[Financial] Habits of the Rich

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Wilhou2015
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[Financial] Habits of the Rich

Post by Wilhou2015 » Sun Nov 11, 2018 11:41 am

Many people on this forum are very successful financially. Many of you are probably very disciplined.

What are your habits that elevate your success?

Do you read, take classes, have a mentor? Do you have a daily routine or habit that sets you apart? I would love to hear what habits you use to develop yourself personally or professionally.

KlangFool
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Re: Habits of the Rich

Post by KlangFool » Sun Nov 11, 2018 11:50 am

OP,

LBYM.

"Pay Yourself First".

It is very simple but hard.

Save 1 year of your current annual expense every year. Do this for 20+ years. You will be rich.

KlangFool
Last edited by KlangFool on Sun Nov 11, 2018 12:05 pm, edited 1 time in total.

alwayshedge
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Re: Habits of the Rich

Post by alwayshedge » Sun Nov 11, 2018 11:57 am

I'm not wealthy by any means but I think the following is a huge factor in creating long term wealth...

"Don't try to keep up with Joneses."

I see so many friends of mine that focus so hard on keeping up with everyone else as if it's all a giant competition..

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celia
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Re: Habits of the Rich

Post by celia » Sun Nov 11, 2018 12:07 pm

Pay yourself first by setting up automatic transfers to savings (that you don't withdraw).

Lifelong learner. (Advance in your career and learn to do things yourself, besides making you a more interesting person.)

Prepare your own taxes, so you learn to understand the tax code and how it impacts future financial decisions you will make.

averagedude
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Re: Habits of the Rich

Post by averagedude » Sun Nov 11, 2018 12:27 pm

Im an average wage, blue collar worker who will retire in my 50's with no pension. This is what i have done.
1. Set written goals early in life with an action plan.
2. Didn't have any unplanned pregnancies.
3. Lived below my means when purchasing housing and transportation. Never went into debt except to purchase a modest house.
4. Educated myself at an early age on investing. Passively invested 100% in stocks for over 25 years
5. Automated my savings, where i never missed it.
The formula for wealth is money x time x rate of return

Bajadoc
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Re: Habits of the Rich

Post by Bajadoc » Sun Nov 11, 2018 12:38 pm

Decide that you deserve to keep what you earn. Building personal wealth is one of the best things a person can do for themselves and their family.

squirm
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Re: Habits of the Rich

Post by squirm » Sun Nov 11, 2018 12:46 pm

Understand sometimes people just get lucky. The area where I grew up, home prices have give up about 100x in the past forty years. Some of my family members are very rich because of that. That's just being lucky.

My wife and I work as a team and live under our means to some degree. We are pretty well off because we both have bachelor's in stem and both work in professional environment. My wife grew up extremely poor and rarely wants to purchase anything for herself, although I encourage her to do so. We don't have expensive hobbies either, I just like to work on the homes we have.

I might add that I've always been interested in financing since my twenties, I had a professor to thank for that.

Traveler
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Re: Habits of the Rich

Post by Traveler » Sun Nov 11, 2018 1:02 pm

Get enough education to allow for a higher than normal income and then live as if you make a lot less

visualguy
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Re: Habits of the Rich

Post by visualguy » Sun Nov 11, 2018 1:07 pm

Having a high income is the most important factor, so focus on a career that can make you a lot of money. If the spouse does that too, this can make a big difference as well. It's much easier to save and invest when a lot of money is coming in than when you have to pinch pennies and struggle with debt. Family help in early adulthood also makes a big difference in families that can pull that off.

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Phineas J. Whoopee
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Re: Habits of the Rich

Post by Phineas J. Whoopee » Sun Nov 11, 2018 1:15 pm

Traveler wrote:
Sun Nov 11, 2018 1:02 pm
Get enough education to allow for a higher than normal income and then live as if you make a lot less
That's what I did. First I continued my grad student lifestyle while I paid my student debts (around $50,000, inflation-adjusted), and as I finished with each of several creditors I saved the payments instead of spending more. Then I invested.

Save and invest. Save and invest. Save and invest.

