Do You Have These 5 Wealth Building Habits?

When we talk about the wealthy we may conjure images of lavish vehicles, huge mansions, lakes homes with speed boats, and other life-easing luxuries!

But in all reality, the wealthy must make the same everyday decisions that everyone else does. The difference is their attitudes and behaviors toward their spending decisions.

Wealthy People Set Goals

Goal setting must be your priority to becoming wealthy. Writing your goals down and internalizing them daily will create a positive shift in your decision-making process.

“Life takes on meaning when you become motivated, set goals and charge after them in an unstoppable manner.” -Les Brown

The Wealthy Budget Diligently

Millionaires tend to look at their personal budget as a business, and for fellow business owners this should be common sense. Every business uses something referred to as a cash flow statement. This determines the inflows of cash and outflow of expenses. The goal is to be in the green!

Personal budgeting should be thought of in the same manner. Understand your after-tax income, your expenses, and discretionary income left over after all bills are paid. The difference between a millionaire’s mindset and those who are not wealthy is how their discretionary income is saved/invested vs. spent.

Individuals who amass wealth not only have a positive cash flow, but understand how to most efficiently position their excess cash for optimal success.

This takes:

1. Understanding your total discretionary income.

2. Committing yourself to not overspending your allotted amount in each budget category.

3. Planning your discretionary income to most efficiently achieve your life goals. Often a well trusted Financial Planner can help with this step.

5 Important Behaviors

Always Ask for Discounts and Use Coupons. The next time you get your oil changed, get a repair, or have another service done. Ask for your discount!

Even if you say something cheesy like, "I don't see my 'John' discount on here," will get the point across. Keep in mind you want to be welcoming and friendly.

You may experience some type of anxiety when doing this, but this is natural. Every human being wants to have a positive interaction with another fellow human being, and we think that asking for a discount would result negatively. Although, the worst case scenario is they say no, and you continue on with your day.

Keep in mind a smart business wants return customers and discounts/promotions are often the incentive to get repeat customers!

Plan All Expenses. The wealthy are diligent about planning every specific cost.

This includes things like:

● The obvious fixed expenses (Mortgage, utilities, insurance etc).

● Making a grocery lists that will be sure cover all meals needed for that time period (for example: breakfast, lunch, and dinners for next 7 days)

● Saving for unexpected expenses (car maintenance fund, little Jimmy's sports fund, etc.)

● Planning gifts for birthdays/important occasions

● Pre-planning times that they will be going out to eat and amount to be spent.

The list goes on and on, but the important concept to understand is wealthy individuals become that way by always rationalizing the effect of their purchases and behaviors on their long-term goals.

After enough practice this rationalizing behavior becomes subconscious, and you see the trade-off of your spending more clearly.

Buy Used Cars and Appreciating Assets. Avoiding depreciating assets is important for building wealth.

Buying a new car has its perks (mainly the service/warranty plan), but a new car can depreciate as much as 20% in 12 months! Source: Car Depreciation: How Much Value Will a New Car Lose? Keep in mind the wealthy believe in purchasing assets that will increase in value.

Some examples of appreciating assets are antique cars, antique furniture, paintings/art, collectibles, stocks, bonds, real estate, partnerships (limited or general), and the list goes on.

Avoid "Bad" Debt. Debt is costly if used incorrectly. I'm not going to write that the wealthy have never utilized debt. Often time things like SBA (small business loans) are how entrepreneurs can get started.

The important thing is to understand how to use debt correctly and if you don't understand it, stay away.

Most commonly you will hear the easiest answer is to live completely debt-free. The reason for this, most believe, is the clearness and awareness it provides your brain.

If you have a constant worry hanging over your head, it may force you into making rash decisions without noticing or having the time to rationalize the long-term effects.

Give Back. To sum up, the reason that millionaires are successful is most of them have the drive to help the world and understand the more they make the more they can give back!

Become Who You Are Meant To Be

If you want to want to improve the world around you and make a difference it starts with your habits! There are thousands of apps to help with this.

Mint is a very popular app that will pull together all your accounts.

You can also find many budget sheets online if that is more your style.

I’m old school and use an excel spreadsheet that shows all my bills and income as well as categorizes all expenses.

Start Now!

Become conscious of your current habits and compare them to those of the wealthy.

Adjust as you see fit, and as much as you can endure. It will take time and a degree of sacrifice, but you will not regret it!

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The views depicted in this material are for information purposes only and are not necessarily those of Cetera Investment Services LLC. They should not be considered specific advice or recommendations for any individual. All investing involves risk, including the possible loss of principal. There is no assurance that any investment strategy will be successful.

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