What separates millionaires from the middle-class?
Well, come to find out, it’s not just their income and net worth.
Millionaires have different habits and tend to do things differently than the middle-class and lower-income individuals.
Here are 15 things that millionaires do differently
- Millionaires are frugal
Millionaires are generally good with money. They don’t pay full-price on purchases and they stick to a budget.
The key to frugality is fairly simple. Spend less than you earn. This way you always have something to put away for a rainy day or to invest in your retirement account.
2. Millionaires keep their housing costs low
Millionaires don’t overspend on housing. They follow the rule of never spending more than 2.5 times your annual income on housing. They live in a home they can easily afford.
Even Warren Buffett follows this rule and still lives in the same modest home he purchased in 1958 for $31,500. In 2017, it was worth an estimated $652,619.
3. Millionaires save a lot of their income
They make a habit of saving a portion of every dollar they earn. Even though they may have an income more than the average person, they also have a higher savings rate.
A habit of savings money bodes well in life, giving you the ability to have money that can later be invested, which will allow your money to make more money.
4. Millionaires take on a side hustle
Millionaires like to have multiple income streams. They don’t like to have only one source of income. Many self-made millionaires credit developing a side hustle as one of the primary vehicles they used to grow their net worth.
5. Millionaires invest in real estate
Most millionaires obtained their wealth by investing in real estate, not the stock market.
6. Millionaires invest in low-cost index funds
When millionaires invest in the stock market, they like to diversify instead of purchasing select stocks. In fact, their investment strategy is rather simple. They invest in low-cost index funds.
Even billionaire Warren Buffett likes low-cost investing, often recommending Vanguard’s S&P 500 index fund for the average investor. He previously called index funds “the most sensible equity investment.”
7. Millionaires spend more time researching investments
Millionaires spend more time – an average of 10.5 hours a month – planning for investment. The extra study and research are a big reason why millionaires have high financial literacy.
8. Millionaires spend more time focusing on personal growth
Millionaires spend a lot of time and money on personal growth. They read more than the average person.
Thomas C. Corley, the author of Change Your Habits, Change Your Life, spent five years researching the daily habits of 177 self-made millionaires and found they devoted at least 30 minutes every day to exercising and reading.
From his research, he learned that millionaires tend to read three types of books: biographies of successful people, self-help or personal development, and history.
9. Millionaires wake up earlier than others
Millionaires are early risers in the morning. While most people are still sleeping or pressing the snooze button, millionaires are up tackling the day
10. Millionaires are thinkers
Millionaires spend a least 15 minutes (most spend more) each day thinking. They understand the value of ideas and thoughts.
Billionaires like Mark Zuckerberg understands the value of having time to think so much that he wears the same t-shirt every day. He does this because he doesn’t want to waste energy figuring out what to wear when his thoughts can be on more important things.
11. Millionaires don’t follow the crowd
It’s pretty obvious that millionaires don’t follow the crowd. Otherwise, they probably wouldn’t be millionaires.
12. Millionaires ask for constructive feedback
Millionaires don’t mind constructive criticism. They understand that feedback is essential to learning what is working and what isn’t working.
13. Millionaires are resilient
Millionaires don’t give up easily; they are resilient. They identify a goal and stick with it until they get what they set out to accomplish. The only time they may change course is if they find out from feedback that something isn’t working or they discover another way to something better.
14. Millionaires are consistent
Millionaire’s behavior is pretty consistent. Their habits are well-formed. They are consistent at saving, investing, reading, exercising – things that generally lead to a more abundant life.
15. Millionaires are conscientious
Without millionaires, there would be very little money available for philanthropy. Face it, most people don’t have millions of dollars to donate or give away.
Studies have shown that once you reach a certain level of wealth, earning extra money won’t increase your overall happiness or quality of life. Therefore, instead of just adding to their wealth, many millionaires look for a cause or something to donate their money to.