The 7 Habits Of Financially Successful People

Posted on Posted in Personal Finance

One of the biggest differences between those that struggle financially and those that succeed are the financial habits they exhibit.

It’s simple. If we develop smart habits, we’ll succeed. If we apply poor habits, we’ll struggle.

Here’s the good news: those that are financially successful share 7 habits that each of us can apply. As we consistently implement the 7 shared habits, they’ll become part of our nature and turn into our habits as well. And when they do, we’ll become much better with money and well on our way to succeed financially.

Here are the top habits of financially successful people.

#1: They Are Financially Aware and Constantly Seek To Improve

Those that are financially successful are aware of where they stand and they are constantly seeking to improve. They know how much they make, how much they spend, how much they invest, and how much they give.

They know their net worth and their net income, but more importantly, they’re constantly seeking to improve.

They strive to make more money, spend it more wisely, invest more consistently, and give more generously. They refuse to settle and they consistently work to boost their income and their net worth.

Helpful Hint To Develop This Habit

It’s impossible to know where you are if you don’t have a system in place to help monitor your finances.

I recommend and use Mint. Mint links to all of my bank and brokerage accounts, and automatically pulls transactions in so I can see where my money is coming from and where it’s going. It also automatically calculates my net worth. I’m able to see exactly where I am financially every time I login. Having such a helpful tool motivates me to consistently improve.

#2: They Have An Inspiring Financial Vision Backed With Goals

The second habit financially successful people have in common is an inspiring financial vision that is supported with goals.

They know where they are, but they also know where they want to be financially. They envision where they’ll be in one year, five years, and 20 years down the road. They set goals to help them get where they want to go.

They reflect on this vision often and remain accountable to the goals they set.

Helpful Hint To Develop This Habit

In order to develop this habit and establish an inspiring financial vision, work through the questions on Step 1 of your Freedom Financial Coach’s Financial Guide.

#3: They Have A Financial Strategy That’s Consistent With Their Financial Vision

The third habit financially successful people share is a financial strategy that is consistent with their vision.

They invest, save, spend, and give in ways that turn their financial vision into a reality.

If they envision retiring early, their investment plan will portray it. If they want go on a big vacation next year, it will be part of their cash management strategy. If they want to donate to charity more, it will be reflected in their spending plan.

Financially successful people have a financial plan and strategy that is perfectly inline with their vision.

They review their vision and strategy often to ensure the two are in harmony, and if adjustments are needed, they’ll modify as necessary. 

Helpful Hint To Develop This Habit

Review and apply Steps 2 & 3 of your Freedom Financial Coach’s Financial Guide in order to develop the habit of implementing a financial strategy that is inline with your goals.

#4: They Invest In Themselves

The most financially successful people are able to add enormous amounts of value to others because they heavily invest in themselves.

They invest in their education, not necessarily formal education, but education nonetheless. Benjamin Franklin said, “An investment in knowledge pays the best interest” and he was right.

Financially successful people invest in knowledge, and they learn new skills and traits that strengthen their ability to better serve and add value to others.

And since your income is simply a function of the amount of value you provide to others, these investments come with substantial pay increases, or they generate multiple streams of income.

That’s why financially successful people are normally paid handsomely and have diverse income streams—it originates in the investments they made in themselves.

Helpful Hint To Develop This Habit

Invest in yourself by listening to podcasts, audiobooks, or motivational speakers. Read informative books. Attend worthwhile seminars, webcasts, or classes. Constantly seek to improve. I recommend reading and listening to an educational and motivational podcast or audiobook for at least 30 minutes everyday.

#5: They Invest Proactively, Consistently, and Wisely

The fifth habit financially successful people share is that they invest proactively, consistently, and wisely.

When it comes to investing, they take massive action. They don’t stand on the sideline waiting for someone to call their number—they force their way into the game. They don’t procrastinate and come up with excuses as to why they can’t invest now. They power through, make it a priority, and make it happen.

They consistently invest over time. They don’t just do it every now and again. They realize that a portion of every dollar they make is theirs to keep. So they consistently invest money every month. 

They also invest wisely. They invest for the long haul with a diverse portfolio that is properly balanced. They take advantage of asymmetric risk/reward, and they don’t waste money in high fees. They maximize their net returns and don’t get blinded by market volatility.

Helpful Hint To Develop This Habit

Review and apply the action steps of all of the linked posts within Step 3 of your Freedom Financial Coach’s Financial Guide in order to learn more about making wise investments. Also, automatically allocate money to your investments every month.

6: They Live Well Below Their Means and Avoid Consumer Debt

The financially successful habitually live well below their means and they avoid consumer debt.

You’ve probably heard the stories of celebrities like Mike Tyson, Nicolas Cage, and Johnny Depp who made millions for years and yet have nothing to show for it. Despite their massive incomes, they could not support their overly extravagant lifestyles.

Those that are financially successful live below their means. That’s not to say they don’t increase their means like we discussed above, they just don’t overspend and over leverage to their downfall.

They avoid all consumer debt. They avoid car loans, credit card debt, family loans, and any other debt on non-appreciating and non-cash flowing assets.

Helpful Hint To Develop This Habit

In order to consistently live well below your means, read and apply the principles within Flip Your Budget Upside Down: The Simple Strategy To Make the Most Of Your Money.

#7: They Give Generously

The last habit of the financially successful is that the consistently give to charity, to their community, to their church, or to any other cause they find meaningful.

They understand that a portion of every dollar they make is theirs to give and they take full advantage of it.

As ironic as it sounds, donating your money towards meaningful causes, is the best investment I know of. Doing so generates the strongest ROI and pays the highest dividends. Don’t believe me? Give it a try, you’ll see.

Helpful Hint To Develop This Habit

To develop the habit of giving, read and apply the principles within Flip Your Budget Upside Down: The Simple Strategy To Make the Most Of Your Money. You’ll not only develop the habit of giving, you’ll develop the passion for it too.

Conclusion

The most financially successful people share seven habits that we can apply into our own life. As we become more aware of our finances, always seek to improve, develop an inspiring financial vision, implement the proper financial strategy, invest in ourselves, invest wisely in assets, live well below our means, and give generously, we’ll be well on our way to succeed financially.

Action Steps

Take action and develop each habit by applying all of the helpful hints.

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Please comment! Please let me know what you think—what you liked, what you didn’t, any questions you have, or future topics you would like to see discussed. I want this to be about YOUR financial freedom! I want to provide answers to what YOU need help with!

2 thoughts on “The 7 Habits Of Financially Successful People

    1. Thanks! Glad you liked it. Living below your means and consistently investing makes a huge difference with your financial success. Those that struggle almost certainly have a hard time consistently spending less than they bring in, and their investing is sparse if it exists at all. Thanks again for the comment and hope to see you around!

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