[Financial] Habits of the Rich

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills
Sandi_k
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Re: [Financial] Habits of the Rich

Post by Sandi_k » Tue Nov 13, 2018 8:12 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.
Hmm. I don't consider myself overly disciplined, but I have been successful in my line of work. I still consider it a job, not a career. I've never had a mentor. I did take some classes - most especially for computer skills, and for public speaking.

I would say that my willingness to facilitate meetings and speak publicly is probably a big part of why I have been steadily promoted. I also think some of it is due to my personality - I am a very linear thinker and good at synthesizing large amounts of information into action, which works well with the (mostly) men in leadership roles in my profession. I'm not sidelined as "emotional", which I've seen happen to highly educated female colleagues.

I am also a careful negotiator. When I am headhunted to apply for another job, I apply. In some instances, I've taken the new job. In other instances, I have declined it, and used that opportunity to research and request a salary bump at my current job. I am very well paid now (early 50's) and I have an enormous amount of autonomy over my schedule and my workflow.

Habits that elevate my success: don't miss deadlines. Do the hard work. Don't watch the clock - put in the time to conclude what you're working on. Be willing to move into management, and learn those rules & policies. Figure out how to handle conflict. Learn how to say "no" as well as "yes" - people respect you more if you say "no" occasionally. Don't hang out with gossips. Keep confidentiality. Be known as a person who does the right thing, even when no one is looking - your reputation means something. Give credit to others generously.

Personally: marry well. Create peace in your home life as a primary goal. Get at least 7 hours of sleep regularly. Step away from work email when you're at home. Say thank you when your spouse steps up. Choose to do some things that cost more money, but give more joy. Travel the world as possible - it expands your horizons in useful ways. Learn how to DIY for house projects - early on, you'll have less money and more time, so that will be helpful. When you're older (and have more money but less time) you'll know when you're being bamboozled. Take care of your health, and see the doctor annually. Read a lot - you never know what you might learn.

Best of luck!

Wricha
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Re: [Financial] Habits of the Rich

Post by Wricha » Tue Nov 13, 2018 8:46 pm

Rich is a tough term to define. My definition would be $10M for every $100k you need to cover expenses. For example if your lifestyle required ($200k minimum) to cover living expenses you would need to have $20M to be considered rich (my definition). Why? I just made it up. But if you think about it with that kind of buffer (1% withdrawal rate) you would have 3 or 4 times your living expenses being generated every year to cover the fun things! So for the person that needs $200k for living expenses, they would generated at least additional $600k on their $20M for the extras. $20M is not going to be made by being frugal, investing in index funds, 60/40 allocation, rebalancing, other Boglehead rules of thumb, on a $200k/yr salary. Rich is not in the cards for this person. Well off yes. With that said:

Habits/skills
1. Take risks (willing to risk it all)
2. Real estate (leverage)
3. Business owner (few employed folks are rich many are well off)
4. Think big and set no limits
5. Parlay any truly unique skills (athletes, actor, new ideas)
6. Build scale quickly
7. Passionate about being rich
8. Marry well (no divorce) or marry rich (shortcut)
9. Be comfortable with leveraging
10. Be extremely confident
11. Be disagreeable, be willing not to be liked

Wilhou2015
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Re: [Financial] Habits of the Rich

Post by Wilhou2015 » Tue Nov 13, 2018 9:55 pm

SoAnyway wrote:
Mon Nov 12, 2018 10:37 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.
OP, you've received great guidance in this thread. But much of it might be irrelevant for you, depending on your current situation. There's also plenty of great info on this site, starting with this post on the wiki. How old are you? What is your current financial/investing situation? Without more info on where your question's coming from, it's hard to know how we can help. You need to help us help you. And the forum rules require that your inquiry be specific to YOUR situation, not some generalized inquiry about "how to get rich".

FWIW, to the first sentence in your post, I am very successful financially and very disciplined. To your second sentence, perhaps the resources listed here might be helpful for you. Once you've perused those, please consider posting in the format suggested here. As to your third set of questions, I read LOTS of things. No outside classes/mentors, other than my parents (RIP) years ago who hard-wired certain values into me.
Bottom line: You are correct that many BHs are successful, and many more are on their way to being so by following the BH values. I wish all best to those who decide to go a different path. If you're looking for the simple, painless, "get rich quick" scheme, you've come to the wrong place. Getting to "very successful financially...and very disciplined" is simple. That doesn't mean it's easy.

Good on you for asking the question that will get you started, OP!
Wow, thank you for all of the responses. I have learned a lot from reading through over 100 responses.

My apologies for poorly naming this thread by using the word “rich”. Arguing about what “rich” actually means seems to be a hot topic too. Maybe that should be a thread of its own.

Person quoted here asked me to provide more background/information on financial situation.

I am 25. Married filing jointly. Zero debt. I am in a development program (which is also a full time job) designed to train me to become a franchisee of a very successful business. A hot topic in my social circle at work is “how are you developing yourself personally and professionally?”. For me, I read as much as possible, typically audiobooks. I read about leadership, business, investing, or anything that I believe I can learn from and apply to my career. I learned how to read and write in a second language and try to maintain that skill whenever possible. I am a member of Toastmasters International, which is a community group dedicated to helping members improve leadership and public speaking skills through a step by step program. Beyond that, I just try to read articles, blogs, etc on the internet to educate myself further on financial literacy. I was curious to hear about everyone’s habits that make them more successful. Thank you again for providing so much insight.

My financial situation is as follows:
Saving approximately $2,000 per month as of now
Maxing out my Roth IRA - Vanguard - VFIFX
Will max out my 401k match in 2019 as soon as I’m eligible.
Have about a years worth of EF in a savings account. (Reason for having such a large EF and savings is because I may be out of work for 6-9 months in 2021 and I am saving to buy a house and car. Right now driving a company vehicle but won’t always have one.)

I’m open to suggestions here, but feel pretty good about where I’m at for now after much research.

