7 Rich Habits

Some of the differences between rich and poor are obvious, while others are a bit more surprising. Here are the most important habits of the rich that you can adopt to reach and maintain your wealth potential.

1. Live within your means.

Wealthy people avoid overspending by paying for their future first. They save 20% of their net income and live on the remaining 80%.

Among those with financial problems, almost all live beyond their means. They spend more than they earn and are overwhelmed by debt. If you want to end your financial problems, you need to get into the habit of saving and budgeting what you spend. Here are some sensible ways to budget your monthly take-home pay:

1. Spend no more than 25 per cent on housing, regardless of whether you own or rent.
2. Spend no more than 15 per cent on food.
3. Limit entertainment – bars, movies, mini-golf, whatever – to no more than 10 per cent of your spending. Holidays should be no more than 5% of your annual take-home pay.
4. Spend no more than 5 per cent on car loans, and never lease. 94% of the wealthy buy rather than lease. These people keep their cars until the wheels fall off, taking great care along the way to save money in the long run.
5. Avoid racking up credit card debt. If you do, it’s a clear sign that you need to cut back somewhere.
6. Think of savings and investments as two completely different things. You should never lose money on your savings. Try to set aside six months of living expenses in an emergency fund in case you lose your job or your business goes under.

2. Forget the TV and spend less time surfing the Internet.

How much valuable time do you waste parked in front of a screen? Two-thirds of affluent people watch less than an hour of TV a day and almost the same 63% spend less than an hour a day on the Internet, unless it’s work-related.
spend less than an hour a day on the Internet, unless it is work-related.

Instead, these successful people use their free time to engage in personal development, networking, volunteering, side jobs or side businesses, or to pursue some goal that will lead to rewards in the future. However, 77% of those in financial difficulty spend an hour or more a day watching television, and 74% spend an hour or more a day using the Internet recreationally.

3. Go the extra mile in work and business.

Unsuccessful people have the “it’s not in my job description” syndrome. As a result, they are never given more responsibility and their salaries grow very little from year to year, if they keep their jobs at all. In contrast, wealthy people make themselves valuable to their employers or clients by writing articles related to their industry, speaking at industry events and networking. Successful people work hard to achieve the mutual goals of their employers or their companies.

4. Set goals, not wishes.

You can’t control the outcome of a wish, but you can control the outcome of a goal.

Every year, 70 percent of the wealthy pursue at least one major goal. Only 3 per cent of those struggling to make ends meet do so.

5. Talk less and listen more.

A ratio of 5 to 1 is about right: You should listen to others for five minutes for every minute you talk. Wealthy people are good communicators because they are good listeners. They understand that you can only learn and educate by listening to what other people have to say. The more you learn about your relationships, the more you can help them.

6. Stay away from toxic people.

We are only as successful as the people we spend the most time with. Eighty-six percent of wealthy and successful people associate with other successful people. However, 96 percent of people with financial problems relate to other people with financial problems.

If you want to end your financial struggles, you need to evaluate each of your relationships and determine whether they are a Wealth Relationship (with someone who can help you up) or a Poverty Relationship (with someone who holds you back). Start spending more and more time on your Rich Relationships and less and less time on your Poor Relationships. Rich Relationships can help you find a better job, refer you to new business or open doors of opportunity.

7. Know your primary purpose.

This is the last habit of the rich, but it may be the most important. People who pursue a dream or a primary purpose in life are by far the richest and happiest among us. Because they love what they do for a living, they are happy to devote more hours each day to their purpose.

Chances are that if you don’t have enough income from your job, it is because you are doing something you don’t particularly enjoy. When you can earn a sufficient income doing something you love, you will have found your primary purpose.

Believe it or not, finding this purpose is easy. The process is as follows:

• Make a list of everything you can remember that made you happy.
• Highlight the items on your list that involve a skill, and identify that skill.
• Rank the top 10 items in the order in which they make you happy. Whatever makes you happiest of all gets 10 big points.
• Now rank the top 10 items according to their earning potential. The most lucrative skill of all is worth 10 points.
• Add the two ranked columns together. The highest score represents a potential main purpose in your life. Presto!
• As you can see, the differences between rich and poor are simple, sometimes intuitive, but not insignificant. If you set out to adopt the 16 habits, you are almost guaranteed to improve your financial situation.