Anyone can become a millionaire: ways to get rich for people with different types of character
In 2004, Tom Corley decided to conduct a five-year study on the Habits of the Rich to identify 4 types of rich people and their top habits. CNBC.
Each of the 225 millionaires he interviewed fell into one of four categories:
1. Accumulator investors: No matter what they do, they make savings and investments part of their daily lives. They are constantly thinking of smart ways to increase their wealth.
2. Careerists: work in a large company and devote all their time and energy to climbing the corporate ladder until they get a very high-paying management position.
3. VirtuosiA: They are among the best in the business and are paid a high rate for their knowledge and experience. Formal education such as a degree (such as in law or medicine) is usually a requirement.
4. Dreamers: The people in this group are all pursuing a dream, such as starting their own business, becoming a successful actor, musician, or best-selling author. Dreamers love what they do for a living, and their passion shows up in their bank accounts.
The path of the savings investor requires the least amount of risk, at least compared to pursuing an entrepreneurial dream or a creative passion. But 88% of the millionaires I interviewed said that savings is especially important to their long-term financial success.
It took the average millionaire in the study 12 to 32 years to accumulate a net worth of $3 million to $7 million.
Below are their three most common habits that anyone can adopt:
1. They automated and saved 20% of their net payroll
Each saver-investor in the study consistently set aside 20% or more of their net salary, every paycheck.
Many have achieved this by automating the withdrawal of a fixed percentage of their net salary. Typically, 10% went into employer-sponsored retirement accounts, with the remaining 10% automatically sent to a separate savings account.
Once a month, hoarding investors would then transfer their accumulated 10% monthly savings to an investment account, such as a brokerage account.
Even if 20% is too much for you right now, consistently saving less can help you reach your future financial goals.
2. They regularly invested some of their savings
Because they continually invested their savings, their money increased over time. When they started, this compound interest was not very significant. But after 10 years they began to accumulate significant fortunes. By the last years of his working life, the wealth of savings investors had grown to an average of $3,3 million.
Millionaires who chased a dream and started their own business (also known as entrepreneurial dreamers) were unable to invest their savings, especially in the early stages of pursuing their dreams. All the savings they had were used as working capital to finance their dream.
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Interestingly, however, once most of these visionary entrepreneurs were successful in the form of available cash flow, they immediately turned around and started investing their earnings.
3. They were extremely frugal
One of the common denominators for thrifty investors, big-company careerists, and self-made millionaire virtuosos in the study was thrift.
For these millionaires, thrift began the moment they got their first paycheck. For entrepreneurial dreamers, it started the moment their dream generated enough cash flow for them to save and invest.
To be frugal, you need three things:
- Awareness: being aware of how you spend your money.
- Focus on quality: Spend your money on quality products and services.
- Bargain Shopping: Spend the least amount possible by shopping at the lowest price.
Thrift alone will not make you rich. This is just one piece of the Rich Habits puzzle, and there are many. But it will save you a lot of money. And the more savings you have, the more money you can invest.
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