Starfish
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Re: [Financial] Habits of the Rich

Post by Starfish » Wed Nov 14, 2018 3:36 am

Some of the ideas here give me the impression that I landed on the "how to have a miserable life" "how to change extraordinary years of youth for a handful of dollars" and similar topics.
Balance is everything. Don't sacrifice your youth to "gain" couple of years when you are old. See the world. Have fun. Marry for love not "well" or "rich". Memories and experiences and friends are the real riches, not dollars and cents. Or at least not only. World it's full of depressed rich people.

SQRT
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Re: [Financial] Habits of the Rich

Post by SQRT » Wed Nov 14, 2018 9:05 am

Starfish wrote:
Wed Nov 14, 2018 3:36 am
Some of the ideas here give me the impression that I landed on the "how to have a miserable life" "how to change extraordinary years of youth for a handful of dollars" and similar topics.
Balance is everything. Don't sacrifice your youth to "gain" couple of years when you are old. See the world. Have fun. Marry for love not "well" or "rich". Memories and experiences and friends are the real riches, not dollars and cents. Or at least not only. World it's full of depressed rich people.
Agree to a large extent. But the world is full of depressed people,rich and poor. I’d rather be rich and depressed than poor and depressed, I think. I think happiness, or the lack of depression, is mostly independent of wealth level. Balance is certainly key.

Long lists of “secrets to ......... “ are never secrets and largely self evident to anyone with a bit of intelligent. There are many ways to achieve happiness. For some people some of these ways could include being successful financially. For others it doesn’t matter.

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HomerJ
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Re: [Financial] Habits of the Rich

Post by HomerJ » Wed Nov 14, 2018 11:40 am

Starfish wrote:
Wed Nov 14, 2018 3:36 am
Some of the ideas here give me the impression that I landed on the "how to have a miserable life" "how to change extraordinary years of youth for a handful of dollars" and similar topics.
Balance is everything. Don't sacrifice your youth to "gain" couple of years when you are old. See the world. Have fun. Marry for love not "well" or "rich". Memories and experiences and friends are the real riches, not dollars and cents. Or at least not only. World it's full of depressed rich people.
I have no idea how you equate "spend less than you earn" with "how to have a miserable life".
The J stands for Jay

integrity
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Re: Habits of the Rich

Post by integrity » Wed Nov 14, 2018 11:51 am

averagedude wrote:
Sun Nov 11, 2018 12:27 pm
The formula for wealth is money x time x rate of return
Actually its money x rate of return ^ time. And thank god for that!

Not trying to be snarky in my response, just highlighting that time is a proportionally more important factor, since it's an exponent.

shell921
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Re: [Financial] Habits of the Rich

Post by shell921 » Wed Nov 14, 2018 11:56 am

SQRT wrote:
Wed Nov 14, 2018 9:05 am
Starfish wrote:
Wed Nov 14, 2018 3:36 am
Some of the ideas here give me the impression that I landed on the "how to have a miserable life" "how to change extraordinary years of youth for a handful of dollars" and similar topics.
Balance is everything. Don't sacrifice your youth to "gain" couple of years when you are old. See the world. Have fun. Marry for love not "well" or "rich". Memories and experiences and friends are the real riches, not dollars and cents. Or at least not only. World it's full of depressed rich people.
Agree to a large extent. But the world is full of depressed people,rich and poor. I’d rather be rich and depressed than poor and depressed, I think. I think happiness, or the lack of depression, is mostly independent of wealth level. Balance is certainly key.

Long lists of “secrets to ......... “ are never secrets and largely self evident to anyone with a bit of intelligent. There are many ways to achieve happiness. For some people some of these ways could include being successful financially. For others it doesn’t matter.
Yes - I agree that I would rather be "rich" and depressed than "poor" and depressed.
If you have to be miserable it's best to be comfortably miserable i guess. LOL.

Having $$ means you can live a life of more options/choices and less justification.

Balance is KEY-YES!

SQRT
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Re: [Financial] Habits of the Rich

Post by SQRT » Wed Nov 14, 2018 12:28 pm

shell921 wrote:
Wed Nov 14, 2018 11:56 am

Yes - I agree that I would rather be "rich" and depressed than "poor" and depressed.
If you have to be miserable it's best to be comfortably miserable i guess. LOL.

Having $$ means you can live a life of more options/choices and less justification.

Balance is KEY-YES!
Right, agree. The whole discussion around the statement “Money doesn’t buy happiness” or “money won’t make you happy” is quite interesting. I wonder why we put such emphasis on the relationship of money and happiness. There are many other things that could also be compared to happiness such as intelligence, attractiveness, good health, empathy, but seldom are. Being smart won’t make you happy. Being attractive won’t make you happy. Being healthy won’t make you happy. Being kind or considerate won’t make you happy. Why don’t we hear these statements? Maybe these won’t make you happy, but would anyone really argue that they aren’t good things to be?

I’m no expert on happiness but I really doubt having money or being rich makes you unhappy either?

Having money might make you feel more accomplished, or more empowered, or more secure, or give you more choice, or allow for more generosity and the ability to help others? These things might make you happier? Not sure.

Maybe happiness is just too difficult to define and measure. Maybe it’s just too personal?

I apologize for the digression but these thoughts have been hanging around in my mind for a while.

bltn
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Re: [Financial] Habits of the Rich

Post by bltn » Wed Nov 14, 2018 1:28 pm

Starfish wrote:
Wed Nov 14, 2018 3:36 am
Some of the ideas here give me the impression that I landed on the "how to have a miserable life" "how to change extraordinary years of youth for a handful of dollars" and similar topics.
Balance is everything. Don't sacrifice your youth to "gain" couple of years when you are old. See the world. Have fun. Marry for love not "well" or "rich". Memories and experiences and friends are the real riches, not dollars and cents. Or at least not only. World it's full of depressed rich people.
A miserable life is determined by the mindset of the person involved. Depressed rich people are better off than depressed poor people.

I do agree that balance is good thing and gives one the opportunity to experience some of life s great moments that would not be possible if one waited until one attains a certain level of wealth at an advanced age. I am, by nature, very frugal and have a congenital (abnormal) lack of interest in material possessions. I was lucky enough to marry a very bright woman who is a careful spender if not a careful saver. She has provided the balance in our lives which has made my life much richer.
If we had waited until now to start traveling, we would never do it to the extent that we already have. We would never have the homes or cars that we have had, based on my frugality, if I hadn't t had her positive influence.