There are many people who, through no fault of their own, have no opportunity to use such a plan.

PJW

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FreeAtLast
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Re: Habits of the Rich

Post by FreeAtLast » Sun Nov 11, 2018 1:36 pm

alwayshedge wrote:
Sun Nov 11, 2018 11:57 am
I'm not wealthy by any means but I think the following is a huge factor in creating long term wealth...

"Don't try to keep up with Joneses."

I see so many friends of mine that focus so hard on keeping up with everyone else as if it's all a giant competition..
^^^^This. Every time you think "Ohh, I just have to have (buy) that!", take a deep breath, step away from your wallet and perhaps go for a long walk/run. Try as hard as you can to analyze all the emotions coursing through you when you are considering an expensive purchase. Repeat to yourself: "Do I really, really, really need to spend this amount of money on this item? Why does it seem so important to me? What are my less expensive options, which include not making any purchase at all?"
Illegitimi non carborundum.

staythecourse
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Re: Habits of the Rich

Post by staythecourse » Sun Nov 11, 2018 1:39 pm

averagedude wrote:
Sun Nov 11, 2018 12:27 pm
Im an average wage, blue collar worker who will retire in my 50's with no pension. This is what i have done.
1. Set written goals early in life with an action plan.
2. Didn't have any unplanned pregnancies.
3. Lived below my means when purchasing housing and transportation. Never went into debt except to purchase a modest house.
4. Educated myself at an early age on investing. Passively invested 100% in stocks for over 25 years
5. Automated my savings, where i never missed it.
The formula for wealth is money x time x rate of return
Man this should be stickied. We spend all this time wondering if a blue collar, average income guy can be rich. Well, here is the evidence and great advice for all how to do it.

I love these points and agree.

My advice, is focus on no. 1 on this list. You will see way too much "fortune cookie" advice even on this board. Make very specific goals and be very specific on HOW to attain those goals in a very specific time line. You should have short term (1-2 years), medium term (5-10) and long term (20 year) goals to check off. Like running a race if you are trying to make a specific time, i.e. goal you time each leg to see if you are pace.

In my experience, no matter how intelligent or not or rich or not (in matters of income) there are VERY few folks who think even 1 step ahead. Those that think 2 steps is probably 5% or less of the folks out there and those that think 3 steps ahead is down to <1%. Anybody you see that is successful had a preformulated plan to get to where they were trying to get to. No one who is self made goes, "Well I just messed around it just finally happened".

As I tell many friends and family I am probably one of the dumbest in the family, but one of the most successful financially and A LOT of it has to do with simply planning.

Good luck.
"The stock market [fluctuation], therefore, is noise. A giant distraction from the business of investing.” | -Jack Bogle

sambb
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Re: Habits of the Rich

Post by sambb » Sun Nov 11, 2018 1:52 pm

investing in oneself to produce skills, experiences, or education to lead to higher income is far more valuable than any mutual fund or emergency fund. also, higher savings rate is far more valuable than index funds.
Last edited by sambb on Sun Nov 11, 2018 1:54 pm, edited 1 time in total.

Dottie57
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Re: Habits of the Rich

Post by Dottie57 » Sun Nov 11, 2018 1:52 pm

For me, the big one s #5 - automating your saving/investing.

I did not plan, but knew that saving consistently would be better than not saving consistently. I learned basic math.

runner3081
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Re: Habits of the Rich

Post by runner3081 » Sun Nov 11, 2018 2:42 pm

Learn to have a thick skin and don't care what others think. Small house, ugly car, generic food, 32" TV, etc, etc. Who cares!

Don't think that buying garbage will make you feel any better.

