It’s not hard to become rich, especially if you were lucky enough to be born in in the United States.
Anyone can do it. You just need an investment plan and start investing early. That’s it. There’s no secret formula that only the rich know about.
You’ve heard people say this many times before. But, it’s the truth.
I recently read an article posted on Business Insider titled I interviewed over 200 millionaires, and about half of them followed the same straightforward path to wealth.
I don’t usually copy the content posted from other websites, but since this information is so valuable, and since I’ve already sighted the source and I’m giving the author credit, why not?
Here some of the main points.
Rich people have rich people habits
The article goes on further to say:
Forty-nine percent of the millionaires highlighted in my various Rich Habits Study books got rich the same way: They followed what I’ve named the Saver-Investor Path.
Rich people are sometimes ordinary Joes
These Saver-Investors were ordinary people who did not have any special advantages in life:
- They didn’t grow up rich
- They did not earn high salaries
- They did not possess any unique or advanced set of skills
- They did not have any special knowledge
- They did not have advanced degrees or graduate from elite universities
- They did not inherit money from their parents, grandparents, relatives or others
- They did not own fancy things — their home, cars, clothes, and possessions were modest
The reason they did not seem wealthy is because they lived very modest lives. Their homes were ordinary. Cars: ordinary. Clothes, jewelry, furniture: ordinary. They sent their children to public schools. They were not members of country clubs, golf clubs, or even swim clubs. They did not go out to fancy restaurants, take exotic vacations, or collect art.
Saver-Investors do not advertise their wealth. You would never know they were rich by looking at them. They are your neighbors, family, friends, colleagues at work, assistant coaches, teachers, union workers, plumbers, electricians, construction workers, Accountants, government workers … the list goes on.
Everything about their lives screams, “I am not rich!“
Follow this guaranteed path to wealth
- You have to be saving consistently. The savings component requires living below your means and consistently saving 20% or more of your net, take-home pay.
- You must invest your savings. The investing part means consistently investing what you save and doing so prudently. The prudent part involves doing your homework for each investment and then continuously monitoring your investments — but largely leaving them alone to let them grow. The Saver-Investors in my study invested in three places: retirement plans (401(k) plans, 403b plans, 457 plans, IRAs), equities (stocks, bonds, mutual funds), and real estate (rentals, triple net leases, REITs).
- You have to give it time. It took the Saver-Investors in my Rich Habits Study about 32 years to accumulate an average of $3.3 million.
Live below your means
The key to pursuing the Saver-Investor path is living below your means. But in order to live below your means, you must create a standard of living in which your living costs are 80% or less than your net, take- home pay. This means making sacrifices. It might also mean working a second job or having a side business.
But ultimately, the Saver-Investor path is available to almost everyone.
Written by Thomas C. Corley, CPA, CFP, is the author of ” Rich Habits: The Daily Success Habits of Wealthy Individuals,” and “Rich Kids: How To Raise Our Kids To Be Happy And Successful In Life.”