But without lbym and a strong emphasis on saving, we wouldn't t appreciate what I think is still possibly the most important thing in a working life, financial security.

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HomerJ
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Re: [Financial] Habits of the Rich

Post by HomerJ » Wed Nov 14, 2018 1:43 pm

"Money may not buy happiness, but I've never seen anyone look sad while riding a jetski!"
The J stands for Jay

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XtremeSki2001
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Re: [Financial] Habits of the Rich

Post by XtremeSki2001 » Wed Nov 14, 2018 2:17 pm

Someone said it earlier in this thread - "It's very simple, but hard." We're a fan of the Keep It Simple (KIS) principle.

We save ~25-30% in Vanguard funds, donate ~5-10% to church/charity, and spend what's left. We believe in being frugal, but splurge on things we value .. family vacations to Disney, large wooden playset, craft beer, beach house in the summer, single origin coffee, etc. YOLO.
A box of rain will ease the pain and love will see you through

Cruise
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Re: [Financial] Habits of the Rich

Post by Cruise » Wed Nov 14, 2018 2:22 pm

Regarding whether wealth and depression/happiness are related, here is an excerpt from a review article published in a prestigious journal entitled "The Funds, Friends, and Faith of Happy People:"

"However, in affluent countries, where most can afford
life's necessities, affluence matters surprisingly little. In the
United States, Canada, and Europe, the correlation between
income and personal happiness, noted Ronald Inglehart
(1990), "is surprisingly weak (indeed, virtually negligible)"
(p. 242). Happiness tends to be lower among the very poor.
Once comfortable, however, more money provides diminishing
returns on happiness. Summarizing his own studies
of happiness, David Lykken (1999) observed that "People
who go to work in their overalls and on the bus are just as
happy, on the average, as those in suits who drive to work
in their own Mercedes" (p. 17).

Even very rich people--the Forbes 100 wealthiest
Americans surveyed by Diener, Horwitz, and Emmons
(1985)--are only slightly happier than the average American.
Although they have more than enough money to buy
many things they don't need and hardly care about, 4 in 5
of the 49 super-rich people responding to the survey agreed
that "Money can increase OR decrease happiness, depending
on how it is used." Some were indeed unhappy."

Source: http://www.davidmyers.org/davidmyers/as ... .faith.pdf

Starfish
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Re: [Financial] Habits of the Rich

Post by Starfish » Wed Nov 14, 2018 2:27 pm

I am not sure is better to be depressed and rich. But the discussion is pointless. The purpose of life should be maximizing happiness not maximizing money. If you end up unhappy, money are irrelevant. Even if you end up with a less happy total life than you could have been, it might be a loss.
Of course money do bring happiness (at east for me, because they buy time and stability), but at a certain point it's a trade off.

I also don't get this "naturally frugal" notion. I am naturally frugal too, meaning that on day to day basis I don't spend that much and I try to minimize unimportant expenses (unimportant = low return/$ in happiness or utility). But I do have a long list of things I would like to do/experience/buy if I had 5 or 10 million more. Does naturally frugal mean that one has no desires? That sucks.

Starfish
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Re: [Financial] Habits of the Rich

Post by Starfish » Wed Nov 14, 2018 2:30 pm

HomerJ wrote:
Wed Nov 14, 2018 1:43 pm
"Money may not buy happiness, but I've never seen anyone look sad while riding a jetski!"

It depends what you sacrificed for that.
Because most of us have this issue: have to exchange time for money.
For example is it really worth saving (small amounts of) money when you are 25 instead of maximizing the use of wonder years?

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CyclingDuo
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Re: [Financial] Habits of the Rich

Post by CyclingDuo » Wed Nov 14, 2018 2:53 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.
As long as the word "Rich" was mentioned, I think one of the interesting things about wealth on our planet points out what it means to be a citizen in the US when it comes to income and net worth. I can't remember the number or where I saw it, but I think it was something like a net worth of only $71K to $97K puts a person in the top 10% in the world. Doesn't sound like much in terms of net worth, but compared to the 90% in the world who do not have that much, it is - insert your favorite word here: ________________________ (sobering, humbling, eye-opening, etc...) .

The Spectrem Group released a report based on the 2017 data for the US. Here are a few highlights....

•In 2017, there were 31 million Mass Affluent households with a net worth between $100,000 and $1 million, NIPR. That is an increase of half a million households from 2016.

• The number of Millionaires, those with a net worth between $1 million and $5 million, climbed to 9.98 million, an increase of almost 600,000 compared with 2016.

• The Ultra High Net Worth market, in which net worth is between $5 million and $25 million, grew to 1,348,000 households, an increase of 84,000 from 2016.

• There are now 172,000 households with a net worth exceeding $25 million. That reflects an increase of 16,000 households from the 2016 total, an increase of more than 10 percent from the 2016 total of 156,000.

https://www.einnews.com/pr_news/4380585 ... th-in-2017

This link shows net worth percentiles in the US for set period in time:

https://dqydj.com/net-worth-brackets-we ... e-percent/

You can plug in your net worth at this calculator to see what percentile you are in with regard to other Americans:

https://dqydj.com/net-worth-percentile- ... ed-states/
"Everywhere is within walking distance if you have the time." ~ Steven Wright

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monkey_business
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Re: [Financial] Habits of the Rich

Post by monkey_business » Wed Nov 14, 2018 2:57 pm

VictoriaF wrote:
Mon Nov 12, 2018 6:48 pm
Poor people treasure their things.
Rich people treasure their time.

This thread is about rich people.

Victoria
Of course rich people treasure their time - they already have all the things they want! :greedy

Starfish
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Re: [Financial] Habits of the Rich

Post by Starfish » Wed Nov 14, 2018 3:03 pm

CyclingDuo wrote:
Wed Nov 14, 2018 2:53 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.
As long as the word "Rich" was mentioned, I think one of the interesting things about wealth on our planet points out what it means to be a citizen in the US when it comes to income and net worth. I can't remember the number or where I saw it, but I think it was something like a net worth of only $71K to $97K puts a person in the top 10% in the world. Doesn't sound like much in terms of net worth, but compared to the 90% in the world who do not have that much, it is - insert your favorite word here: ________________________ (sobering, humbling, eye-opening, etc...) .