Badger1754
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Re: Habits of the Rich

Post by Badger1754 » Sun Nov 11, 2018 3:21 pm

As an early career millennial who joined the labor market shortly before 2008, and who has a long family oral tradition of being imprisioned, persecuted, and expropriated under Communism.. I live by the following (in no particular order):
  1. Live within your means.
  2. Pay yourself first.
  3. Put aside money for emergencies (actual emergencies).
  4. Ignore the “noise” (CNBC, “financial advisors” trying to sell you stuff). This might be actually a healthier way to live life. I get my news from the NYTimes and the WSJ. My wife gets her news from Facebook and cable TV. I am infinitely calmer during elections. :D
  5. Keep things in perspective.
  6. Don’t let sentiment, emotion, or a “gut feeling” cloud your judgment when there are facts that can be relied upon. In particular, I’ve found that having a basic facility with finance and math (e.g. able to build an Excel model) helps streamline the decision-making process which as in turn helped me avoid several potentially bad decisions.
  7. Invest in the future (monetarily, educationally, philanthropically).
  8. Sic transit gloria mundi — nothing good lasts forever, so don’t expect it to.
  9. There is still a greater concentration of talent, hunger, entrepreneurialism, chutzpah, grit, accessibility, and freedom in the US economy than anywhere else in the world that attracts the aforementioned attributes like moths to a flame. So, while nothing good lasts forever, Rome took over a thousand years to fall.
  10. Stay active (physically, intellectually, economically) — idle hands do the devil’s work; idle money does no work.
  11. Take ownership and responsibility for your own success. No one aside from your parents will give you anything. In fact, there is a large population of people who would freely and shamelessly take advantage of you. But it is up to you (and only you) to find and pursue those opportunities that will lead to success.
  12. A piece of advice I wish all millennials would reflect upon: remember that you can’t save the world if you become a casualty in the process.
  13. Don’t reinvent the wheel — stand on the shoulders of giants!
PS. I have been a Berkshire Hathaway shareholder since I was a teenager (the little shares!) I just showed my wife this list, and she accurately pointed out that pretty much all of this list (except maybe #12) comes from the accumulated wisdom of Warren Buffett’s annual investor letters. So I will add a 13th bullet: don’t reinvent the wheel — stand on the shoulders of giants!
Last edited by Badger1754 on Sun Nov 11, 2018 3:53 pm, edited 5 times in total.

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Re: [Financial] Habits of the Rich

Post by LadyGeek » Sun Nov 11, 2018 3:40 pm

This thread is now in the Personal Finance (Not Investing) forum (personal finance). I retitled the thread for clarity.

Please stay focused on the financial aspects.
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corn18
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Re: Habits of the Rich

Post by corn18 » Sun Nov 11, 2018 3:41 pm

My habits are easy. LBYM and a healthy dose of paranoia. The paranoia part drives me to prepare for the worst and never accept the status quo. That has lead me to what some would call luck. Lucky that I got that promotion. Lucky that I have survived many re-orgs and layoffs. I call it luck as well, but my definition of luck is the intersection of preparation and opportunity. Combine that with a clear set of goals and objectives for my life and I would appear to be very lucky.

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BoglePaul
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Re: [Financial] Habits of the Rich

Post by BoglePaul » Sun Nov 11, 2018 3:57 pm

Aim to be good at what you do. Get a new certification every 3 years (every 2 years in your 20's). The money will come.

Badger1754
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Re: [Financial] Habits of the Rich

Post by Badger1754 » Sun Nov 11, 2018 4:06 pm

This thread reminded me of a philosophy class I took in college where we discussed Max Weber’s Protestant Work Ethic and the Spirit of Capitalism. One quote just jumped out in my memory where Weber quotes Ben Franklin, which I reproduce below (shamelessly cribbed from Wikipedia) — which neatly encapsulates the Bogleheadian values of frugality, opportunity cost, risk aversion, and the almost moral imperative to be productive:
Remember, that time is money. He that can earn ten shillings a day by his labor, and goes abroad, or sits idle, one half of that day, though he spends but sixpence during his diversion or idleness, ought not to reckon that the only expense; he has really spent, or rather thrown away, five shillings besides. [...]

Remember, that money is the prolific, generating nature. Money can beget money, and its offspring can beget more, and so on. Five shillings turned is six, turned again is seven and threepence, and so on, till it becomes a hundred pounds. The more there is of it, the more it produces every turning, so that the profits rise quicker and quicker. He that kills a breeding feline taint, destroys all her offspring to the thousandth generation. He that murders a crown, destroys all that it might have produced, even scores of pounds.

