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5 Wealth Habits All Successful Entrepreneurs Share

5 Wealth Habits All Successful Entrepreneurs Share

Habits are what make us who we are. Exceptionally successful entrepreneurs have learned to use the power of habit to their advantage. That is why they’re able to separate themselves from the rest and lead their business ventures to success.

One of the areas they channel the power of habit towards is how they handle wealth. By developing some positive habits towards wealth, making and managing money successfully comes very easy.

Some of the world’s richest people even have hordes of titles dedicated to studying the habits that made them successful managers of wealth. Warren Buffett and Bill Gates all have habits that make them insanely successful. This article will be sharing some of the habits that successful entrepreneurs embrace to keep their wealth increasing.

1. They Make Reading A Habit

First, this is the fundamental habit that every successful entrepreneur all share.

For those wondering what reading has to do with wealth, it’s true that the secrets to success are hidden in the pages of books. Warren Buffet says he reads about 600 pages every day. With so much knowledge on wealth management, it’s little wonder the billionaire investor keeps growing.

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To become better at managing wealth, start by picking up a book to read every other day. Business Insider shares a list of books Warren Buffet recommends everyone should read about wealth and money.

Warren Buffet is not the only successful entrepreneur who reads. Elon Musk taught himself rocket science through reading which, to be honest, sounds harder to learn than managing wealth. Mark Zuckerberg, Bill Gates and Mark Cuban are other examples of successful entrepreneurs who love to read.

2. They’re Not Shy To Bargain For The Best

While the average person thinks it’s not worth haggling over price, successful wealth managers think otherwise.

Bargaining is simply in the blood of highly successful entrepreneurs.

“Apart from making stupid money mistakes, not wanting to get a good price from everything is a quick way to go broke,” says Yasir Khan of WealthKept.com.

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3. They Diversify Their Income

It’s a common statement that the average millionaire has several sources of income.

Income diversification is the secret to the wealth of many successful entrepreneurs. They understand that you can only make so much from running one business. Google’s parent company, Alphabet, has many businesses under it and acquires continues to acquire many. Facebook, Apple, Samsung and almost all of the world’s leading companies and entrepreneurs own several businesses.

Before running for president, Donald Trump owned over 500 businesses around the globe.

To keep wealth coming you have to look into other sources of income other than your primary job or business. One way to start diversifying your source of income is by converting your earnings into profit-yielding ventures. Live off the profit and reinvest the capital.

4. They Invest

Invest first, save, then spend.

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That’s one of the main ways successful entrepreneurs get to where they are. It might not be comfortable at the start, but from constant practice and by employing discipline along the way it becomes habit.

By forming an investment-focused habit, anyone can build wealth easily. It compounds. Instead of spending away all your earnings, you put some away till it grows into a sizeable amount of money. It should be separate from your emergency savings. Once you’ve amazed a sizable amount of money, reinvesting it into something like real estate, shares or government bonds will help you create passive income.

Passive income is one way to build sustainable wealth. By cultivating the habit of investment, successful entrepreneurs are able to build several sources of passive income.

5. They Love Numbers

The human mind is easily inundated by figures and numbers. This makes looking at our accounts and tracking how we spend difficult. Successful entrepreneurs, however, know that they must make crunching numbers a habit.

If forming a habit of breaking down numbers doesn’t come easy to you, using financial management apps like Mint or Level Money, to keep track of your spending is another option.

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6. They are Frugal

Frugality is a habit that’s common among the super-rich.

Being wise about your money and prioritizing your spending is a key trait. Highly successful people don’t spend on impulse nor do they spend just to impress others. They may actually live well below their means.

This habit makes it possible for them to invest their money into things that will accumulate more wealth for them.

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Published on May 7, 2019

How to Invest for Retirement (The Smart and Stress-Free Way)

How to Invest for Retirement (The Smart and Stress-Free Way)

When it comes to stocks, I bet you feel like you have no idea what you’re doing.