The Spectrem Group released a report based on the 2017 data for the US. Here are a few highlights....

•In 2017, there were 31 million Mass Affluent households with a net worth between $100,000 and $1 million, NIPR. That is an increase of half a million households from 2016.

• The number of Millionaires, those with a net worth between $1 million and $5 million, climbed to 9.98 million, an increase of almost 600,000 compared with 2016.

• The Ultra High Net Worth market, in which net worth is between $5 million and $25 million, grew to 1,348,000 households, an increase of 84,000 from 2016.

• There are now 172,000 households with a net worth exceeding $25 million. That reflects an increase of 16,000 households from the 2016 total, an increase of more than 10 percent from the 2016 total of 156,000.

https://www.einnews.com/pr_news/4380585 ... th-in-2017

This link shows net worth percentiles in the US for set period in time:

https://dqydj.com/net-worth-brackets-we ... e-percent/

You can plug in your net worth at this calculator to see what percentile you are in with regard to other Americans:

https://dqydj.com/net-worth-percentile- ... ed-states/
You have to be careful with interpreting the statistic, as 100k$ in USA might be a lot less than 20k$ in other countries in many respects.
For example for 1 million $ o 100k$ you can get a similar house with basic infrastructure in 2 different places on the planet. 10k$ might buy very different amounts of healthcare or education. So on.
For example in some countries home ownership is 90%+ but the NW is low because a house costs n average 50-100k$.

fastrak99
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Re: [Financial] Habits of the Rich

Post by fastrak99 » Wed Nov 14, 2018 3:19 pm

I’ve never actively thought until recently (last 5 years) about being ‘successful’ or ‘rich/wealthy’ habits, or what it takes to get there. Many habits and though process that takes to get there, I adopted at an early age (circumstance / biology / 5 closest who you are surrounded with), and have kept with it ever since.

On the financial side - growing up in a low-middle class immigrant family – my mentality was (starting at a very early age) – that you do whatever you have to do to bring an extra dollar to the family.

I have had an entrepreneurial mind since 13/14 years old (back when ebay launched) – and have been fascinated that literally ‘everything’ would sell on that site. I made a small fortune on baseball cards at that time, followed by reselling video games, and various trinkets I would find around discount stores.

I learned early on, that its very hard to save your way to ‘millions’, and enjoy them young. I figured if I can find a way to replace my 50K corporate engineering salary by making 50K on my own – that would be a great start. Within 1-2 years I was able to achieve that (through a bit of trial and error with various e-commerce ideas), and actually doubled that within a relatively short time.

Now – a decade later, I’m numerous times my engineering salary. That has allowed me to not only spend lavishly, but save and invest for decades to come. So in a way, my mentality and habits that I started developing young around money (entrepreneurship, eCommerce and power of internet, starting small, scaling, manufacturing own product, make enough to replace salary) – all led to a ‘successful’ financial position.

It is also extremely important to marry well and find the right spouse. My wife is very supportive of me, shares many of my values and encourages my passions. At the time we met – I did not know what I was looking for in a spouse (by being stubborn, young and stupid) – and now that my vision and thoughts are more clear, I would say being like-minded and supportive of each other helped a lot in keeping us in a very happy, committed relationship. I invest heavily into my marriage (travel, date nights, constant communication, being there) - and that pays of in dividends greatly. I also actively strive to keep up my social relationships and friendships – and many times have gone far out of my way to do that.

As part of also achieving and working toward financial success - I definitely encourage every person looking for that to put in their share of exercise. If you don’t have your health – not many other things in life matter. Make the time where you can, and find something you enjoy doing. Either set goals and/or develop great habits around it. If you let this area slide – all other areas of your life will suffer and slide massively.

Other great habits? Eat well, Travel, get plenty of sleep, stay consistent with reading and learning, keep household clean and uncluttered. Don't over-leverage on school debt (will burden you for decades).

And as a last note - much of success comes not from what you do but from what you don't do. I try and limit my 'binges' in fields associated with such (netflix, eating, drinking, going out, entertainment of any sort, etc).
Last edited by fastrak99 on Wed Nov 14, 2018 3:36 pm, edited 1 time in total.

Sandi_k
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Re: [Financial] Habits of the Rich

Post by Sandi_k » Wed Nov 14, 2018 3:35 pm

HomerJ wrote:
Wed Nov 14, 2018 1:43 pm
"Money may not buy happiness, but I've never seen anyone look sad while riding a jetski!"
As the owner of one, I can confirm that this is true.

:D :D

SQRT
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Re: [Financial] Habits of the Rich

Post by SQRT » Wed Nov 14, 2018 4:35 pm

Sandi_k wrote:
Wed Nov 14, 2018 3:35 pm
HomerJ wrote:
Wed Nov 14, 2018 1:43 pm
"Money may not buy happiness, but I've never seen anyone look sad while riding a jetski!"
As the owner of one, I can confirm that this is true.

:D :D
Agree. Got a couple this past summer and had a blast.

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CyclingDuo
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Re: [Financial] Habits of the Rich

Post by CyclingDuo » Wed Nov 14, 2018 5:32 pm

Starfish wrote:
Wed Nov 14, 2018 3:03 pm
You have to be careful with interpreting the statistic, as 100k$ in USA might be a lot less than 20k$ in other countries in many respects.
For example for 1 million $ o 100k$ you can get a similar house with basic infrastructure in 2 different places on the planet. 10k$ might buy very different amounts of healthcare or education. So on.
For example in some countries home ownership is 90%+ but the NW is low because a house costs n average 50-100k$.
Agree that comparisons when you include cost of living, housing prices, currency exchange, taxes, pension, entitlement programs, etc... can be skewed to not show the full picture based on net worth alone.

