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22 Dos and Don’ts of Rich People

22 Dos and Don’ts of Rich People

Rich people are controversial and interesting to talk about. Not necessarily because of the money they earn, but the fact that they are able to create a dream lifestyle achieving more freedom and time for their family, passions, and dreams.

Getting rich doesn’t happen by accident. There are some external factors that influence the process; however, the dos and don’ts in everyday life play a significant role.

Wealthy individuals tend to have many things in common. Here are 20 of them.

1. They set achievable and specific goals.

More than 60% of rich people who took part in a research agreed that they focus on their goals on a daily basis. What’s more, the goals they set themselves are achievable through specific physical actions, so they know exactly what separates them from achieving it.

2. They create to-do lists and review them daily.

To come closer to their goals, rich people spend time creating to-do lists and maintaining them every day. Whatever you want to accomplish, there’s a certain amount of tasks you need to do in order to get there. This is what a rich person makes sure to determine. With that knowledge, they commit to work on it day after day, with no excuses.

3. They take care of their bodies.

To fully focus on their ambitions, they need functional and efficient bodies. Through a healthy diet, regular exercises and treating the body as a temple, they accelerate the progress, stay in shape, avoid laziness and separate themselves from the crowd.

4. They read daily and they love it.

Rich people don’t only feed themselves with healthy food, but they also feed their minds with wisdom and information. Almost 90% of rich questionnaires agreed they love reading. Mostly, it’s self-improvement books and nonfiction, which serve as a great source of inspiration and knowledge.

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5. They listen to audiobooks while commuting.

Instead of blasting pop music while being on the road, rich people listen to audiobooks so the mind is always in the mood for achieving extraordinary results. Let’s say you spend an hour a day in traffic. If you devote it to audiobooks or podcasts, that’s 365 extra hours of self-improvement time in a year.

6. They are the hardest workers in the room.

When asked for the secrets of success, Dwayne Johnson, a man who went from poverty to Hollywood, said there’s no secret sauce. It’s always being the hardest worker in the room which brings you one step closer to making your dreams a reality.

7. They make family life a priority.

A rich person knows best what money can and cannot buy. That’s why they give so much value to the family time, something which they consider priceless. They realize whereas money can always be made, there’s a limited amount of time they can spend with their families. That’s why they make it a priority.

8. They respect their time and spend it wisely.

In a world full of distractions, it’s easy to lose track of your time. It’s something rich people never let happen. They realize, once wasted, the time is gone forever; that’s why it’s such a precious resource for them.

9. They surround themselves with like-minded people.

“You are the average of the five people you spend the most time with.”

—Jim Rohn

Letting naysayers influence your thoughts, actions and bring you down is out of the question for a wealthy person. To protect themselves from negative people, they make sure their surroundings motivate them to further growth.

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10. They pay attention to their habits.

Your habits form who you become. If you eat junk, practice negative talking and spend your time mindlessly, there’s likely no bright future ahead of you. Wealthy individuals select their habits carefully so that they only practice ones that contribute value to their lives.

11. They learn how the world of finances functions.

Nowadays, the right financial knowledge is the key to survive without getting lost in debt and other financial commitments. Rich people devote time to become the financial experts, so in the end, their money works for them and not vice versa.

To radically improve your personal finances, check out this 14-day plan.

12. They don’t believe in financial luck.

Money is made through hard work combined with creativity, market-research, and other factors, but pure lack is definitely not among the most important ones. That’s why wealthy person avoids lotteries and gambling. They still take financial risks, but they are calculated.

13. They don’t spend more than they earn.

If you make $1,000,000 and you spend the same amount, you are still broke. Poor people tend to spend more than they make which is caused by short-term thinking. Wealthy people can extend the gratification in order to stay financially stable and make the future safe.

14. They don’t watch TV.

Television is a huge time-sucker with almost no value added to your life. It leads to a sedentary lifestyle, obesity and increases your chances of type 2 diabetes. Since rich people eliminate bad habits; they make sure to replace TV with more creative sources of entertainment like books.

