Building wealth is one of the most common goals out there, but it’s not as easy or as hard as you might think. The key to building health is developing wealth-building habits, and learning how to be a bit better with your money.
That’s not complicated, but learning how to build wealth can take a lot of time and patience, and some people never get there.
If you want to learn wealth-building habits and secure your financial future, you’re in the right place.
In this post, I’ll explore some of the best wealth building habits you need for a better financial life and much more. Let’s get started!
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Secrets To Building Wealth
The truth is that the biggest secret to building wealth is discipline. Creating good financial habits takes time and dedication, but it’s absolutely critical if you want to guarantee your financial future.
There’s no such thing as a get-rich-quick scheme that works for everyone, but there are a lot of things you can do if you want to start building future wealth today.
Most of the secrets to building wealth are focused on good money habits, controlling your monthly expenses, and creating healthy financial relationships that help you meet your financial goals.
So, while none of these tips are an instant fix for building wealth, all of them can help your financial situation and make it easier to build wealth and work toward a better future.
Top Wealth Building Habits
Here are some of the most important wealth-building habits to help you get started. You might not have as much money as today’s billionaires, but you don’t need to be rich to use these habits to invest wisely and build wealth.
Ready to set the stage for your financial future?
Surround Yourself With Successful People
It might be a little cliche, but this is actually one of the most important wealth-building habits you can have.
But, first, we might need to redefine what ‘successful people’ means in this context. We’re not saying you need to go out immediately to check if your acquaintances have a million dollars in their savings accounts.
Instead, focus on surrounding yourself with driven, capable, and supportive people. These people are more likely to be successful, however, they define success, and are going to be better support for you on your own wealth journey.
Plus, successful people are more likely to be supportive of your spending habits, understand when your financial plan doesn’t have room for going out and partying every night, and will probably help you develop your own wealth-building habits.
This is all about cultivating a social group that understands your financial goals, have responsible personal finance habits and understand your focus on financial independence.
Plus, successful people are a great support network to have for your financial endeavors, especially if you want to become an entrepreneur.
In fact, many millionaires credit this as being the single most important wealth-building tool you can have.
Don’t Compare Yourself With Others
It’s easy to compare yourself with others, especially when it comes to personal finance. The problem is that comparisons make it easy to get jealous, discouraged, or even angry if your financial path doesn’t look like the people you’re comparing yourself with.
That’s critical because all of those negative emotions can make it harder to focus on your own wealth-building habits, or on developing the skills and opportunities you need to start making more money.
If you really want more money, financial freedom, and to build wealth for the future, you should focus on yourself and your wealth-building habits, not anyone else’s.
The good news is, once you start focusing on your own wealth and your personal finance journey, your income will probably go up and your finances will start to make more sense. That’s because you’re building habits you need for making money, making good financial decisions, and learning how to use your extra income to generate even more money.
Start Investing As Soon As Possible
Investing is one of the best ways to start building wealth and meet your financial goal. Investing into mutual funds and index funds is easy, accessible, and relatively safe compared to other kinds of investment.
That means that you don’t need to be a financial wizard to invest in the stock market and start making money in an investment account.
Of course, if you have the time to start learning the ins and outs of compound interest, stock prices and market trends, and predicting which kinds of investments are going to make extra money in the next year, you might do even better.
But you don’t need to go to that extra effort to start making more money with an investment account.
The reason you should invest as soon as possible is to take advantage of compound interest. Your returns will start to grow exponentially the longer you invest – making it an important wealth building habit.
Not sure how to invest? It can be easy to get overwhelmed, but I recommend using an app like Acorns to invest in the stock market.
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If you want to make investments in real estate, I recommend using a platform like Fundrise. You can get started with a low initial investment and make passive income. Register below to get started!
Don’t Be Afraid Of Investing
A lot of people are afraid of investing because they don’t see the stock market as a wealth-building tool, but instead as an unpredictable drain on your savings account and income.
The truth is that the stock market is going to go down sometimes, and you’ll probably lose money when it does, but that doesn’t mean that good financial planning doesn’t require investing.
Overall, markets tend to go up, which means that there’s a lot of extra money you can make from being invested. When your money is sitting in your savings account there aren’t as many opportunities to make money.
So, once you have an emergency fund and have been saving money long enough to have a good safety net, it’s time to start investing. Sometimes, you really do have to spend money to make money.
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Stay Away From Unnecessary Debt
A lot of people fund their lifestyle with credit card debt and other forms of debt. But, if you want to start building good financial habits living debt-free is one of the biggest ways to start.
If you already have credit card debt, student loan debt, a mortgage, or other debts you can start by working on paying down those accounts, or at least not adding to them.
Debt is one of the biggest barriers to saving money because interest rates mean debt is hard to pay off.
Sometimes debt is necessary, so you don’t need to be debt-free all the time to build wealth or win financial freedom. But you should think carefully about any debt you’re about to take on and whether that money could come out of your savings account or other bank accounts instead of on credit.
Any time you take on new debt you should also have a plan for how to pay it off, and you should know how much you’ll end up paying to pay it off.
Having a monthly budget is one of the easiest ways to avoid unnecessary expenses.
Pay Attention To Your Financial Habits
Building an emergency fund in your bank accounts and keeping an eye on your checking account are only two of the good financial habits you should be paying attention to.
It’s also important to figure out how you spend money, which months are likely to be more expensive, and what kinds of situations and emotions are more likely to make you spend money you can’t afford.
All that information will help you predict your own financial behavior and give you a lot more control when it’s time to make a financial decision.
