The author of Rich Habits, Thomas Corley explains that there are certain habits that are responsible for the accumulation of wealth over one’s lifetime.
ONE RICH HABIT IS SPENDING LESS THAN YOU EARN AND LIVE BELOW YOUR MEANS.
When you woke up in a beautiful house, being your own boss, and being able to control your financial muscles. It is a dream of most people today.
However, successful, wealthy people – be they property investors, business people or entrepreneurs – don’t just suddenly become rich and successful.
"Success is a process that takes place over many years."
The first thing to do when you have the financial flow is saving, then you invest and over the years grow your asset base, then you move to the cash flow stage and live off your asset base on your properties.
1.You complain instead of committing.
“Life is too expensive” ; “It’s hopeless; I’ll never get out of debt” ; “I don’t earn enough money.” Have you ever uttered any of these statements before, or perhaps all of them? Old habits die hard; however, as long as you do nothing to change; then you and your coming generation have a direct ticket to the land of poverty.
Stop complaining and making lame excuses. Instead, take responsibility for your non-productive habits and focus on changing them – then do it!
“Life is too expensive” ; “It’s hopeless; I’ll never get out of debt” ; “I don’t earn enough money.” Have you ever uttered any of these statements before, or perhaps all of them? Old habits die hard; however, as long as you do nothing to change; then you and your coming generation have a direct ticket to the land of poverty.
Stop complaining and making lame excuses. Instead, take responsibility for your non-productive habits and focus on changing them – then do it!
2.You just don’t get it!
The problem is that you keep learning but you don’t get it. You’re educated but you’ve never internalized what your teachers told you. You have knowledge but you don’t want to think too hard how to use it.
You’re still stuck at the starting line all along because you don’t want to start small and grow bit by bit from there. You’re still stuck in the lottery mentality hoping that one day you’ll wake up and voila! discover
“the newest, incredibly easiest way to get wealth.”
The problem is that you keep learning but you don’t get it. You’re educated but you’ve never internalized what your teachers told you. You have knowledge but you don’t want to think too hard how to use it.
You’re still stuck at the starting line all along because you don’t want to start small and grow bit by bit from there. You’re still stuck in the lottery mentality hoping that one day you’ll wake up and voila! discover
“the newest, incredibly easiest way to get wealth.”
3.When you earn more you spend more.
Consistently raising your expenditure is a good way to accumulate debt and to remain stuck in the echelons of poverty. To stay out of bad debt, you will either need to find a way to earn more or spend less. The first and best option is to find ways to earn more and keep your expenditure constant.
Consistently raising your expenditure is a good way to accumulate debt and to remain stuck in the echelons of poverty. To stay out of bad debt, you will either need to find a way to earn more or spend less. The first and best option is to find ways to earn more and keep your expenditure constant.
As you know this can only be done by creating multiple streams of income and lot’s of thinking is necessary in that case.
The second option is to simply cut on unnecessary expenses. The money that is saved from these budget cuts could be used for embarking on future investment programs.
The second option is to simply cut on unnecessary expenses. The money that is saved from these budget cuts could be used for embarking on future investment programs.
4.You focus on linear income instead of passive income.
Most people focus on linear income in the name of salary, allowances and one-off payments. Wise men on the other hand focus on passive income in the name of royalties, interest rates, value addition and profit.
Most people focus on linear income in the name of salary, allowances and one-off payments. Wise men on the other hand focus on passive income in the name of royalties, interest rates, value addition and profit.
Relying on linear income is similar to using buckets to fetch water from the river. With time, you’ll get too old and too tired to transport them to and fro and that means you’ll have to starve for as long as you don’t go to the river.
Relying on passive income on the other hand is similar to building a pipeline. It may require a lot of work at the beginning but with time, you’ll no longer have to go to the river to get water – the river will come to you and you’ll not starve.
This is the most fundamental principal of wealth creation that most (including you) are oblivious about.
This is the most fundamental principal of wealth creation that most (including you) are oblivious about.
5.Time-wasting habits
Time is money.
