15 Secrets of the Rich: How to Apply Them to Your Life. You have to check out these 15 surprising secrets that wealthy, successful people know. #5 might surprise you.
You hit the jackpot! You win millions and millions and millions. You’re ecstatic. You never have to worry about money again. You can live the life you want. Take a moment and imagine the joy.
But here’s the bad news. If you’re like 70% of lottery winners, you’re going to end up broke within a few years. Yep, 70%.
It’s just like those athletes who make millions and end up broke after retiring. Because money isn’t the solution to poverty.
It’s mindset that are keeping people down.
As Fitzgerald once (supposedly) said to Hemingway: “You know, the rich are different from you and me.” But that doesn’t mean it has to stay that way.
Table of contents
- Secrets of the Rich
- What Surprised You?
~~~~~This post contains some affiliate links for your convenience (which means if you make a purchase after clicking a link I will earn a small commission which helps keep my blog up and running but it won’t cost you a penny more)! Click here to read my full disclosure policy.~~~~~
Did you know there are 18.6 million people in the United States who are millionaires? Yep, seriously.
They’re just quiet about it. And I bet they have mindset that is different than the average person whose net worth is under $50,000.
Napoleon Hill (back in 1937) wrote a bestseller. The Think and Grown Rich secret? “Anything the human mind can believe, the human mind can achieve.”
Anything that over 18 million over people have done, we can do. And it all starts with mindset.
Note this an article about personal finance mindset. Not mindset on running a business or being an entrepreneur.
Secrets of the Rich
Read nonfiction. Yes, seriously.
This is one of the major secrets of the rich.
Millionaires read nonfiction. Books on business, economics, and biographies of successful people throughout history. You don’t have to give up your fiction habit (I know I’m not!), but make an effort to incorporate nonfiction.
If you don’t read at all, start. You don’t have to pay anything- embrace your local library. I pay for Scribd. It’s only $8.99 a month and I get unlimited reading and unlimited audiobooks.
I just finished The Slight Edge and he continually used the example that reading just 10 pages a day would make you an expert in just a few years.
Spend what is left after savings
Warren Buffet’s entire philosophy of money can be summed up with: “Don’t save what is left after spending; spend what is left after saving.” And with today’s technology, it’s something you can embrace.
Today- not tomorrow, not next week- set up an automatic withdrawal from your paycheck to your retirement fund. Have it taken out before you even see it. Right now, we dedicate 12% of our income (we would do more but husband is military and we know he’s getting retirement pay on top of our savings). It comes out of our paycheck before we even see it. The habit of spending AFTER saving is fundamental to building wealth.
You don’t have to start with 12%. Start with 1%. Go a couple of months on the slight reduced income. Up it to 2%. Keep it up. Trust me, you can do this!
Invest early. Compounding is practically magic. The earlier you start, the easier it is to build wealth. But no matter how old you are, starting today is better than tomorrow. And much better than next year. Passive investments are the secret to long-term wealth. No matter how hard you work, there is a limit on how much you can make via active work (paychecks). But as you invest more and more in passive income streams, it compounds and grows.
But invest in things you understand. If you don’t understand anything, invest in index funds. But we already discussed reading non-fiction. If you don’t understand anything about investing, some good investment books might be a good place to start.
Set goals regularly and strive to achieve them. Inaction and complacency are your enemy. Plan out your path to success. I have a fabulous free printable goal-setting workbook if you need help.
Learn something new everyday. Or at least every week.
Ideally something related to your career that can translate into increased earning potential in the future. This is more important than ever with the constantly growing technology.
Or something about personal development or finances. Both are information that will contribute to an upward trend in your life.
Save your raises
Save your raises. Instead of using all that extra money for things that you’re currently living without right now, send that straight to your investments. After all, you’re living on a certain amount of money right now and not starving. You don’t NEED that raise. So why not save it and just pretend you’re still making the same amount?
It doesn’t matter if it’s an unexpected inheritance, a bonus, stimulus checks, or a tax return.
Use windfalls wisely.
If you have debt, pay off debt. Build up your emergency fund. (If you don’t know which to tackle first, I have a post “Emergency Fund or Pay Off Debt?” you might find helpful.
Hopefully you’re not in debt and your emergency fund is well funded. In that case, put it towards your mortgage. Or in retirement.
Avoid debt. Avoid it like the plague.
Money spent on interest is a complete waste. You should be loaning out money, MAKING more. Not spending extra to use money that you don’t have.
If you’re spending more than you’re making (which is the only way you should end up with debt) on a regular basis, you’re going to end up bankrupt. Or in extreme poverty.
Invest…not just money
Invest in yourself.
Invest in education. Formal education. Or books in your career field. Or time working with a mentor.
Invest in your health (medical care is expensive!). Plus people are much more productive when they’re healthy.
Surround yourself with success
Surround yourself with intelligent, successful people- people who are working, striving, and achieving.
Find a way forward
Always look for a way forward in your job. I don’t care if you’re starting as a waitress. I was one- at Pizza Hut and Applebees. My first action was to work hard. My second was to move up the ladder- supervisors make more. The expo (Don’t ask. If you’re not in the food service industry, it wouldn’t make sense) made more. So I learned what I needed to become expo.
What do you need to do at your job to become a supervisor? Then assistant manager? Then manager?
In Think and Grow Rich, the author shares the story about a man who became a partner of Thomas Edison. The man cashed in the last of his money and rode as freight to go work for Edison. At a lowly job. But never lost sight of the fact he was determined to be a partner someday. The man worked hard, looked for opportunities at his job, and advanced.
Embrace fear; shun comfort
Break out of your comfort zone. Because when you live outside your “zone”, you get stronger. You try new things and form new habits. Every day, you’re either going to get better or worse. The choice is up to you.
Take steps in despite of fear. Fear is a natural human reaction. But you have to take steps in spite of it.
Give up on new everything
Hang on to your stuff until you really, really need new.
While the rich will spend money on good quality products (they last longer), they hang onto those items. A good coat and car will last at least a decade. Whereas you’ll probably spend more replacing bad coats and repairing a poor quality car.
Constantly needing a new car, new phone, new whatever is a recipe for long-term poverty. (In case you’re curious, I drive a Mercedes….that I’ve had since 2011. And it looks almost brand new because we take care of it. I love my mini-SUV and still don’t want to trade it.).
Opportunities, not obstacles
Look for opportunities, not obstacles.
Instead of: “I can’t save another dime.”
Try: “How can I save an extra $50 this month? Or EARN an extra $100?”
Instead of: “I can’t possibility turn everything around”
Try: “How can I start with 1% savings, and then expand from there?”
This mindset is vital. Barely anyone succeeds on the first time. I was tempted to say “no one.” But realized that might be a bit drastic.
If you fall off your budget, get back on. If you lose your job, get another. If you make a wrong turn in running your own business, make a turn in a different direction to get back on track.
The only way to guarantee failure is to quit.
What Surprised You?
Did any of the secrets of the rich above surprise you? While I already read non-fiction, I was surprised that so many successful people directly cited it as a reason for their success.
Feel free to comment below with what you found helpful.
Can you do me a favor? If you found this helpful, could you share it with your friends? Share buttons are at the top.