Of course, this won’t always help with unexpected expenses, which is why one of the habits you should have is learning to save money and set aside resources in case of an emergency.
Pay attention to your monthly needs, other expenses, and how much you spend on things like leisure, luxuries, and relaxation. If you can cut unnecessary spending (without getting rid of all your leisure expenses) that may be one of the best ways to start saving and building wealth.
Plan For Your Financial Future
Having a financial plan is one of the best ways to help control your spending, make sure you’re saving enough for the future, and to increase your net worth. Have financial milestones you’re working toward, and some of them should be treats.
For instance, once you’ve hit a specific financial milestone, it’s alright to plan on going on your dream vacation. That kind of motivation will help you stick yo your wealth-building habits and make it easier to budget and stick to it.
Think about getting a Roth IRA, or other investment and retirement accounts. The sooner the better. If you want to own a home, have a plan for how you can get there. Want to own rental properties? Budget and plan for those too.
A lot of times extra income leads to lifestyle inflation, and lifestyle inflation can make it hard to meet your long-term goals. Having a plan gives you a roadmap for achieving your goals and not outspending your ambitions.
Think About How Much Money You Need For Major Life Goals
We already touched on this a bit in the previous section, but it’s a good idea to have estimates about how much certain goals are going to cost.
People famously underestimate how much money they’re going to need for retirement, for instance, which impacts how they spend and what kind of retirement investments they make, and can make it harder to have a comfortable retirement.
Spending a few years now living below your means to make sure your investment in your future and can meet your financial goals is a small price to pay.
Live Within, Or Below, Your Means
That’s right, one of the top habits of wealthy people is living below their means, at least at first. Having a living paycheck is important for this step, but assuming you’re making a reasonable amount of money you should be saving for your future as well.
Set aside some of your income to go into your savings account, for investing, and to work toward your financial goals.
That might mean you can’t live as comfortably now as you’d prefer, but you’ll be glad you did when you’re reaping the benefits later.
Develop Passive Income Streams
Passive income is one of the most important ways wealthy people got where they are.
A passive income stream is just the name for anything you can do that makes money without you having to put in a bunch of work to get there.
That’s important because it’s one of the best, and easiest, ways to build future wealth.
Things like owning rental properties, selling a class online, or even making royalties on a book or song you wrote can work as passive income streams.
The more passive income streams you have, the more secure your finances are likely to be. That’s because even if one income stream is disrupted, you have other sources of income you can fall back on.
Looking for passive side hustles? Try these:
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Focus On Long-Term Goals And Aspirations
Short-term thinking leads to reckless spending and can get in the way of increasing your net worth.
Building a long-term mindset, where you think about how today’s financial decisions will impact tomorrow’s wealth, will help you stay ahead of your financial goals.
Think about writing down your goals and aspirations, and revisit that list anytime you’re thinking about straying from your financial plan.
Sometimes a little reckless spending is a good thing, especially if you have an unexpected opportunity or if spending helps you get through a hard period. But, most of the time you should be focused on the long-term, rather than the short- or mid-term.
Related: How to Invest $150k (15 Best Methods)
Build Wealth By Saving Before You Spend
We’ve talked a bit about savings already, but saving before you spend is one of the most important ways to do that.
This refers to putting money into your savings account or investments before you spend it anywhere else. Sometimes this is also called paying yourself first, but saving first emphasizes that this money should be going into your accounts for future use, not spent on short-term luxuries today.
Your spending budget should come out of the money set aside after saving money, not before.
Start Saving Automatically
Saving automatically makes building wealth a lot easier. That’s because you don’t actually have to think about putting money away when you’ve automated the process.
So, instead of saving money manually, where you have to think about how much you’re putting aside every pay check, set an automated amount to come out of your checking account and go into your savings account every time you’re paid.
Automatic savings can also be based on your spending, or you can set different amounts of savings for different kinds of transactions.
No matter how you do it, saving automatically will give you the resources you need to increase your net worth and ensure your financial freedom.
Develop High Income Earning Skills
This might seem obvious, but if wealth is one of your most important goals you should think about building the kind of skills that are in-demand and help you make a lot of money in the market.
The truth is that almost any skill can be a high-earner if you know how to market yourself, but there are some skills and knowledge sets that will automatically help you earn more.
Things like becoming a doctor, learning marketing techniques, learning programming, or any other in-demand skill will help you make more money.
Once you’re making more, saving money, investing, and increasing your net worth will all be easier.
Learn To Set Better Financial Goals
Good financial goals are important for building wealth and becoming more successful.
Some financial goals, like buying a specific luxury vehicle, might seem like a good idea in the moment, but they aren’t necessarily goals that help you protect your financial future. Those kinds of things can be celebrations of certain milestones or ways you treat yourself to reward your commitment, but they shouldn’t be your primary goal.
Goals can be things like owning a home, having enough money for a large monthly payment out of your retirement, or having enough money to open your business, and then making a certain amount of monthly revenue from that business.
These are the kinds of goals that protect your financial future and make it easier to succeed and become wealthy.
If you aren’t sure what kinds of goals you should be working toward, consider talking with a financial planner and getting their advice on your next moves.
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Final Thoughts on Wealth Building Habits
One of the most critical ways you can protect your financial future is by always continuing to learn. Financial markets are always changing, as are your personal finances. The more you know, the better prepared you’ll be to deal with tomorrow’s challenges.
So, even if you’ve already achieved your financial goals and won the kind of wealth you’ve been dreaming of, you should still keep learning, growing, and building your financial future.
After all, there’s no limit to how much success you can have in life, only to your ambition and how hard you’re willing to work to get there.
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