Develop Healthy Wealth Habits
If you want to become and stay wealthy, there are preliminary steps you can take to develop good habits for wealth. These can include determining what wealth means to you, pulling together to get to your common wealth goal, choosing the right occupation, choosing financial independence over status, and saving more than you spend.
Determine what wealth means to you.
In order to be wealthy, you need to know what makes you feel wealthy. It isn’t necessarily a lot of money (although money usually helps you with any wealth goal). Perhaps wealth to you means a large family, perhaps it is the luxury of time to do what you want, perhaps it is the ability to conserve Earth’s resources. Explore Develop Your Family Wealth Definition for more ideas. Whatever your definition of wealth, make sure it includes time to live in the present and enjoy your journey through life.
Make sure your immediate( and to a certain extend your extended) family agree with your wealth definition and will work together with you to achieve that kind of wealth. Set goals together to identify steps to get there. Then allocate your time, energy and money to efficiently build towards wealth. Of prime importance is a family discussion and agreement on financial upbringing, expectations and goals – especially if your definition of wealth requires considerable assets.
Be prepared to track your progress and measure your completions of steps to your wealth goals. This can mean using a budget, making sure the check books balance, tracking investments in the market, making sure rental properties are in order, as well as tracking progress towards your less monetary goals (educational achievements, philanthropy, legacy and etc.)
If you have children, begin at a young age to train them. Include them in reviewing and tracking your progress towards wealth goals, involve them in increasingly important family decisions, train them to avoid wealth issues such as lack of self esteem, help them develop the desire to accomplish by NOT providing everything they want. Your goal as a parent is to launch a self sufficient and productive person into society.
Choose the right occupation.
Research done for the book The Millionaire Next Door by Thomas J. Stanley, Ph.D. And William D. Danko, Ph.D. Indicated that 80% of the millionaires in their study had college or higher degrees. Two thirds of them were self-employed. They also noted that some professions, such as lawyer or doctor, required spending money on status symbols in order to remain a respected member of the profession, and that this is counter-productive to accumulating wealth.
Choose financial independence over status.
Instill eagerness in yourself to be a lifetime learner on topics related to your wealth. Find mentors, advisors, books and other resources to widen your perspective and keep adding to your knowledge levels.
Save more than you spend.
Living within your means allows you to take the excess and use it towards building your wealth. Having a pool of ‘what if’ money allows you to spend it in your mind in multiple ways, but once you spend it, your options are gone. Once you learn this value of delayed gratification, apply it to avoiding spending money on ‘do-dads’ such as expensive boats that end up costing you more than the initial purchase price in taxes, maintenance, entertainment, gasoline and etc.
Owning you home can be a great assist in saving more than you spend – if you don’t buy a palace that has huge real estate taxes, heating and cooling costs and built in expectations from your neighbors as to the need for a swimming pool and well manicured lawn.
Invest your excess consistently in assets that make sense for you, that you understand and that will allow you to build passive income streams.
Don’t allow any economic subsidy you may receive from well meaning parents, grandparents or other well meaning gift givers to derail you from your wealth goals. Economic subsidies can be harmful, not only to your children, but also to you.
The Millionaire Next Door – The Surprising Secrets of America’s Wealthy by Thomas J. Stanley, Ph.D. And William D. Danko, Ph. D. copyright 1996 published by Long Street Press, Inc.