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GerryL
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Re: [Financial] Habits of the Rich

Post by GerryL » Sun Nov 11, 2018 4:14 pm

Sitting here in retirement with a healthy portfolio, I have to reiterate the LBYM mantra. Living below your means is the most fundamental step -- or habit -- for building wealth. During some periods of my life I had to live WITHIN my means, but whenever possible I put something aside, for example, if I got a monetary gift or bonus.

I came of age at a time when single women could not get credit. That unfairness may have saved me from making mistakes that are too easy for young people today to fall into. I could not spend money I didn't have, so I didn't. (Yes, I know there are different rules for people starting businesses.)

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FelixTheCat
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Re: [Financial] Habits of the Rich

Post by FelixTheCat » Sun Nov 11, 2018 4:28 pm

Two simple rules for me.

Pay myself first. Maxed out my 401k. Contribute to taxable investments.

Live below my means. I never cared about the big houses my friends have nor the latest cars.
Felix is a wonderful, wonderful cat.

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White Coat Investor
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Re: [Financial] Habits of the Rich

Post by White Coat Investor » Sun Nov 11, 2018 4:31 pm

Wilhou2015 wrote:
Sun Nov 11, 2018 11:41 am
Many people on this forum are very successful financially. Many of you are probably very disciplined.

What are your habits that elevate your success?

Do you read, take classes, have a mentor? Do you have a daily routine or habit that sets you apart? I would love to hear what habits you use to develop yourself personally or professionally.
Choose work that you enjoy. Choose work that you are good at. Choose work that pays well. Then work hard.

Carve out a large portion of your income and use it to build wealth.

Find a reasonable way to invest.

That's really about all there is to it.
1) Invest you must 2) Time is your friend 3) Impulse is your enemy | 4) Basic arithmetic works 5) Stick to simplicity 6) Stay the course

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Re: [Financial] Habits of the Rich

Post by KyleAAA » Sun Nov 11, 2018 4:42 pm

I mostly just got lucky. I was always good in school, but so are many people. I chose the right major and have been more lucky than unlucky ever since. I suspect that's the case for most financially successful people. It certainly helps that both my wife and I are reasonably frugal. So I would say get lucky, and then be frugal enough to stay lucky.

Regattamom
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Re: [Financial] Habits of the Rich

Post by Regattamom » Sun Nov 11, 2018 5:20 pm

Lots of good advice, but I would add that choosing your partner carefully is extremely important in maintaining financial health. My husband and I have never had an argument about finances. Our financial priorities and values are the same and we trust each other to stay true to our commitments and our financial plans. I know too many couples that don't even know how much their spouse spends or where their money goes every month.

We plan and make goals. We have yearly, five & ten year goals plus our retirement goals. We check in and discuss our finances quite often to keep ourselves motivated and on course.

My husband is an extremely hard worker and also very curious (he never stops learning.) This has helped him to achieve an executive level position with a great company.

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Re: [Financial] Habits of the Rich

Post by basspond » Sun Nov 11, 2018 6:11 pm

Give 10%
Save at least 10%


Never impulse buy or invest. I just bought something that I know I had a coupon back home. Could have saved several bucks. And believe me small bucks do add up.

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Sandtrap
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Re: [Financial] Habits of the Rich

Post by Sandtrap » Sun Nov 11, 2018 6:23 pm

Remember what it was like to be "dead broke". :shock:
Resolve to move in the opposite financial direction no matter what.
:happy

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dwickenh
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Re: [Financial] Habits of the Rich

Post by dwickenh » Sun Nov 11, 2018 6:32 pm

Sandtrap wrote:
Sun Nov 11, 2018 6:23 pm
Remember what it was like to be "dead broke". :shock:
Resolve to move in the opposite financial direction no matter what.
:happy
I remember that!! At 23 I cashed in my only mutual fund to pay for a runaway credit card balance. Boy did that head me in the
opposite direction.

