10 Wealth Creation Habits

by TTMK on December 31, 2012 · 8 comments

With the new year upon us, it’s a time where we can get fired up for success in the upcoming year.  This might mean continuing and building upon our prior year wins, turning things around, or somewhere in between.  Whatever the case, this is a time for optimism and a push for reaching our dreams!

Along those lines, there are many types of goals people have.  Some focus on losing weight, or getting in shape. Others focus on relationships.  Yet others focus on money. The latter is where I think we can look a little bit more closely, in terms of how we can reach money goals through impacting our habits.  Specifically, habits to increase wealth.

So, here are some habits (or actions) that we can consider as important in our efforts to make money and create wealth:

1) Value Education.  One part of this is embracing  the value of a formal, college education.  Whether you work toward an information systems degree or business management degree, it is important to progress in your education.  It’s been almost de rigueur these days to discredit college as a good use of money, and to some degree I see the source of this in that tuition for kids these days is outrageous in many cases.  However, one can also make smart decisions on where to go, and really focus on ROI as well the long-term impact of student loans when making a college choice and subsequent investment.  Like it or not, education is not going away, and is only more important in a globalized economy.  We should be cognizant of this for our kids.

2) Keep on Learning.  We need to avoid being static, and focus constant learning.  Things are changing all the time, as change is constant as the saying goes.  The thing is, it seems like change is happening at a more accelerated rate every year.  To keep up, much less get ahead, we need to keep on learning new things and considering new paradigms.

3) Avoid the Big Mistakes.  There are some things that can really destroy net wealth, and we need to be careful to avoid them.  These could include avoid accidents by driving carefully (no texting and driving, etc), not getting scammed, avoiding divorce, being careful with risky investments, not putting all our eggs in one basket, and so on.  The bottom line that sometimes big mistakes are made and it can be hard for people to recover.  Can’t increase wealth when you’re losing money or the ability to earn money by making bad decisions.

4) Think Big.  Now, we all need to be realistic about what we can do in a short period of time.  But if we secretly have big dreams for what we want to accomplish, why not acknowledge this and think big?  If we aim high, and only reach halfway, that might not seem great.  But 50% of 100 is better than 100% of 10.  Aim high!

5) Be Tenacious.  Of course, tenacious doesn’t have to mean difficult, ornery, or anything of the like.  Rather, I mean very determined and goal-oriented, where we don’t give up easily.  I don’t know about you, but I’ve found that times when I’ve really gone the extra mile to focus and not give up, are times when true successes have blossomed.

6) Save as Much as Possible.  Don’t listen to people who think saving is boring, that it’s a sign of being stingy, etc.  They might be free spenders who simply don’t get the difference between needs and wants. Don’t think you will be able to work until you’re 80 because you won’t.   We need to save early in life, save as much as possible, and let compounding be our friend!

7) Don’t Focus On Savings in All Situations.  Okay, does that seem to contradict what I just said above? Maybe on the surface, but I think there are some areas where we shouldn’t choose the money-saving option as the automatic default.  Examples include food (better to buy healthy vs. cheap unhealthy), coupons (don’t spend 30 minutes cutting coupons to save you $3, unless you value your time at $6 per hour), and driving (going 10 miles extra to a store with cheaper prices costs time and gas).

8) Truly Work Hard.  Now, most people I know would like to make as much as possible, and have as much enjoyment as possible, with as little work as necessary. Fair enough.  But there are generally no shortcuts.  Easy money with little work seems a little like a snake oil salesman’s line. Selling the dream is popular these days, and be careful not to get too caught up. In my experience, working hard (and smart of course) with genuine focus is vital to getting ahead.

9) Know When to Decompress and Separate.  By this, I mean letting yourself let go of work or business, and totally focus on other things entirely.  You know, like family, fun, hobbies, etc.  In my own experience, I tend to be really effective when I space out the hard work in between other things that can occupy my time.

10) Make Healthy Decisions.  Get a full night of sleep, eat healthy food, exercise, and manage stress.  It’s not worth taking shortcuts with these things in order to work, let alone waste time.  I really think in the long run, we’re better off financially by not compromising on these things.  Sleep is a big one here – there is no pride in burning the midnight oil to moonlight or even work the “day” job.  Life is short as it is, and can be shortened even more by such unhealthy moves.  Focus on health!

My Questions for You

Do you focus on any of these habits?

Do you have any more to add?

What are your big financial goals for the year?

{ 8 comments… read them below or add one }

AverageJoe December 31, 2012 at 1:26 pm

I like the dream big advice. Too often people aim too low and never realize their full potential. So, this year I’m going to be President AND an astronaut! Happy New Year!

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TTMK January 2, 2013 at 8:28 am

Happy New Year to you too….looks like some big dreams for 2013, eh? :)

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Goldeneer January 2, 2013 at 10:17 am

My wealth is very high for my age group (25-30) so I can share some insight.

3. Avoid Big Mistakes
I started investing in RE at 25 and made some mistakes along the way. By getting insight from successful investors and using my brain, I was able to avoid even bigger mistakes and learn from my own. Always take into consideration Murphy’s law.

5. Be Tenacious
Some years have been more difficult than others when buying properties and managing them. If I had quit after my first rental property, I would not be financially independent 5 years later.

6. Save as Much as Possible
This one applied early on in my investment phase. Now I can spend a little more on frivolous expenses because I have no debts to repay other than my mortgage and my entire retirement fund is fully funded.

Reply

TTMK January 2, 2013 at 8:22 pm

Goldeneer – thanks for sharing your experiences. Glad that you’ve been able to employ these suggestions already, and have the results to show for it! By the way, I totally agree that one should take into consideration Murphy’s Law. Not everything goes according to plan, and we need to be able to appropriately react and regroup.

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Shilpan January 5, 2013 at 8:22 am

Save like a mad man! It’s essential ingredient of wealth building. Next, save wisely. Those two habits have shaped incredible life for me.

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TTMK January 5, 2013 at 9:24 pm

Shilpan – saving is critical, no question about it!

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Andrea January 10, 2013 at 9:23 pm

Love the post!

I really like #7. It is so important to spend money on the things that bring value. Saving money to just save money can end with less than desireable results.

My big goal this year is to save as much as possible before my job comes to an end this year. I want to be able to make an informed decision about my next step and not rush into anything.

Happy New Year

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TTMK January 11, 2013 at 10:25 pm

Andrea – Happy New Year to you too! Great idea to save as much as possible in that scenario, to give yourself some space to make a decision you like.

Reply

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