15. They don’t give anyone responsibility for their lives.

“We are made wise not by the recollection of our past, but by the responsibility for our future.”

—George Bernard

People who can’t achieve anything significant in their lives tend to avoid the responsibility for their future. There’s always some external factor to blame. On the contrary are achievers, who always take the blame and learn from their mistakes.

16. They don’t follow the flow.

Thinking differently is mandatory. There’s no way to achieve extraordinary results through regular actions and ordinary thinking. Rich people aren’t afraid to dream big and break the rules and dogmas to accomplish something.

17. They don’t miss opportunities.

To ensure they squeeze as much as possible from what life throws at them, rich people put themselves in the right place at the right time. They realize some chances are game-changing experiences.

18. They don’t rely on formal education.

Wealthy individuals are life-long learners. They treat self-growth as a never-ending process and they fully enjoy it. Cultivating the mind is achieved through a broad variety of experiences in contrast to relying completely on the schooling system.

19. They don’t let negative thoughts influence their actions.

Negative thinking is especially dangerous when you decide to believe in the excuses and rationalizations. Your brain wants you to stay in the comfort zone, so it will spare no effort to convince you that you can’t. The key to success is to let these thoughts fade away and replace them with powerful reasons to believe in yourself.

20. They don’t say yes all the time.

Saying no at the right moment is a powerful skill which brings health, wealth and happiness. One the other hand, if you practice saying yes way too often, you are more likely to get off the track and waste your time on unnecessary commitments.

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Rich people know there are plenty of things you don’t need to say yes to.

21. They don’t focus entirely on the money.

Oppose to misconceptions, money isn’t what matters the most one the road to getting rich. Using their capital and influence, wealthy individuals want to change the world for better, contribute to the society and simply experience the life like most people can’t.

Bill Gates is once again the wealthiest person on the planet. But he’s also one of the most generous people. He gives back a lot of his money and he decided to donate the majority of his wealth to philanthropic causes when he dies.

22. They don’t give up.

Getting rich isn’t an overnight process. It takes a lot of time and effort to go through the path full of obstacles and failures to finally meet your goals. The key is to stay persistent, practice self-belief and never give up.

Featured photo credit: Silicon Prairie News via flickr.com

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Oskar Nowik

Oskar is a blogger and the author of "Brightening: The Positive Attitude That Will Change Your Life"

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Last Updated on August 20, 2019

How to Set Financial Goals and Actually Meet Them

How to Set Financial Goals and Actually Meet Them

Finances can push anyone to the point of extreme anxiety and worry. Easier said than done, planning finances is not an egg meant for everyone’s basket. And that’s why most of us are often living pay check to pay check. But did anyone tell you that it is actually not a tough task to meet your financial goals?

In this article, we will explore ways on how to set financial goals and then actually meet them with ease.

5 Steps to Set Financial Goals

Though setting financial goals might seem to be a daunting task but if one has the will and clarity of thought, it is rather easy. Try using these steps:

1. Be Clear About the Objectives

Any goal (let alone financial) without a clear objective is nothing more than a pipe dream. And this couldn’t be more true for financial matters.

It is often said that savings is nothing but deferred consumption. Therefore if you are saving today, then you should be crystal clear about what it is for. It could be anything like kid’s education, retirement, marriage, that dream vacation, fancy car etc.

Once the objective is clear, put a monetary value to that objective and the time frame. The important point at this step of goal setting is to list all the objectives, however small they may be, that you foresee in the future and put a value to it.

2. Keep Them Realistic

It’s good to be an optimistic person but being a pollyanna is not desirable. Similarly, while it might be a good thing to keep your financial goals a bit aggressive, going out of the line will definitely hurt your chances of achieving them.

It’s important that you keep your goals realistic in nature for it will help you stay the course and keep you motivated throughout the journey.