The rich understand this. Sixty-five percent of the rich created at least three streams of income during their lives . Conversely, the poor all relied on one stream of income. They didn't invest their time wisely in building their careers or building a side business.
In my study, I uncovered many time-wasters the poor engaged in that ultimately cost them money: Seventy-seven percent of the poor admitted to watching more than one hour of TV each day.
Their preference? Reality TV wins hands-down. Seventy-eight percent of the poor watch reality TV shows.
Time is money.
The rich understand this. Sixty-five percent of the rich created at least three streams of income during their lives . Conversely, the poor all relied on one stream of income. They didn't invest their time wisely in building their careers or building a side business.
In my study, I uncovered many time-wasters the poor engaged in that ultimately cost them money: Seventy-seven percent of the poor admitted to watching more than one hour of TV each day.
Their preference? Reality TV wins hands-down. Seventy-eight percent of the poor watch reality TV shows.
The rich, on the other hand, are not big on TV. Sixty-seven percent watch less than an hour each day, and it's not reality TV that they tune into. Only 6% watch reality TV.
Another time waster is the internet. Seventy-four percent of the poor in my study spent more than an hour each day on the internet. These days that means Facebook, Twitter, Instagram, Snapchat, or YouTube.
Conversely, 63% of the rich spent less than an hour each day on the internet.
This freed up more time to
read for self-education . While many of the poor in my study said they read regularly, 79% admitted that they read strictly for entertainment.
This freed up more time to
read for self-education . While many of the poor in my study said they read regularly, 79% admitted that they read strictly for entertainment.
Only 11% of the rich said that they read for entertainment. Instead, they focused their reading on self-education: biographies of successful individuals, career-related reading, self-help, history, and money matters.
When you're wasting your time watching TV, on social media, or reading for entertainment, it leaves little time to do productive things like reading to learn, building relationships with other success-minded individuals, via networking or volunteering, or building a side business.
Time does not discriminate. Everyone gets 24 hours, rich or poor. The rich simply choose to spend their time differently, doing things that are productive.
Time does not discriminate. Everyone gets 24 hours, rich or poor. The rich simply choose to spend their time differently, doing things that are productive.
6.Bad spending habits.
The rich in my study made a habit of tracking their spending in the early days of building their wealth. It's easy to lose sight of where your money is going. If you don't have a lot of money you need to get into the habit of tracking every penny.
The poor in my study didn't. I uncovered certain poor spending habits that held the poor back in life: Ninety-three percent admitted that they did not budget their spending.
The rich in my study made a habit of tracking their spending in the early days of building their wealth. It's easy to lose sight of where your money is going. If you don't have a lot of money you need to get into the habit of tracking every penny.
The poor in my study didn't. I uncovered certain poor spending habits that held the poor back in life: Ninety-three percent admitted that they did not budget their spending.
Sixty-six percent admitted that they were not frugal with their money. They had a bad habit of making spontaneous purchases with their money.
Oftentimes, this required them to use credit cards. Eighty-eight percent of the poor in my study had over $5,000 in revolving credit-card debt. Sixty-nine percent used those credit cards to purchase big-ticket items. And 77% had multiple credit cards. Conversely, 92% of the rich relied on only one credit card.
Sixty-eight percent of the poor said they don't use coupons.
Sixty-eight percent of the poor said they don't use coupons.
Sixty-one percent of the poor did not own their homes — they rented them — while 100% of the rich owned their homes. When you don't own you home, you are unable to build home equity, which comes in handy when you retire or to help your kids with college costs.
7.Poor savings habits.
Only 5% of the poor in my study saved 10% of their income. None saved 20% of their income.
Conversely, 94% of the rich in my study saved 20% or more of their income.
Only 5% of the poor in my study saved 10% of their income. None saved 20% of their income.
Conversely, 94% of the rich in my study saved 20% or more of their income.
Many of the millionaires in my study started out poor and did not have large incomes during their lives, so this was a habit they adopted while they were still poor.
Fifty-one percent were small-business owners who watched what they spent in order to enable them to save money. They then invested their savings, as well as the investment income generated by their savings.
After many years, their savings and investments compounded, eventually turning them into self-made millionaires.
