neither did we).

In the end I match pretty closely with this list.

How about you? Which of these do you follow and which do you ignore?

Comments

[freebird]

I've saved a large percentage starting from my very first paycheck so yes on the first two. I worked pretty hard on managing my investments, but I would have hit the same returns by passive index investing, so my effort wasn't adding value. On #4 yes I aim for box D on winners, my average holding period is several years.

I take crazy investment risks on a portion of my capital, but in aggregate I'm pretty conservative. I do not seek out advice with respect to how I run my money, although I take the time to read certain long form articles about areas I'm thinking of investing in (and my BS detector stays on full alert).

No regrets about earning my doctorate and happy to help pay family members university costs. I live in an area that attracts vacationers, I have a low tolerance for discomfort so I don't spend on travel. I'm a big fan of thrift stores too, what's not to like about the lower costs, being green, supporting a worthy organization, and access to high-quality materials that aren't available new anymore?

Definitely not the planner type, I just set the direction and mindlessly stay the course. Like I've never made a budget or balanced my checkbook-- my expenses are low enough to leave an ample sur every month. Spending aversion has its rewards!

[FMF]

@freebird

Have you ever done a millionaire interview with me? If not, would you like to?

[freebird]

Thank you, I've read your interview series and found it to be quite informative, and I believe everything I would have to say has already been well covered so I have nothing to add. I see a clear behavior pattern in these stories that shows a general path to reaching financial independence. It was a single case study in Money magazine nearly three decades ago that opened my eyes to this possibility just as my work life was starting, and hopefully the additional stories you've documented can inspire many more in today's generation to make life choices that bring contentment over the long term.

[MoneySheep]

There are many paths to become a millionaire.

Those 12 habits are respectable, but they are for ordinary salary workers. If you were an entrepreneur following the 12 priorities, for example, you would miss out on your potential accomplishment. On the bigger scale, you are the one who hire those salary millionaire.