3. Account for Inflation

Ronald Reagan once said – “Inflation is as violent as a mugger, as frightening as an armed robber and as deadly as a hitman”. And this quote sums up the best what inflation could do your financial goals.

Therefore account for inflation whenever you are putting a monetary value to a financial objective that is far away in the future.

For example, if one of your financial goal is your son’s college education, which is 15 years hence, then inflation would increase the monetary burden by more than 50% if inflation is mere 3%. So always account for inflation.

4. Short Term vs Long Term

Just like every calorie is not the same, the approach towards achieving every financial goal will not be the same. It is important to bifurcate goals in short term and long term.

As a rule of thumb, any financial goal, which is due in next 3 years should be termed as short term goal. Any longer duration goals are to be classified as long term goals. This bifurcation of goals into short term vs long term will help in choosing the right investment instrument to achieve them.

More on this later when we talk about how to achieve financial goals.

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5. To Each to His Own

The journey of setting financial goals is an individualistic affair i.e. your goals are your own goals and are determined by your want to achieve them. A lot of times we get on the bandwagon of goal setting only to realize later on that it was not meant for us.

It is important that your goals are actually your goals and not inspired by someone else. Take a hard look at this step at all the goals you’ve set for after this step, you will be on the way to achieve them.

By now, you would be ready with your financial goals, now it’s time to go all out and achieve them.

11 Ways to Achieve Your Financial Goals

Whenever we talk about chasing any financial goal, it is usually a 2 step process –

  • Ensuring healthy savings
  • Making smart investments

You will need to save enough; and invest those savings wisely so that they grow over a period of time to help you achieve goals. So let’s get down to ensuring healthy savings.

Ensuring Healthy Savings

Self realization is the best form of realisation and unless you decide what your current financial position is, you aren’t heading anywhere.

This is the focal point from where you start your journey of achieving financial goals.

1. Track Expenses

The first and the foremost thing to be done is to track your monthly expenses. Use any of the expense tracking mobile apps to record your expenses. Once you start doing it diligently, you would be surprised to see how small expenses add up to a sizeable amount.

Also categorize those expenses into different bucket so that you know which bucket is eating the most of your pay check. This record keeping will pave the way for cutting down on un-wanted expenses and pump up your savings rate.

2. Pay Yourself First

Generally, savings come after all the expenses have been taken care of. This is a classical mistake which almost everyone of us do. We pay ourselves last!

Ideally, this should be planned upside down. We should be paying ourselves first and then to the world i.e. we should be taking out the planned saving amount first and then manage all the expenses from the rest.

The best way to actually implement is to put the savings on automatic mode i.e. money flowing automatically into different financial instruments (for example – mutual funds, retirement corpus etc) every month.

Taking the automatic route will make us lose control of our money and hence will compel us to manage in what’s left with us thereby increasing the savings rate.

3. Make a Plan and Vow to Stick with It

Budgeting is the best to get around the uncertainty that financial plans always pose. Decide in advance how spending has to be made.

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Nowadays, several money management apps and wallets can help you do this automatically. It’s easy and who knows, you may just end up doing what people fail to do.

At first, you may not be able to stick to your plans completely but don’t let that become a reason why you stop budgeting entirely.

Make use of technology solutions you like. Explore options and alternatives that let you make use of the available wallet options and choose the one that suits you the most. In time, you will get accustomed to making use of these solutions.

You will find that they make it simpler for you to follow your plan, which would have been difficult otherwise.

4. Rise Again Even If You Fall

Let’s be realistic. It’s not like the world will come to an end if you made one mistake. This isn’t called leniency but discipline.

If you fail to meet your budget for a month, don’t give up the entire effort just like that. Instead, start again.

Remember that flexible plans are the most realistic plans. So go forward and try to follow your financial goals as planned but if for some reason, the plan gets out of hand for you, do not give up on it just yet. This has a lot to do with your psychology rather than any material commitment.

All you have to do is to stay on the road and vow to stay on it, no matter how much you fall down.