After many years, their savings and investments compounded, eventually turning them into self-made millionaires.
Building wealth takes time.
It doesn't happen overnight. It took the average millionaire in my study
32 years to become rich . The younger you are, the more time you have to build wealth.
It doesn't happen overnight. It took the average millionaire in my study
32 years to become rich . The younger you are, the more time you have to build wealth.
But that's only possible if you eliminate destructive money habits and adopt sound ones instead.
8. Overstimulating your brain.
Overstimulating your brain a.k.a multitasking is a negative habit that could cost you a lot. In my “How to Fall Asleep In One Minute” ebook, I talked about the effects of this on your sleep, but it can do much more.
Overstimulating your brain a.k.a multitasking is a negative habit that could cost you a lot. In my “How to Fall Asleep In One Minute” ebook, I talked about the effects of this on your sleep, but it can do much more.
Overstimulation happens when you are reading a book and taking constants peeps at the Tv, or when you are cleaning and then you drop it for another activity or another. You are doing your home work and checking your social media messages.
In the end it takes you longer to finish one activity. So what I am saying here is that when you are thinking about or doing too many things at once, it makes it harder for your brain to concentrate on the most important thing and really think or work it through.
Students can agree to this that when you are reading in a noisy place, it is not easy to capture any useful information.
I recommend that you please drop this habit. No matter how important both things are, always do one first. You might think that by doing both of them you are actually buying time.
But I tell you that you will miss a lot of information and create a lot of loopholes which will come back to hunt you long term.
I recommend that you please drop this habit. No matter how important both things are, always do one first. You might think that by doing both of them you are actually buying time.
But I tell you that you will miss a lot of information and create a lot of loopholes which will come back to hunt you long term.
9. Lack of Adequate Sleep.
Sleep is very important. Lack of adequate sleep is the reason why most hustlers are still hustling up till today. They will claim that “how can they be sleeping while their mates are making money?”.
Sleep is very important. Lack of adequate sleep is the reason why most hustlers are still hustling up till today. They will claim that “how can they be sleeping while their mates are making money?”.
When you have an ambition and you have knowledge about how to get there, then you need to make a plan. Sleep right influences your ability to make the right decisions and plans, because your brain will be 100% ready to make sure you come out with the best results.
But when you play with your sleep e.g Sleeping from 2am till 10am or from 12am till 4am, then you should be ready to really struggle and strive, because your brain is seriously working hard and not getting enough rest.
Imagine if you had to work from Monday to Sunday, 8am – 11pm, everyday. The reason why such kind of jobs don’t exist is because it is not possible to be productive with such. In the same way if you can’t get the best quality of sleep and I don’t mean just any kind of sleep, then you can’t make the best decisions.
Lack of adequate sleep makes hustling harder (i.e for people that hustle smartly)
Lack of adequate sleep makes hustling harder (i.e for people that hustle smartly)
10. Working With Emotions Instead of Working With Knowledge.
Every human being has emotions which sometimes influence our actions. But for some people it is a way of life. They think with the way they feel instead of what they have learnt and understood.
Every human being has emotions which sometimes influence our actions. But for some people it is a way of life. They think with the way they feel instead of what they have learnt and understood.
Sometimes listening to your emotions can be great but if you add knowledge to it, then you have a bigger, better package.
Your emotions should not determine your decisions, because emotions changes constantly. I remember walking through a passage 3 times just because I felt I was I was missing something.
Sometimes I was right, but most times I was just wrong and this back and forth decision making affected me a lot. It makes it easier for you to doubt yourself when you just feel you are not moving far or fast enough.
Your emotions should not determine your decisions, because emotions changes constantly. I remember walking through a passage 3 times just because I felt I was I was missing something.
Sometimes I was right, but most times I was just wrong and this back and forth decision making affected me a lot. It makes it easier for you to doubt yourself when you just feel you are not moving far or fast enough.
With knowledge, you will be able to make better decisions and know what you are missing this way. You will create a list of everything you could need to move with and when the day comes you will just be ticking the items you have secured on the list. It is that simple and easy.
11.Hardwork equal to Success.