You can plug in your personal scenario here to see how one fits in - either based on income, or net worth...

http://www.globalrichlist.com/

Regardless, the discussion throughout this thread in terms of defining "rich" was interesting from a more global perspective in our opinion after having lived and worked abroad in other cultures.

You might be among the richest people in the world and not realize it

https://www.chicagotribune.com/business ... story.html

The OP wrote...

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.


We would agree with many recommendations already provided to the OP in the answers on habits that have the potential to lead to a nice nest egg. In our case, keeping the big three in check - housing, transportation, food - has always freed up our ability to save. Our PITI has averaged around 10% - 14% of gross income most of our married lives which always freed up money for other savings and discretionary purchases. We have only purchased vehicles with cash that we could afford at the time and no debt outside of a mortgage. We love to cook, so dining at home is a routine in our lives. We love to exercise, so a home gym occupies our basement and we ride bikes outside as part of our regular routine to keep fit. Toss into the mix that we married after we both had individual incomes and zero student loan debt, delayed having children until we had been working a decade in our careers, and had a bit of luck along the way in terms of the timing of a home purchase/sale as well as the purchase/sale of some land to cover up for mistakes along the way.

That being said, and above all, family means the most to us.
:sharebeer
"Everywhere is within walking distance if you have the time." ~ Steven Wright

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Phineas J. Whoopee
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Re: [Financial] Habits of the Rich

Post by Phineas J. Whoopee » Wed Nov 14, 2018 5:55 pm

HomerJ wrote:
Tue Nov 13, 2018 6:27 pm
Phineas J. Whoopee wrote:
Tue Nov 13, 2018 5:06 pm
HomerJ wrote:
Tue Nov 13, 2018 4:59 pm
...
When you get a big promotion or move to a new company, maybe you'll get a raise to $48,000. Save $4000 more a year, and spend $4000 more a year.
...
Such an event may never occur, and at no fault of the employee.

PJW
In general, staying in the same dead-end job where you never get raises is definitely the "fault of the employee".
...
You assume an abundance of opportunity.

PJW

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munemaker
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Re: [Financial] Habits of the Rich

Post by munemaker » Wed Nov 14, 2018 6:04 pm

moghopper wrote:
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)
I guess YMMV, but in my case, I feel much more secure holding significant financial assets than I did when I was younger and did not.

MnD
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Re: [Financial] Habits of the Rich

Post by MnD » Wed Nov 14, 2018 10:08 pm

One spouse, one house, one sled.
(Married 1985, house purchased 1991 and my lifetime wheels were/are 1977/1989/2005 pickups.)

fennewaldaj
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Re: [Financial] Habits of the Rich

Post by fennewaldaj » Thu Nov 15, 2018 2:23 am

AlphaLess wrote:
Mon Nov 12, 2018 9:19 pm
I would have to debate calling most people here rich.

To me, rich is at the level when you are well past the FIRE stage (Financial Independence, Early Retirement).

Of course, you can eventually become rich, but most people here would not qualify.

I would say that you are rich if your assets are producing SIGNIFICANTLY more income per year than your spending needs are.

And significant does not mean 30%, bur rather, multiples, like 5 or 10x.

Now, of course, you don't want to live in the poor-house and push your 'required spend' down so much so as to qualify.

Thus, I should add one more condition: your spending is in the top 1% of your area.

So, say, you live in a high COLA region where top 1% income is 200K. And your assets are allowing for a withdrawal rate that is 3-5x income relative to 200K, or, say 800K.

At 3.1% WR, that's $26MM. That's the very BOTTOM rang of rich.
I get that is one way to define it. Its not really very useful though as you really only reach that level by being lucky. By lucky I mean being passionately into something that pays super well and saving some of your money. This is not something most people can will themselves to do. Analyzing the habits of lucky people just is not that useful. Analyzing the habits of quasi normal people who are able to accumulate a decent amount of assets is useful.

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Re: [Financial] Habits of the Rich

Post by fennewaldaj » Thu Nov 15, 2018 2:47 am

Starfish wrote:
Wed Nov 14, 2018 2:30 pm
HomerJ wrote:
Wed Nov 14, 2018 1:43 pm
"Money may not buy happiness, but I've never seen anyone look sad while riding a jetski!"

It depends what you sacrificed for that.
Because most of us have this issue: have to exchange time for money.
For example is it really worth saving (small amounts of) money when you are 25 instead of maximizing the use of wonder years?
I am not that old yet (37) but I have found the 30s to be just as good as the 20s. I think a person can be roughly equally happy through the different decades. I am mindful of making sure my wife and I are able to get certain experiences that interest us at a young enough age to enjoy them. That is actually part of why we are relatively frugal now. We would like to do some travel that is impractical to do while working while youngish so we are targeting a retirement in early to mid 50s. That said its not like we ignore our current wants and needs.

SQRT
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Re: [Financial] Habits of the Rich

Post by SQRT » Thu Nov 15, 2018 6:23 am

fennewaldaj wrote:
Thu Nov 15, 2018 2:23 am
Analyzing the habits of lucky people just is not that useful.
Good point. I believe my success is to a great extent because of good luck (humble approach). Having said that, I think I did a lot of things right (many others wrong). There are things that tend to increase your likelihood of being lucky and thus successful. Not a guarantee of course.

tmcc
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Re: [Financial] Habits of the Rich

Post by tmcc » Thu Nov 15, 2018 7:12 am

moghopper wrote:
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)
So are the dancing flies the bogleheads? :D

pennywise
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Re: [Financial] Habits of the Rich

Post by pennywise » Thu Nov 15, 2018 7:37 am

Starfish wrote:
Wed Nov 14, 2018 3:36 am
Some of the ideas here give me the impression that I landed on the "how to have a miserable life" "how to change extraordinary years of youth for a handful of dollars" and similar topics.
Balance is everything. Don't sacrifice your youth to "gain" couple of years when you are old. See the world. Have fun. Marry for love not "well" or "rich". Memories and experiences and friends are the real riches, not dollars and cents. Or at least not only. World it's full of depressed rich people.
I think the gist of what people are trying to convey is in response to what was asked-what are HABITS of people who are financially successful. Habits are usually patterns of behavior that evolve into becoming time/life/attention hacks. A habit provides some kind of reward--sometimes the reward can lead to negative outcomes so if you have a habit of buying drinks for the house every payday that gives you the reward of being the most popular guy at the bar, but eventually the reward will cost you dearly.