Great point Sandtrap!!
The market is the most efficient mechanism anywhere in the world for transferring wealth from impatient people to patient people.” | — Warren Buffett

Gretchen
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Re: [Financial] Habits of the Rich

Post by Gretchen » Sun Nov 11, 2018 6:32 pm

1. Two wage earners if it works for your family situation. It did for us, but it doesn't for many.
2. Fund your tax-deferred savings vehicles as early as possible. Then move toward maxing them out.
3. Buy a reasonable home. It's forced savings.
4. Have aging parents live with you if it works for your family situation. We had one on each side with us for years, fortunately not at the same time. Instead of spending thousands per month, they were contributing toward our expenses and left small estates.
5. Ignore the ups and downs of the market. I did this in 2001-2003 because I was hiding from reality, but fortunately, that was the right thing to do. By 2008, I knew to ignore account balances and just accelerate my 401(K) contributions to buy in at low prices.
6. Be very sensible about cars. Buy used, or buy new and hold until the resale value is below zero unless the gas tank is full. (We've done both.) Our son once asked us why we never got a luxury car, and we told him we spent the money on his education instead.
7. Get lucky! I had the good fortune to hold equity in the company I worked for, and was dumb enough not to rebalance out of it. When the company sold, about ten seconds before valuations peaked in 2006, it was a forty-bagger.

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Re: [Financial] Habits of the Rich

Post by delamer » Sun Nov 11, 2018 6:41 pm

I don’t live my life based primarily on how my choices will affect my finances.

However, I do consider how all my decisions will impact my finances and make sure that I recognize both the financial upsides and downsides.

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Re: [Financial] Habits of the Rich

Post by Clever_Username » Sun Nov 11, 2018 6:48 pm

basspond wrote:
Sun Nov 11, 2018 6:11 pm
Never impulse buy or invest. I just bought something that I know I had a coupon back home. Could have saved several bucks. And believe me small bucks do add up.
As someone with a good math background, please let me confirm that small numbers do, in fact, add up :-)

OP, let me add that I am working in a manner similar to what WCI describes here, although not in the field he or she chose. Whether or not I'm wealthy or paid all that well is a matter of perspective.
White Coat Investor wrote:
Sun Nov 11, 2018 4:31 pm
Choose work that you enjoy. Choose work that you are good at. Choose work that pays well. Then work hard.

Carve out a large portion of your income and use it to build wealth.

Find a reasonable way to invest.

That's really about all there is to it.
"What was true then is true now. Have a plan. Stick to it." -- XXXX, _Layer Cake_

averagedude
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Re: [Financial] Habits of the Rich

Post by averagedude » Sun Nov 11, 2018 8:34 pm

I would also like to add how luck has played a role in my success.
1. Im lucky that i was born in the US.
2. Im lucky that i had good parents.
3. Im lucky that my family has good mental and physical health.
4. Im lucky to have married a great spouse.
I would also like to add that the harder i work, the luckier i get.

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Re: [Financial] Habits of the Rich

Post by catdude » Sun Nov 11, 2018 9:17 pm

averagedude wrote:
Sun Nov 11, 2018 8:34 pm
I would also like to add that the harder i work, the luckier i get.
A slightly different version of this, from Ben Hogan (the legendary golfer) -- "The more I practice, the luckier I get."
catdude | | All generalizations are false, including this one.

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Re: Habits of the Rich

Post by RadAudit » Sun Nov 11, 2018 9:23 pm

Bajadoc wrote:
Sun Nov 11, 2018 12:38 pm
Building personal wealth is one of the best things a person can do for ... their family.
Possibly. Just don't expect any expressions of gratitude for whatever sacrifices you have to make to achieve your goal.
FI is the best revenge. LBYM. Invest the rest. Stay the course. - PS: The calvary isn't coming, kids. You are on your own.