It is a normal norm that if you work hard you will definitely succeed.
It is a normal norm that if you work hard you will definitely succeed.
A quote goes thus I found out that the harder I work,the more lucky I get.
But you and I know that so many hardworking people today are barely living above the poverty line. Because, something those successful entrepreneurs fail to reveal to you is that smart planning plus hardwork equal to success.
No matter how much quality time or how much physical energy or how much brain storming you put into your project, if there is no smart plan behind it then you are no different from a truck pusher who really works harder than a member of the House of the Senate (but who gets paid more?).
Plan smart. Don’t jump in to put your energy and focus into it until the plan is good enough. You might be struggling at a certain business and then someone decides to do the same business and his own will have so much progress.
That guy must have looked at you and seen your loopholes, made plans on how he would make it. Added his own ideas and today he is one step ahead.
That guy must have looked at you and seen your loopholes, made plans on how he would make it. Added his own ideas and today he is one step ahead.
12. Sticking to the plan throughout.
I think I should call this an ideology rather than a habit, but some people are very fond of sticking to a plan they made months or years ago.
I think I should call this an ideology rather than a habit, but some people are very fond of sticking to a plan they made months or years ago.
In reality, people grow and change is inevitable, you are not the same person who made those plans months or years ago, you have grown in knowledge, you have made mistakes and learnt, you have struggled and you have tasted either success or / and setbacks.
Every time I gain more knowledge, I always reshape my plans, this makes it easier for me to see brighter and more achievable goals.
There is nothing wrong with the initial plan, but you can agree with me that when you were young you said you wanted to become a pilot, that was the dream and the plan.. Today what are you?
Try applying this to every part of your life and you will see a change, just like I have seen in mine.
Try applying this to every part of your life and you will see a change, just like I have seen in mine.
B O N U S
Here are some statistics by Thomas.C Corley who study on the daily habits that separate the wealthy from the poor for five years.
1. 63% of self-made millionaires were required by their parents to read two or more non-fiction books every month vs. only 3% of the poor.
Here are some statistics by Thomas.C Corley who study on the daily habits that separate the wealthy from the poor for five years.
1. 63% of self-made millionaires were required by their parents to read two or more non-fiction books every month vs. only 3% of the poor.
2. 6% of the wealthy played the lottery vs. 77% of the poor.
3. Only 16% of the wealth gambled regularly on sports vs. 52% of the poor.
4. 82% of the self-made millionaires pursued a dream vs. 3% of the poor.
5. 68% of the self-made millionaires said they learned success habits from their parents vs. only 6% for the poor.
6. 21% of the wealthy were overweight by 30 pounds or more vs. 66% of the poor.
7. 63% of the wealthy spent less than 1 hour per day on recreational Internet use.
74% of the poor spent more than an hour a day in the Internet.
8. 83% of the wealthy attended back to school night for their kids vs. 13% of the poor.
9. 29% of the wealthy had one or more children who made the honor roll vs. 4% of the poor.
10. 63% of wealthy listened to audio books during their commute vs. 5% of the poor.
11. 67% of the wealthy watched less than 1 hour of TV per day vs 23% of the poor.
12. 9% of the wealthy watched reality TV shows vs. 78% of the poor.
13. 73% of the wealthy spent less than they earned during their entire work lives vs. 5% of the poor.
14. 79% of the wealthy networked 5 hours or more per month vs. 16% of the poor.
15. 92% of the wealthy believed they created their own good luck through hard work and perseverance. 79% of the poor believed the rich were beneficiaries of random good luck.
16. 79% of the wealthy believed they were responsible for their financial circumstances. 82% of the poor believed if you were born poor you could not change your financial circumstances.
17. 78% of self-made millionaires eat less than 300 junk food calories a day. 97% of the poor eat more than 300 junk food calories a day.
18. 95% of self-made millionaires exercised aerobically 30 minutes or more per day, four days a week. Only 23% of poor did the same.
19. 100% of self-made millionaires had a success mentor. None of the poor had a success mentor.
20. 63% of the wealthy had a positive, optimistic mindset. 94% of the poor had a negative, pessimistic mindset.
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