Everyone who’s not a financial expert has been there. I’ve been there. But, time is passing and you need to be crystal clear with how you’re investing for your retirement.

Otherwise, it’s back to work until you can afford not to. So, how can you invest for retirement when you’re not a financial expert?

You take the time to learn the fundamentals well. If you do, you can grow your wealth and retire happy. The best part is that you don’t need to be a financial expert to make smart investment decisions.

Here’s how to invest for retirement the smart and stress-free way:

1. Know Clearly Why You Invest

Odds are you already know why should invest for retirement.

But, maybe you know the wrong reasons. It’s time you get clear on why you’d like to retire. Here are some questions to help you get started:

  • Will you spend more time with your family?
  • What does retirement mean to you?
  • Are you looking to launch that business you’ve been holding off for years?

Everyone wants to retire but not for the same reasons. Once you’re clear for why retirement is important for you, you’ll focus on making it happen.

Investing in the stock market allows you to take advantage of compound interest.[1] All this means is that your money earns money on top of its interest. A reason why investment in the stock market is one of the best ways to plan for retirement.

2. Figure out When to Invest

“The best time to plant a tree was 20 years ago. The second best time is now.”– Chinese Proverb

It’s true if you’d had started investing when you were 10 years old, you’d have a lot more money than you do today.

The reality is that most people don’t start investing until it’s too late. So, if you’re currently waiting for the perfect time to start an investment, it would be today. Open your calendar and block out 2 to 3 hours to choose how you’ll invest for retirement.

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A quick way to get a snapshot of where you stand is to use Personal Capital. Input all your personal information and spend some time setting your retirement goals. Once completed, you’ll know where you stand with your retirement.

Having a savings account for retirement isn’t planning for retirement. Why? Your money loses value when you factor in US inflation.[2]

3. Evaluate Your Risk Tolerance to Create the Perfect Portfolio

Investing your money well depends on your emotions.

Why?

Because when the market drops most people panic and withdraw their money. On average, the US stock market yields an annual 6% to 7% ROI (return on your investment.) But, this won’t happen if you’re worried about short-term loses.

Before you invest your next dollar, know your risk tolerance.[3] Your risk tolerance determines the number of risky and safe investments you’d have.

Regardless of your investing style, you need to view investing for retirement as a long term game. Know that some years you’ll lose money but recoup this in the long-term.

Avoid watching market-related new. Also, create a double authentication to log in your investment account. This way you’re less likely to withdraw your money.

4. Open a Reliable Retirement Account

Depending on your circumstance, you may need to open a new brokerage account. This is the account is where you’ll invest your money.

If you’re currently working for a company, odds are that they offer a 410K investing account. If so, here’s where you’ll invest most of your money. The only problem with this is that you’re limited to the stock options that are available.

You do have the option to open a separate IRA (individual retirement account.) Here are some of the best brokers:

  1. Vanguard
  2. TD Ameritrade
  3. Charles Schwab

5. Challenge Yourself to Invest Consistently

Committing to invest for retirement is hard, but continuing to do so is harder.

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Once you’ve started investment for your retirement, you run at risk from stopping. Often you’ll want to contribute less, so you’d have more money in your pocket.

That’s why it’s important that you create a budget that allows you to invest each month. If you’re working for a company, you can set a percentage for the amount you’d like to contribute each month. Most people by default contribute 1% but aim to contribute 10% to 15%.

Be the judge for how much you can afford to contribute after covering important expenses. To stay motivated, use Personal Capital to view your net worth.

A benefit to contributing money to your retirement account is not taxed. For example, if you earn $100 and invest 10%, you’d contribute $10, then get taxed on the remaining $90. As of 2019, the most you’re able to contribute towards your 401K is 19K but this can change.