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Re: [Financial] Habits of the Rich

Post by Sandtrap » Sun Nov 11, 2018 9:38 pm

dwickenh wrote:
Sun Nov 11, 2018 6:32 pm
Sandtrap wrote:
Sun Nov 11, 2018 6:23 pm
Remember what it was like to be "dead broke". :shock:
Resolve to move in the opposite financial direction no matter what.
:happy
I remember that!! At 23 I cashed in my only mutual fund to pay for a runaway credit card balance. Boy did that head me in the
opposite direction.

Great point Sandtrap!!
I know quite a few folks with very very substantial wealth with the same motivations. Many with parents from the depression era who also grew up poor. I suspect that no amount of wealth can completely take away the insecurity of those who have experienced poverty.

I think it was "Alan Laken's" book that said in so many words that powerful bad experience or failure can be a powerful motivator to achieve.

2015
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Re: [Financial] Habits of the Rich

Post by 2015 » Sun Nov 11, 2018 10:58 pm

Never stop reading (non-fiction business books), growing, or engaging in self-development. Never forget that successful, effective, and high performing men and women always do what they have to do, in advance of when they have to do it, whether they feel like it or not.

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Re: [Financial] Habits of the Rich

Post by heyyou » Mon Nov 12, 2018 4:05 am

Morgan Housel wrote that most people are not good with money, so to have money you need to act differently than most people.

To do as mentioned by the other posters, learn to feel good about your frugal behaviors. Somehow cultivate a sense of having enough so you can enjoy a good life even while spending less than your co-workers.

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Re: [Financial] Habits of the Rich

Post by bearcub » Mon Nov 12, 2018 6:02 am

Years ago my former company paid for my college. Maxed out 401k when I was able to. Payed cash for cars. Camry 17 years, today have Highlander for 14 so far. Took out 15 year mortgage, worked lots of overtime + payed it off in 7. I enjoy living a minimalist lifestyle. Retired early. Not rich but OK. Spouse is not a minimalists.LOL.

pennywise
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Re: [Financial] Habits of the Rich

Post by pennywise » Mon Nov 12, 2018 6:59 am

Be boring

Invest in boring index funds instead of those sexy financial products the advisors are so excited to show you

Stay married to the boring girl/guy you started out with instead of that sexy girl/guy you are finding so exciting

Live in the boring house you bought because you could afford it, instead of that sexy McMansion the realtor convinces you is the exciting place you need to be

Drive the boring fuel efficient safe car you already finished paying for instead of that sexy sports car that will give you an exciting ride down the road

Be boring

Eventually you will look up and realize that all those boring choices have brought you to a pretty exciting place in life-financial independence

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Re: [Financial] Habits of the Rich

Post by Swampy » Mon Nov 12, 2018 9:20 am

I was a typical American as best described by Winston Churchill's quote
“You can always count on the Americans to do the right thing after they have tried everything else.”
Long before Bogleheads and the FIRE ideology were widely known, I was doing the best I could to get ahead by being a good earner and saver. Unfortunately, I was not educated in the real costs of trusting financial professionals, especially brokers, trading or investing in high cost mutual funds and using advisors with their 1% (or more) management fees. One of the biggest lies I heard was 'Why settle for average when you can get above average returns with professional active management?' Those above average returns never materialized, yet those high management fee's appeared and never went away!

I remained frugal, saving aggressively except for a brief disastrous period, and would frequently have self doubts about what I was doing as I would see my neighbors literally 'have it all' while living large. Then I found out otherwise. One of my favorite commercials sums it up: www.youtube.com/watch?v=PV_YAeXOSiw

Of course, the real answer is to live within (and beneath) your means. That is obtained by WANTING what you have, not always HAVING what you want as dictated by others, as portrayed by Madison Avenue purveyors of lies and false promises, or by keeping up with the Joneses.

Even though I was already doing the 'right stuff' as advocated in The Millionaire Next Door over twenty years ago, my net worth never really took off until six years ago when, in a bout of desperation, I chanced upon Bogle's Little Book of Common Sense Investing and Bogleheads which guided me to get away from financial porn as well as high ER mutual funds, 'advisors,' and trading individual stocks.

