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The 10 top habits of millionaires, how to transform your thinking and create wealth
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What you do to think and thus become a millionaire
Being rich is not enough, neither is it enough to earn a lot of money. Being rich is a state of mind, especially if you want to continue being rich. In his book Keith Cameron Smith lays out what he believes are the top 10 habits of millionaires (Piatkus: London, 2007). Here, I will give you a quick summary of some of his ideas. I would really appreciate feedback if you think these habits are useful or if you do indeed put them into practice.
1. Thinking long-term. Cameron talks about how important it is to have a long-term plan, not only for your finances but for life in general. Health, relationships, friendships, they all can benefit from a longer approach. This will allow you to develop delayed gratification. If you are going to be together for the next three years, you don't need to go to all those vacations this year.You can save more money, invest it more wisely. Similarly, if you delay giving everything you think you'd like by buying it on your credit card, you have time to actually ponder the buying decision. The goal is ultimately, freedom, not comfort. Just remember, when you start bringing in more money, do not spend it but invest it.
2. Talk about ideas. He insists that we don't spend our time talking about other people or things, instead, we should learn to discuss ideas, for ideas are what allows us to make money. This he points out is why the working and the middle classes are trapped by their interest in the gossip magazines and tabloids. They have no time for ideas, wealth creation because they are too busy being interested and discussing people and things. Ideas make things happen. Always, choose fortune over fame. Do not be impressed with superficial things. Stop criticising others, compliment and learn from them instead.
3. Embrace change. Change is opportunity so do not be afraid of it. Embrace it, see if for the openings it can provide. Do not live in fear, but be confident. Keep learning and growing.
4. Take calculated risks. This is really important. It tells you to get out of the rat race by educating yourself and making long-term plans for your life.
5. Continually learn and grow. This allows you to keep up with what's going on in the world around you. It gives you new ideas, new openings for growth. Do read and build a library of useful books. Invest in learning success. Do not accept free advice but learn from the best. Wisdom comes from the application of knowledge, so do put into practice that which you have learned. Most importantly love life. Do not see life as something that you need to plod through, but something to enjoy and celebrate.
6. Work for profit, not for wages. This is important. Even if you don't think you can sell things, try to get into the sales business, for that is where the money lies. Find a niche and sell stuff for profit.
7. Be generous. If you can be generous with your money, it means you control it and it does not control you. This does not mean throwing your money away. It just means that the act of giving will give you rewards worth more than what you invested into it.
8. Have multiple sources of income. This is critical. You do not need to do everything yourself, but you must find at least another source of income besides that of your 9 to 5 job. It will give you more to invest.
9. Focus on increasing your net worth. Work smarter, not harder. Remember, net worth is your assets minus liabilities. A real asset earns passive income. Apply this knowledge now. Remember, you must make your money work for you, not work for your money. Some ways to have passive income is to
a) start a small business
b) invest in real estate
c) invest in stocks
10. Ask yourself empowering questions. This is important for it allows you to look at your life and make the right choices and decisions for you. Discover who you really are and want you really want to be. Do not let the thinking that what you have defines you - what you want to be, that is what defines you.