6. Consider Where to Invest Your Money

The most common way to invest your money is in stocks, but it’s not the only way. Here are other ways to invest:

Robo Advisors

Robo-advisors[4] are fancy algorithms that’ll choose the best investments for you. Sites like Wealthfront make it easy for first-time investors to invest their money. You’d input information about yourself and set your risk tolerance.

Then, set your monthly contribution amount and your robo-advisor would do the rest. Robo-advisors charge a fee to manage your money, but less than regular advisors.

Bonds

Think of bonds as “IOUs” to whomever you buy them from.

Essentially, you’re lending money and charging interest. Like stocks, not all bonds are equal. Some will be riskier than others depending on their rating.

Here are the different types of bond categories:[5]

  1. Treasury bonds
  2. Government bonds
  3. Corporate bonds
  4. Foreign bonds
  5. Mortgage-backed bonds
  6. Municipal bonds

Mutual Funds

Picture a group of people dumping all their money in a jar that’s managed by a professional. This is how mutual funds work. The fund manager manages the money looking to earn capital gains (interest.)

One of the best types of mutual funds is index funds. Since these funds don’t try to beat the market and instead follow it, they need less research. Because of this they often charge the lowest fees and yield the best long-term results.

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Real Estate

Yes, buying a home is an investment when done correctly.

Imagine buying a home and using it as a rental property. After repairing it, you receive a monthly surplus check of $100 to $200.

This may not sound like a lot, but repeat this process enough times and you’d earn a large amount of passive income. That’s why real estate is one of the best investments to not only retire but become wealthy.

But, it requires a lot of money to start and you should expect losing money along the way as you learn the process.

Savings Accounts

Your money can still grow in a savings account. Nowadays most online banks offer a 2% annual return. Although the average inflation is higher your money will be available when you need it.

7. Master Disincline to Dodge Short Success

Investing for retirement is a long-term strategy. That’s why you need to master delayed gratification. All this means is delaying short-term pleasure for something bigger in the future. Research shows that those who have delayed gratification are more successful.[6]

So how can you master delayed gratification?

By building your discipline.

Think back to what retirement means to you. A clear purpose will help you avoid withdrawing your money during a market downturn. It’ll help you contribute more towards retirement when you’d want to waste it instead.

Your journey towards retirement will be long, so reward yourself along the way. Choose a reward that’s relevant and meaningful, so that you reinforce positive behavior. For example, after contributing more towards retirement, treat yourself to dinner.

8. Aggressively Invest on This One Investment

I’ve mentioned several types of investments but haven’t covered the most important one.

It sounds cliche but here’s why you’re your best investment towards retirement. The more you know, the more money you’ll be able to make. The more good habits you adopt, the more secure your retirement will be.

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More importantly, investing in yourself is an investment that no one can take away. There’s no market downturn nor tragic circumstance that’ll wipe your knowledge and experience.

But, how can you invest yourself?

Reading books, blogs, and anything that’ll help you learn new topics daily. Listen to podcasts and audiobooks on your commute to/from work.

Save money to buy courses and hire coaches. I used to believe hiring coaches was a waste of money when I could learn the subject alone.

But, coaches see your blind spots and hold you accountable. Hiring the right coach will help you achieve your goals faster than you would’ve alone.

Retire Happy with Excess Money

The key to a secure financial future doesn’t only belong to financial experts.

It’s possible for you and I. What if you were able to retire earlier than most people and weren’t a financial planner? What if you were able to focus on what you enjoy doing the most while your money was working hard for you?

I know this sounds impossible now, but the truth is you’re capable of taking charge of your retirement. I’m not a financial expert but I’ve learned how to invest my money by reading books and learning from others.

Investing your money is scary. So start small and invest a small amount of your money with a robo-advisor. Feel your money drop and rise for a month or two. Then, invest more and keep this up until you’re aggressively saving for retirement.

One day, you’ll wake up with a net worth you’re proud of – confident about your retirement. You now know a few strategies you can use to invest in your retirement. Will you take action to retire happy?

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Featured photo credit: Matthew Bennett via unsplash.com

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