OTOH, if you develop the habit of putting the money you would have used to buy drinks into the bank or better into an index fund every payday, the reward may not be immediate but in the end it sure will be more positive than what you got for your habit of being Happy Hour Harry every Friday.

So habits, which become automatic or engrained, might as well be good as bad, right? Doesn't mean you can't travel or live it up, just don't make it a habit :)

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Re: [Financial] Habits of the Rich

Post by Dandy » Thu Nov 15, 2018 8:00 am

First, one of the key factors not often mentioned is luck. Luck in employment, who you marry, the health of your family, luck with your investments, etc. That being said there are things that you have some real control over. How you spend, save and invest.

Living below your means can be difficult for some people but as someone told me there are people living in your area making less than you and they get by. Now that doesn't mean eating beans and rice at every meal. As one co worker advised me when I started out "each time you get more income increase your savings a bit you won't miss it". Yes you also have to curb your buying instincts -- there are many ways to live it up --credit is easy and you can usually buy more than you can really afford (or need).

Life balance is important. You don't want to become a penny pinching hoarder either. You and your loved ones need to enjoy life not just get by. So, find ways to do that while still living below your means. For us it was having a nice family vacation once a year. Gifts tended to be things needed vs a lot of bling -- but some bling. I enjoyed golfing but it was expensive and time consuming. So, I did it on occasion as a treat rather than making it a weekly habit. I never did it on vacation - that was family time.

Save and invest and avoid most debt. Automate savings/investing as much as possible Don't take excessive risks. I never had an equity allocation greater than 55%. Never gambled. Always got the company match to my 401k and increased the contribution percentage often. When I got a bonus I saved some of that for retirement. I always had a decent access to cash or cash-like assets so any expense "emergency" didn't require debt. Always paid off credit cards without incurring interest charges. Had a broker for about 4 years and bought 4 or 5 stocks. That wasn't a bad experience but decided the Boglehead way was my investing path.

Do your own maintenance vs hiring others when possible. I used to change my oil, rotate the tires, paint, landscape, shovel, rake, clean gutters, etc. I continued to do most of that as my finances grew. Also, did our own taxes even with pencil and paper before Turbo Tax. Know when to use outside talent e.g. lawyer, electrician, doctor.

All this plus luck has worked so far.

AlphaLess
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Re: [Financial] Habits of the Rich

Post by AlphaLess » Thu Nov 15, 2018 9:07 am

fennewaldaj wrote:
Thu Nov 15, 2018 2:23 am
AlphaLess wrote:
Mon Nov 12, 2018 9:19 pm
I would have to debate calling most people here rich.

To me, rich is at the level when you are well past the FIRE stage (Financial Independence, Early Retirement).

Of course, you can eventually become rich, but most people here would not qualify.

I would say that you are rich if your assets are producing SIGNIFICANTLY more income per year than your spending needs are.

And significant does not mean 30%, bur rather, multiples, like 5 or 10x.

Now, of course, you don't want to live in the poor-house and push your 'required spend' down so much so as to qualify.

Thus, I should add one more condition: your spending is in the top 1% of your area.

So, say, you live in a high COLA region where top 1% income is 200K. And your assets are allowing for a withdrawal rate that is 3-5x income relative to 200K, or, say 800K.

At 3.1% WR, that's $26MM. That's the very BOTTOM rang of rich.
I get that is one way to define it. Its not really very useful though as you really only reach that level by being lucky. By lucky I mean being passionately into something that pays super well and saving some of your money. This is not something most people can will themselves to do. Analyzing the habits of lucky people just is not that useful. Analyzing the habits of quasi normal people who are able to accumulate a decent amount of assets is useful.
I was merely pointing out the futility of the exercise.

But I agree with you: we should not be analyzing the habits of the rich. Rather, we should be analyzing the habits of the diligent hustlers who are also frugal (aka bogleheads).
"You can get more with a kind word and a gun than with just a kind word." George Washington

LesBleus**
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Re: Habits of the Rich

Post by LesBleus** » Thu Nov 15, 2018 2:00 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
Can someone give life examples for # 1. I'm in the process of planning my move back to California from Texas and it's a daunting task. I would love to learn what others accomplished and their success stories.

Wricha
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Re: [Financial] Habits of the Rich

Post by Wricha » Thu Nov 15, 2018 4:52 pm

I think OP asked about the habits of the rich not the well off. Even Jack Bogle did not became rich by using Boglehead habits he became rich because he was a risk taker, did not accept no, hard worker, unique idea and built a business those are the habits of the rich. Boglehead philosophy is terrific for those who wanna become a millionaire next-door type. It is well worn path to financial independence not the pathway to becoming rich. Once rich, the Boglehead way an is effective way of maintaining ones position.

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Re: [Financial] Habits of the Rich

Post by Starfish » Thu Nov 15, 2018 5:23 pm

fennewaldaj wrote:
Thu Nov 15, 2018 2:47 am
Starfish wrote:
Wed Nov 14, 2018 2:30 pm
HomerJ wrote:
Wed Nov 14, 2018 1:43 pm
"Money may not buy happiness, but I've never seen anyone look sad while riding a jetski!"

