When you hear people talk about building wealth and becoming a millionaire, you likely hear more often about aspirations and dreams than actionable steps they are taking. The typical millionaire is portrayed as a fast-car-driving, designer-clothes-wearing wheeler-dealer who loves showing off their money.
“This couldn’t be further from the truth,” say, Chihee Kim and Milan Kovacevic, co-founders of Finny, who in their careers have met many millionaires of various walks of life. So what’s the anatomy of a typical millionaire?
Here are the five most overlooked millionaire behaviors they observed.
Most millionaires avoid status objects and lifestyles like the plague. They typically spend significantly less than they earn (e.g., take the subway instead of a black car). They also think ahead about their major expenses and make sure they aren’t over-extending themselves.
Always be investing
What happens if you make $100K a year and spend only $30K? You invest the rest! Also, have a long-term mindset and let compounding do its job. Millionaires also focus on investment strategies that maximize non-taxable and minimize taxable income. This allows them to continue building up their earnings over time.
Investing in proven, but boring strategies
Millionaires tend to avoid hot shiny stocks, fancy options and instead direct most of their money towards ‘boring’ investments such as low-cost index funds and real estate. When they decide to invest in something off the beaten path, they spend a lot of time researching it and invest only the money they can afford to lose.
About two-thirds of millionaires work between forty-five and fifty-five hours per week, well above the average. They also tend to sleep less (about 8 hours less a week) and rise early, based on a Business Insider study. Getting up early in the morning to tackle the top three things you want to accomplish in your day sets you up for success!
Constantly be learning
Millionaires don't settle with what they have or who they are today. They work hard to build skills for tomorrow. The wealthy also tends to think more, oftentimes in isolation, and spends more time focusing on personal growth. For example, they read 5.5 hours a week on average—vs. 2 hours a week for the average American.
Think you already have these millionaire traits? Then check out your net worth using this tool from Personal Capital—you may be surprised by what you’ll find out!