8 Habits of High Net-Worth Individuals

The following is a guest post from Rhett Ahlander, a finance writer reporter for Fusion 360, an SEO and content marketing agency. Information provided by Sanctuary Wealth Management.

Making Money and Investing Wisely

When it comes to making money and investing wisely, any financial advisor in Idaho and elsewhere would say that it takes a few key lessons in order to remain wealthy and successful. For people like Warren Buffet and Christy Walton, arriving at a place where the term “wealthy” was a constant characteristic listed on their resumes took a lot of work. Here are eight habits of high net-worth individuals that have brought them to extreme wealth and success.

The Early Bird Catches the Worm

“I will start tomorrow” isn’t a phrase that successful people use. It is important to start early and begin looking for opportunities to grow and learn. Starting early on a savings and retirement plan will make things easier in the future and will also bring more success in the long run.

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Increase Savings Deposits

Adding even a small amount to a savings account is better than nothing at all, but it is much better to deposit the maximum amount possible each time. It will definitely pay off after a few years, and will most certainly pay off when the retirement years inch closer.

Mimic Some of the Actions of a Poor Person

Living like you are rich is fun, but not always the most ideal and smart path to take. Living like a poor person is very important. This doesn’t mean someone needs to live on Ramen Noodles each day to be successful. However, living frugally and cautiously will save a lot of money. This is one point that any financial advisor in Idaho or elsewhere would suggest doing.

Pay Off Credit Card Balances Right Away

Credit cards are important when applying for car or home loans, but they can also do a lot of damage to a person’s credit and name as well. When a balance shows up on a credit card, it’s best to pay it off right away or as soon as possible. Credit shouldn’t be a crutch; it should be a pogo stick.

Avoid Shopping Temptations

“Keep up with the Joneses.” Have you ever heard this popular phrase? It is actually a real thing. Most people in Idaho and nationwide naturally like to have nice things and also like to compare their possessions to other people’s belongings. As difficult as it may be to resist shopping sprees and impulse purchases, it could be the thing that prevents debt and insecurity.

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Create a Plan That Works for You

Everyone is different. There is not a one-size-fits-all financial plan that works for everyone on the planet. Due to this fact, a financial advisor suggests finding out what works best for you and your family.

Calculate all existing bills and debts, and factor in the net income. Create a budget that the family can stick to and work with. This can also be a learning opportunity for children. Talking with a financial advisor in Idaho or elsewhere for help on making a great plan.

Don’t Lose Sight of the Goal

Once a plan is made, stick to the task. This will ensure constant focus. Losing sight of financial goals can be easy, but sticking them is very critical when striving for success in the long run. Most high-net worth people in the world stuck to their guns and finally came out on top.

Finding the right financial advisor in Idaho or other areas in the country can pay off and bring success to anyone truly seeking it.

Blogger-in-Chief here at RetirementSavvy and author of Sin City Greed, Cream City Hustle and RENDEZVOUS WITH RETIREMENT: A Guide to Getting Fiscally Fit.

4 Comments

  1. James – One piece of information that I received from a good friend whom I flew with in the USAF and is now a very successful CFP, is the power of cash. Although returns on MMA/MMF’s is painfully low, he advised me a number of years ago over dinner to ignore the return and consider on the value of cash as protection during market downturns, especially when you’re closing in on retirement. Here is his advice which Mrs. C and I have followed…….and we’re very glad we did!

    First, as you’ve mentioned many times before is to ensure that you have 8-12 months living expenses set aside in a MMA/MMF. Expenses must mean “everything”, not just items such as your electric and car insurance bill, groceries, etc. This must include discretionary spending cash, travel dollars as well. Remember, you don’t want to downsize your quality of life.

    Next, plan on having enough cash set aside, above and beyond your emergency fund to allow you live for at least five years on cash alone so you don’t have to rely on tapping your investment accounts, especially if the market swoons just prior to retirement. Mrs C and I have set aside enough cash, above and beyond our emergency fund, which combined with my military retirement, to live for a minimum of seven years. At this point, both of her pensions will kick in and we still haven’t touched our nest egg. Social Security won’t be touched until at least age 67. We slept well each night even as the market continued to “correct” since the first of the year.

    Five years of living expenses in cash is no doubt a big number. We’re (James and I) fortunate in that we have guaranteed monthly income in the form of a monthly military retirement which lowers the amount of cash needed.

    The recent market correction was unsettling to watch, even for someone such as myself who’s been an active saver/investor since January 1986. Back then, the DJIA started the year at a little over 1500. Needless to say by October 1987, I thought the world was coming apart and I was facing financial ruin! Quite the contrary, it was absolutely the best learning experience imaginable. Within a year, the market had recovered it’s losses and was establishing a new high.

    This learning experience was tested again in March 2009 when the DJIA had an intraday low of 6500. By the end of the year, the DJIA was back above 10,000. Now markets may not snap back that quickly but the lesson remains the same, that being patience. All too often, when markets correct, they often overshoot to the downside not because of fundamentals but emotion. This can happen on the upside as well.

    Not even the best market analysts on CNBC, Fox Business or Bloomberg can tell with absolute certainty what the market will do from day to day. Sure, every now and then one gets lucky and gets it right. Take a long term approach, invest regularly, stay fully invested according to your risk tolerance and don’t forget the power of cash as you close in on retirement!

    Stay safe out there in the Pacific my good friend and we’ll look forward to getting together with you and KM next month……..

    • Sound advice, my friend. Always great to get your insights. I’m going to convert this to a post where it will have a chance to be seen by more readers. Keep an eye out for it in a few days.

  2. I agree James, there is no one size fits all approach. I like the suggestion to mimic the actions of a poor person. All good tips, really!

    • Those are all great tips, and you are right, Mimic Some of the Actions of a Poor Person, is one that sticks out a little for me.

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