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In my five-year study of wealth-making habits, I discovered four ways the self-made millionaires in my study built their wealth:
- Depositor-Investor Path
- The road to a big company
- The path of master
- Dreamer-Entrepreneur’s Path
The saver-investor-millionaires in my study developed three important habits that allowed them to accumulate an average of $3,260,000:
- Habit #1 Spend frugally – Being frugal doesn’t mean being stingy with your money. Being frugal means spending your money on the lowest priced, highest quality product or service.
- Habit #2 Save 20% or more of your income – This requires you to maintain a standard of living that allows you to live on 80% of your net salary.
- Habit #3 Savings Bucket System – Identify specific savings priorities and put a certain percentage of your savings into each bucket: wedding, first home, emergency fund, college savings, investments, retirement, etc.
In my latest book, Get Rich Easily—Smart Financial Habits for Every Stage of LifeI shared in my research 23 smart financial habits of millionaire savings investors. These habits ensure financial independence and will likely make you wealthy.
Savings investors in my research employed these smart financial habits, which helped them put their financial success on autopilot. Since they follow these habits diligently, they are able to accumulate wealth automatically over the years. Over the years, their investments appreciate in value, dividend income accumulates automatically, and investment interest income accumulates automatically.
People who follow these three smart money habits are able to grow their wealth even while they sleep—which happens to be a goal shared by all the millionaires in my Wealth Habits Study.
Conversely, those who cannot make ends meet end up accumulating debt. While they sleep, interest on the debt accrues. Every time they wake up, they lose eight hours.
If you want the easiest way to build wealth, the saver-investor path is the way to go. It does not require any advanced degree. It doesn’t require you to take huge risks. And it doesn’t require you to work long hours that negatively impact your family and friends.
For potential savings investor millionaires, building wealth requires you to develop the habit of paying yourself first and learn to live on what is left. When you decide to save money first, it forces you to lower your cost of living so you can achieve your goal of saving 20% or more of your net salary. This allows you to leverage your savings by investing them carefully and consistently, so your savings can grow – even while you sleep!
