As we leave 2020 behind, there are lessons we can carry into the New Year to stay on top. After all, 2020 was an unpredictable year, and we don’t see that changing…at least for 2021. What we can do is make the most of the opportunities given to us and learn to be more adaptable.
Our circumstances and environment are often beyond our direct control, yet you have more control than you think. Your actions (or reactions), your attitude, and how you navigate challenges are all up to you. So rather than looking down at where your feet are planted, it’s time to lift your gaze to the future you want to create…and start walking in that direction.
7 Wealth-Building Habits for a Prosperous 2021
This is the time of year where we make resolutions and declare what we want from the next 365 days. And knowing that we can’t control the world means it’s time to look inwards. What habits can you establish that will help you create the life you want?
Today, we want to explore 7 of the most commonly practiced habits of the wealthy. You may have other habits you want to sprinkle into your routine, yet remember to go slow and start small.
As Tony Robbins says, “Success leaves clues.” So consider practicing some of these habits in your life and see where they take you.
1. Be an “Early Bird”
Most million-and-billionaires have this in common: they wake up consistently before 6am. Thomas C. Corley, who collected data over 5 years, found that 50% of this demographic were waking up at least 3 hours before their workday. Across the board, this is one of the most consistently practiced habits of the wealthy.
In The Billion Dollar Secret, each of the billionaires interviewed reported waking up at or around 5:30 am. Most feel that this habit helps them to mentally prepare for the day, and have some much-needed time to practice “self-care.” Often, waking up early gives you more time for exercise, reading, spiritual reflection, meditation, and preparation for the day. What would you do with three extra hours in your morning?
2. Prioritize Movement
In an interview for Entrepreneur.com, Richard Branson claims that he “can achieve twice as much in a day by keeping fit.” In fact, he regularly offers up the advice that working out is one key to earning more money.
Most top earners feel similarly, with research from The Millionaire Nextdoor confirming that millionaires exercise around 3.5 hours a week. So what does exercise have to do with entrepreneurship? Well, apart from the health benefits of exercise, staying involved in athletics can teach valuable lessons about leadership, teamwork, and wins or losses.
3. Read Non-Fiction
Corley’s research also showed a direct correlation between reading and success. Those who reported less time spent watching television, and more time reading (and learning), also tend to be more financially successful.
Warren Buffett, everyone’s favorite investor, is known for reading for several hours of his day. His reading regimen includes earnings reports, a variety of newspapers, and non-fiction books. This reading list gives him an excellent understanding of economic trends. His advice? “Read 500 pages every day. That’s how knowledge works. It builds up, like compound interest.”
4. Diversify Your Income Streams
This is perhaps less of a habit and more of a “step” to success. It’s known that the wealthy rarely rely on just one income stream. In fact, the average millionaire is said to have at least 7 sources of income. While some of this income will be earned income, some of it is going to be passive income.
These sources can include:
- Business profits
- Real estate investments
- Interest on savings
- Capital gains on investments
- Stock and/or life insurance dividends
- Royalties on intellectual property (courses, books, etc)
This is an instance where going slow and starting small really counts. Start with adding just one income stream and see where that takes you.
5. Own a Home (or several)
Very few of the world’s millionaires are renters. It’s just a reality of long-term renting.
If you already own your home, great! Now is the perfect time to consider owning an investment property. We’re predicting that the “Covid economy” will cause more foreclosures, which will drop prices. It will serve you well to get your affairs in order before that time comes.
To prepare, consider the following:
- Saving cash for a down payment
- Clean up your credit
- Research your dream market and property types
- Get pre-approved on a mortgage
- Enlist professional support and advice
6. Become a Saver
Perhaps one of the most important (in our humble opinion). Having savings will protect you from the unexpected (like 2020), and keep you open for all kinds of opportunities. We recommend saving 20% of your income, yet it’s important to start where you can–even if it’s only 5% for now!
Starting with a bank account or credit union, you can begin your saving journey, if you haven’t already. We hope that this past year has inspired more people to become more diligent savers. Once you have a big enough buffer of “everyday savings,” we recommend getting a whole life insurance policy for greater long-term growth and certainty.
7. Foster Relationships
Research has shown that there is a link between healthy relationships and financial success. In Harvard’s nearly 80-year research, the Grant Study, they’ve concluded that people with loving and supportive relationships tend to build more wealth.
We like this breakdown of the study, called “All You Need Is Love.” The findings detail the exact success of different relationships.
In another study, Jay Zagorsky, author of “Marriage and Divorce’s Impact on Wealth,” concluded that married couples were more successful at building wealth. Not only did he find that married couples often double their individual wealth, he saw that those who divorced often erased those gains entirely.
What Habits Will You Employ?
What would you do with extra time in your morning? Can that habit spark new habits?
How can you add a stream of income and save more of what you make?
What steps will you want to take to acquire a new property?
How can you nurture your most important relationships?
We hope you see how these habits can enrich your life now, and in the future. The small steps you take now will help you to navigate an uncertain world with more certainty.
If there’s a way we can support you, reach out to us at firstname.lastname@example.org, or get in touch with a Prosperity Economics Advisor directly.