It depends what you sacrificed for that.
Because most of us have this issue: have to exchange time for money.
For example is it really worth saving (small amounts of) money when you are 25 instead of maximizing the use of wonder years?
I am not that old yet (37) but I have found the 30s to be just as good as the 20s.
It wasn't the same for me and anybody I know, and not because 30s are bad, just because there is a clear objective difference between these decades.
In my 20s I spent my life surrounded by friends, traveling, partying, climbing mountains etc. I spend most of that decade in school (not only for free, but I was always paid for going to school, even have resort stays paid for).
I started my first real long term job at 30. Then is all a blur. First 5 years or so were 15 days of vacation, sometimes 14h and half of the weekends working. It was good in a way because I learned a lot in that period, but in terms of spare time for living my life it was terrible. Than it got easier but we had a baby. Also a completely new adventure, but hard to combine with other goals.
Now in my 40s I have a kid to worry about, my own (hopefully early) retirement, and the realization that I am mortal and there is not that much time left. A decade, maybe 2?
So it's pretty different. Did I enjoy it the same? Not really, nobody likes working 60-80h/week for several years even if they like the job. I am happy that period passed. Physically I am also not as powerful, resilient, smart, sharp I I used to be. Mentally, not as enthusiastic, not as curios and ecstatic.

lws
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Re: [Financial] Habits of the Rich

Post by lws » Thu Nov 15, 2018 5:56 pm

Briefly:
get into profession that is in demand
learn about money & investing
save like crazy
spend wisely
avoid lending money
do not accumulate material junk
have clear definitions of wealth and of money
know that poverty loves company

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munemaker
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Re: [Financial] Habits of the Rich

Post by munemaker » Thu Nov 15, 2018 7:03 pm

visualguy wrote:
Tue Nov 13, 2018 4:26 pm
If you can easily afford fancy cars, nice houses, a yacht, a personal cook, first-class travel, country club memberships, etc. then you are rich by my definition .
Yet in a 2015 survey conducted by CNBC, 84% of millionaires described themselves as middle class or upper-middle class, while only 9% said they were upper-class or rich. According to wealth experts, the most likely reason for this is that these millionaires aren’t comparing themselves to the rest of the country or the rest of the world – they’re only looking at their own social group. Even among Americans with a net worth of $5 million or more – which puts them in the top 0.8% in the United States, and the top 0.06% in the world – only 11% describe themselves as wealthy.

Since millionaires and even multi-millionaires apparently don’t consider themselves rich, you might well ask how much they think it actually takes to be rich. According to the Wall Street Journal’s Wealth Report blog, the most common answer in surveys appears to be twice as much money as they currently have – no matter that that figure is. Those making $100,000 a year think it takes at least $200,000 a year to be rich; those with a net worth of $3 million think it takes $6 million.
reference: https://www.moneycrashers.com/rich-defi ... lifestyle/

visualguy
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Re: [Financial] Habits of the Rich

Post by visualguy » Thu Nov 15, 2018 7:35 pm

munemaker wrote:
Thu Nov 15, 2018 7:03 pm
visualguy wrote:
Tue Nov 13, 2018 4:26 pm
If you can easily afford fancy cars, nice houses, a yacht, a personal cook, first-class travel, country club memberships, etc. then you are rich by my definition .
Yet in a 2015 survey conducted by CNBC, 84% of millionaires described themselves as middle class or upper-middle class, while only 9% said they were upper-class or rich. According to wealth experts, the most likely reason for this is that these millionaires aren’t comparing themselves to the rest of the country or the rest of the world – they’re only looking at their own social group. Even among Americans with a net worth of $5 million or more – which puts them in the top 0.8% in the United States, and the top 0.06% in the world – only 11% describe themselves as wealthy.

Since millionaires and even multi-millionaires apparently don’t consider themselves rich, you might well ask how much they think it actually takes to be rich. According to the Wall Street Journal’s Wealth Report blog, the most common answer in surveys appears to be twice as much money as they currently have – no matter that that figure is. Those making $100,000 a year think it takes at least $200,000 a year to be rich; those with a net worth of $3 million think it takes $6 million.
reference: https://www.moneycrashers.com/rich-defi ... lifestyle/
For me, it's an absolute thing, not a relative thing. If you can't afford the lifestyle of the rich, you are not rich. You don't have to live it, but you need to be able to afford it. This lifestyle includes the stuff that I mentioned - fancy cars, luxury home, vacation home, first-class travel, country club memberships, boat, top private schools for the kids, a top CCRC for retirement/nursing home (or excellent staff for live-in home care), etc. Otherwise, you are just talking about financially-secure, not rich. Someone who can retire early to live only a middle class or upper middle class lifestyle, for example, isn't rich, even if they are better off than most people - that doesn't matter. Being rich is at a different level - the level of being able to afford a truly luxurious (upper class) lifestyle without running out of money.

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Re: [Financial] Habits of the Rich

Post by sschullo » Thu Nov 15, 2018 8:46 pm

monkey_business wrote:
Wed Nov 14, 2018 2:57 pm
VictoriaF wrote:
Mon Nov 12, 2018 6:48 pm
Poor people treasure their things.
Rich people treasure their time.

This thread is about rich people.

Victoria
Of course rich people treasure their time - they already have all the things they want! :greedy
Assuming poor people have things....
Public School K-12 Educators: "Ask NOT what your annuity sales person can do for you, ask what you can do to be a Do-It-Yourselfer (DIY)."

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mattyfu1
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Re: [Financial] Habits of the Rich

Post by mattyfu1 » Thu Nov 15, 2018 8:54 pm

I love having no car payments

I am 36 and live on Long Island. Many of my friends bought expensive SUV's when the kids started being born. I bought my Dad's Kia and a minivan (30k cheaper than most huge SUVs). Both are paid off and each has under 50k miles.

I also enjoy not having cable.

All in all I feel it increases my cashflow by $1000 a month.

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billyo44
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Re: [Financial] Habits of the Rich

Post by billyo44 » Thu Nov 15, 2018 10:15 pm

“Marry the right person. This one decision will determine 90% of your happiness or misery.”

― H. Jackson Brown Jr. :thumbsup
Independence = Financial assets working for you versus you working for them.

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Re: [Financial] Habits of the Rich

Post by bltn » Fri Nov 16, 2018 4:31 am

Starfish wrote:
Wed Nov 14, 2018 2:30 pm
HomerJ wrote:
Wed Nov 14, 2018 1:43 pm
"Money may not buy happiness, but I've never seen anyone look sad while riding a jetski!"