One great satisfaction I now have is seeing the endless procession of flashy 'wannabe's' trying to impress others while digging a deep hole for themselves and running on a never ending work and spend treadmill. They are not interested in what I have to say, but I'm sure they have their advisors!
If you fail to plan, you plan to fail. | Failure is not an option. | If I have seen further, it is because I was carried on the shoulders of giants.

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Re: [Financial] Habits of the Rich

Post by Cruise » Mon Nov 12, 2018 1:45 pm

-While others party--you study. That is, get great grades in school, major in a subject matter that will enable you to enter a lucrative (or at least stable) profession. Go to graduate school and be the hardest-working wonk.

-Select your mate well. Someone with a similar work ethic means that this partner understands putting work before play, and deferring pleasure until it is earned. A similar work ethic in your partner means that the partner might also have a lucrative or stable career. Having similar values increases the likelihood that you will not divorce, and divorce is the surest way of depleting your assets by 50%.

--Live below your means. Don't spend $2M on a house just because you can afford it. Get the $500k/$1M house instead. Same with car, TV, etc.

--As all BH know, invest early and often, and use low-cost index funds.

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wabbajack
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Re: [Financial] Habits of the Rich

Post by wabbajack » Mon Nov 12, 2018 4:07 pm

Understand opportunity cost.
Cruise wrote:
Mon Nov 12, 2018 1:45 pm
-While others party--you study.
Classic example of opportunity cost. Understand that every minute you spend doing X is a minute you cannot spend doing Y. Same with money.

Dottie57
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Re: [Financial] Habits of the Rich

Post by Dottie57 » Mon Nov 12, 2018 4:13 pm

BoglePaul wrote:
Sun Nov 11, 2018 3:57 pm
Aim to be good at what you do. Get a new certification every 3 years (every 2 years in your 20's). The money will come.
I never did certifications. But being flexible in learning new technology heled immensely to stave off being part of Staff reductions.

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VictoriaF
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Re: [Financial] Habits of the Rich

Post by VictoriaF » Mon Nov 12, 2018 4:20 pm

Victoria's Secrets of becoming rich:

1. Select a peer group of people you want to resemble. I bet many Bogleheads became more wealthy and more successful after they have joined the Forum.
2. Be always learning. Pursue advanced degrees, professional certifications, and marketable skills. Do NOT follow your passion; read Cal Newport's books So Good They Can't Ignore You and Deep Work.
3. Get rid of a TV, and you will rid yourself of spurious expenses such as large houses, remodeling, luxury travel, fun cars, and prestigious watches.

Victoria
WINNER of the 2015 Boglehead Contest. | Every joke has a bit of a joke. ... The rest is the truth. (Marat F)

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Re: [Financial] Habits of the Rich

Post by alfaspider » Mon Nov 12, 2018 4:59 pm

VictoriaF wrote:
Mon Nov 12, 2018 4:20 pm
Victoria's Secrets of becoming rich:

1. Select a peer group of people you want to resemble. I bet many Bogleheads became more wealthy and more successful after they have joined the Forum.
2. Be always learning. Pursue advanced degrees, professional certifications, and marketable skills. Do NOT follow your passion; read Cal Newport's books So Good They Can't Ignore You and Deep Work.
3. Get rid of a TV, and you will rid yourself of spurious expenses such as large houses, remodeling, luxury travel, fun cars, and prestigious watches.

Victoria
Magazines were my gateway drug on the automotive front. TV didn't factor. Without fun cars, what's the point of being rich :confused

Which leads me to another point: while LBYM is obviously the key, few people have the constitution to be happy living a life of constant deprivation. It's ok to find something you enjoy that occasionally costs money. However, the key is doing so in a way that continues to allow you to live below your means. If you like cars, don't go out and buy a brand new BMW- buy an old Miata for less than a set of tires for the BMW- you'll have just as much fun if you learn how to drive it properly. There's always a new shiny, but building skills and friends while having unforgettable experiences lasts a lot longer than the thrill of something new.