5. Make Savings a Habit and Not a Goal

In the book Nudge, authors Richard Thaler and Cass Sunstein advocate that in order to achieve any goal, it should be broken down into habits since habits are more intuitive for people to adapt to.

Make Savings a habit rather than a goal. While it might seem to be counter intuitive to many but there are some deft ways of doing it. For example:

Always eat out (if at all) during weekdays rather than weekends. Usually weekends are expensive. Make it a habit and you would in turn be saving a great deal.

If you are travelling buff, try to travel during off season. Your outlay will be much less.

If you go out for shopping, always look out for coupons and see where can you get the best deal.

So the key point is to imbibe the action that results in savings rather than on the savings itself, which is the outcome. Focusing on the outcome will bring out the feeling of sacrifice which will be harder to sustain over a period of time.

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6. Talk About It

Sticking to the saving schedule (to achieve financial goals) is not an easy journey. There will be many distractions from those who are not aligned with your mission. And it would be rather easy to lose the grip over your discipline.

Therefore in order to stay the course, it is advisable that you keep yourself surrounded with people who are also on the same bandwagon. Daily discussions with them will keep you motivated to move forward.

7. Maintain a Journal

For some people, writing helps a great deal in making sure that they achieve what they plan.

So if you are one of them, maintain a proper journal, where you write down your goals and also jot down the extent to which you managed to meet them. This will help you in reviewing how far you have come and which goals you have met.

Use this journal to write down all essential points such as your short term, mid term and long term goals, your current sources of income, your regular expenses which you are aware of and any committed expenses which are of recurring nature.

When you have a written commitment on paper, you are going to feel more energised to follow the plan and stick to it. Moreover, it is going to be a lot more easier for you to follow you and track your progress.

At this point, you should be ready with your financial goals and would be doing brilliantly with savings; now it’s time to talk about the big daddy – Investments.

Making Smart Investments

Savings by themselves don’t take anyone too far. However savings when invested wisely can do wonders and we are at that stage where we will talk about making smart investments.

8. Consult a Financial Advisor

Investments doesn’t come naturally to most of us therefore rather than dabbling with it ourselves, it is wise to consult a financial advisor.

Talk to him/her about your financial goals and savings and then seek advice for the best investment instruments to achieve your goals.

9. Choose Your Investment Instrument Wisely

Though your financial advisor will suggest the best investment instruments, it doesn’t hurt to know a bit about them.

Just like “no one is born a criminal”, no investment instrument is bad or good. It is the application of that instrument that makes all the difference.

Do you remember we talked about bifurcating financial goals in short term and long term?

It is here where that classification will help.

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So as a general rule, for all your short term financial goals, choose an investment instrument that has debt nature for example fixed deposits, debt mutual funds etc. The reason for going for debt instruments is that chances of capital loss is less as compared to equity instruments.

10. Compounding Is the Eighth Wonder

Einstein once remarked about compounding,

Compound Interest is the eighth wonder of the world. He who understands it, earns it… He who doesn’t… Pays it.

So make friends with this wonder kid. And sooner you become friends with it, quicker you will reach closer to your financial goals.

Start investing early so that time is on your side to help you bear the fruits of compounding.

11. Measure, Measure, Measure

All of us do good when it comes to earning more per month but fail miserably when it comes to measuring the investments; taking stock of how our investments are doing.

If there is one single step where everything (so far) can go wrong, it is at this step – Measuring the Progress.

If we don’t measure the progress timely, then we would be shooting in the dark. We wouldn’t know if our saving rate is appropriate or not; whether financial advisor is doing a decent job; whether we are moving closer to our target or not.

Do measure everything. If you can’t measure it all yourself, ask your financial advisor to do it for you. But do it!

The Bottom Line

This completes the list of tips for you to set financial goals and actually achieve them with not so great difficulty.

As you can see, all it requires is discipline. But guess that’s the most difficult part!

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Featured photo credit: rawpixel via unsplash.com

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