It depends what you sacrificed for that.
Because most of us have this issue: have to exchange time for money.
For example is it really worth saving (small amounts of) money when you are 25 instead of maximizing the use of wonder years?
Without trading free time for financial success, most will never reach prosperity. Not unless they are very talented and/or extraordinarily lucky . Think lottery. Hard work, that requires a contribution of time , is a necessary ingredient for success in any endeavor, including wealth accumulation. Admittedly happiness and wealth are not the same thing. But for most on this forum there is a positive correlation between the two.
Wealth helps many enjoy their free time. Time consuming hard work makes some appreciate their free time even more. This from a person who thinks very little about being personally happy, but when asked, assumes he is!!
Oh well. Back to work.

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Re: [Financial] Habits of the Rich

Post by bltn » Fri Nov 16, 2018 5:00 am

Starfish wrote:
Wed Nov 14, 2018 2:30 pm
HomerJ wrote:
Wed Nov 14, 2018 1:43 pm
"Money may not buy happiness, but I've never seen anyone look sad while riding a jetski!"

It depends what you sacrificed for that.
Because most of us have this issue: have to exchange time for money.
For example is it really worth saving (small amounts of) money when you are 25 instead of maximizing the use of wonder years?
On my thirtieth birthday, I thought to myself, “that was the best decade of my life? Will I continue to have that much energy?”
I had spent the first half of that decade learning and training for my life s work, and the last half working eighty to one hundred hours a week. My free time was mostly eating and sleeping. Shortly after this period I became vocationally secure and ten or twelve years later I became financially secure. With sixty hour work weeks after that thirtieth birthday, I still managed to sqeeze in travel and quality time with my family.
I might have enjoyed more free time, but I certainly enjoyed the free time I had. And the long hours spent working certainly contributed to my feelings of accomplishment with my life s work. That is a source of happiness now.
I don t fault people in their 20 s for thinking that more free time is a good trade off for a certain level of financial success. I just was not gifted enough to make that path work for me.

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Re: [Financial] Habits of the Rich

Post by SGM » Fri Nov 16, 2018 10:44 am

I am comfortable. My definition of rich is being able to own a string of polo ponies and spending the winter in Argentina playing polo. :wink:

I have never spent to impress anyone. Early on I was lucky in the real estate market and in a few investments. It was important to me to stay out of debt as I had seen it affect others adversely. Others were quite lazy and either gambled or took drugs or were dependent on alcohol. I do compare myself with others in my cohort. I don't envy anyone who did better financially than I did. I am happy for them. The most successful have been in finance. One is a professor and Dean at a top notch university and sits on the boards of corporations and charities and can give away her professor's salary for graduate student scholarships. The other has a private jet and did arbitrage with other people's money.

What is more important to me is happiness, friendship and family. I don't give a fig about meeting anyone's definition of rich. I am very thankful for what I have.

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gasdoc
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Re: [Financial] Habits of the Rich

Post by gasdoc » Fri Nov 16, 2018 11:50 am

"Stay the course," both in career and finances.

gasdoc

obgraham
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Re: [Financial] Habits of the Rich

Post by obgraham » Fri Nov 16, 2018 1:42 pm

Since I hung out with a lot of doctors, I saw what it took to be financially stable, and it seemed very simple:

1.Stay married to the same person
2.Avoid building that big "doctor house"
3.Buy no more than one "stupid" car during your time.

Amazed how many were unable to be successful financially and wound up having to work into old age.

averagedude
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Re: [Financial] Habits of the Rich

Post by averagedude » Fri Nov 16, 2018 2:05 pm

obgraham wrote:
Fri Nov 16, 2018 1:42 pm
Since I hung out with a lot of doctors, I saw what it took to be financially stable, and it seemed very simple:

1.Stay married to the same person
2.Avoid building that big "doctor house"
3.Buy no more than one "stupid" car during your time.

Amazed how many were unable to be successful financially and wound up having to work into old age.
On being sucessful, this reminds me what Warren Buffett said. "You only have to do very few things right in life so long as you don't do too many things wrong".

raymclean
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Re: Habits of the Rich

Post by raymclean » Fri Nov 16, 2018 2:39 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
This is one very savvy, intelligent "average" dude!

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Re: [Financial] Habits of the Rich

Post by Cycle » Fri Nov 16, 2018 3:37 pm

Wricha wrote:
Tue Nov 13, 2018 8:46 pm
Rich is a tough term to define. My definition would be $10M for every $100k you need to cover expenses. For example if your lifestyle required ($200k minimum) to cover living expenses you would need to have $20M to be considered rich (my definition). Why? I just made it up. But if you think about it with that kind of buffer (1% withdrawal rate) you would have 3 or 4 times your living expenses being generated every year to cover the fun things! So for the person that needs $200k for living expenses, they would generated at least additional $600k on their $20M for the extras. $20M is not going to be made by being frugal, investing in index funds, 60/40 allocation, rebalancing, other Boglehead rules of thumb, on a $200k/yr salary. Rich is not in the cards for this person. Well off yes. With that said:

Habits/skills
1. Take risks (willing to risk it all)
2. Real estate (leverage)
3. Business owner (few employed folks are rich many are well off)
4. Think big and set no limits
5. Parlay any truly unique skills (athletes, actor, new ideas)
6. Build scale quickly
7. Passionate about being rich
8. Marry well (no divorce) or marry rich (shortcut)
9. Be comfortable with leveraging
10. Be extremely confident
11. Be disagreeable, be willing not to be liked
If my wife and I retire at 55 and never make more than 150k/yr ea, assuming 6% real return we'll hit 20MM in todays dollars at age 70.

We just need to show up at innitech and punch the clock for 40hrs a week for another 20 years. That's simply compounding interest... No special habits beyond frugality and the requisite to show up to work.

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flossy21
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Re: [Financial] Habits of the Rich

Post by flossy21 » Fri Nov 16, 2018 3:55 pm

There is a lot of of great advice in this thread. I would add this...

Become knowledgeable about things like plumbing, carpentry, electrical, automotive, etc. I'm not saying you have to be an expert and I'm not saying you have to do the work yourself but you need to know enough not to get fleeced by contractors and other service providers.

Ex - If you are paying a plumber $200/hr to diagnose and fix a leaky toilet flap it is going to be tough to accumulate wealth in the long term.

"Rich" people educate themselves so that they can avoid overpaying for things.

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