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Re: [Financial] Habits of the Rich

Post by Mr.BB » Mon Nov 12, 2018 5:29 pm

I am certainty not wealthy, but if you can focus on your long term (specific) goals, the odds will be better that you will achieve success, which should put you ahead of 90% of the people in this country.
Focus on these basic rules:
1) Minimize debt
2) Track your expenses (everything including cash expenses) for one year. This will teach more then you will ever realize about savings.
3) Play with calculators. See what it shows you about the real long term costs of expense ratios, as well as 401k or Roth savings.
4) Have an emergency account. (Talk to anyone who lost their job in 2008). Build up a 1 year nest egg. Hopefully you will never need it, but you will sleep much better at night. And never ever use that money for anything but emergencies!
5) The more you put away when you are young, the less you have to put away when you are older.
6) Don't compare yourself to anyone else. Everyone has different goals, savings tolerances and beliefs. What works for one person may not work for you.
7) Keep learning, and always ask questions!
"We are what we repeatedly do. Excellence, then, is not an act, but a habit."

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munemaker
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Re: [Financial] Habits of the Rich

Post by munemaker » Mon Nov 12, 2018 5:33 pm

alfaspider wrote:
Mon Nov 12, 2018 4:59 pm
Without fun cars, what's the point of being rich?
Security

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Peter Foley
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Re: [Financial] Habits of the Rich

Post by Peter Foley » Mon Nov 12, 2018 5:44 pm

I'm not sure my wife and I are qualified by definition to answer, but we are comfortable in retirement and retired a little on the early side.

1. Live below your means (LBYM).
2. Avoid debt on depreciating assets.
3. Automate savings. Transferring periodic raises to 401ks for retirement contributes to LBYM.

Not absolutely necessary but helpful is to become handy around the house to the extent you don't have to hire expensive professional help. I'm a reasonable plumber, electrician, carpenter, and my wife is a good landscaper, painter and seamstress. All of this combined lowers costs and contributes to LBYM. We both cook and eat out rarely because we would rather eat what we make than that which we are served.

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Re: [Financial] Habits of the Rich

Post by moghopper » Mon Nov 12, 2018 5:50 pm

munemaker wrote:
Mon Nov 12, 2018 5:33 pm
alfaspider wrote:
Mon Nov 12, 2018 4:59 pm
Without fun cars, what's the point of being rich?
Security
Every time I see this, or something similar that touts "security", I can only think of James Thurber.
A large spider in an old house built a beautiful web in which to catch flies. Every time a fly landed on the web and was entangled in it the spider devoured him, so that when another fly came along he would think the web was a safe and quiet place in which to rest.

One day a fairly intelligent fly buzzed around above the web so long without lighting that the spider appeared and said, “Come on down.”

But the fly was too clever for him and said, “I never light where I don’t see other flies and I don’t see any other flies in your house.”

So he flew away until he came to a place where there were a great many other flies. He was about to settle down among them when a bee buzzed up and said, “Hold it, stupid, that’s flypaper. All those flies are trapped.”

“Don’t be silly,” said the fly, “they’re dancing.”

So he settled down and became stuck to the flypaper with all the other flies.

Moral: There is no safety in numbers, or in anything else.

“The Fairly Intelligent Fly” by James Thurber in “Fables for Our Time“(1940)

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Re: [Financial] Habits of the Rich

Post by visualguy » Mon Nov 12, 2018 5:58 pm

munemaker wrote:
Mon Nov 12, 2018 5:33 pm
alfaspider wrote:
Mon Nov 12, 2018 4:59 pm
Without fun cars, what's the point of being rich?
Security
"Rich" means different things to different people, so I never know what a person means when they say that word... It can mean so many things which are not mutually exclusive, of course, but aren't the same thing: income above a certain level (what level?), net worth above a certain level (again, what level?), not having to work, having the resources for a luxurious lifestyle, etc. It's almost a meaningless word.

It's really hard to have a meaningful discussion involving this word unless there's a definition of what is being talked about exactly. For example, I don't consider a person who can't buy a very nice car without worrying about the money to be "rich", but for some others such a person could still be considered "rich".

I think a more accurate title for the thread would be "Habits of the financially sound" which doesn't have the connotation of being able to afford a luxurious lifestyle.

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