Yahoo Finance Step into the shoes of a millionaire: 6 simple habits of wealthy Americans you can follow
If you want to become a millionaire, you might as well start by listening to the advice of one — someone, in fact, who makes a living teaching others how to get rich.
Personal finance whiz Dave Ramsey has made a living both as a real estate investor and a radio personality who shares his wealth-building knowledge with tuned-in listeners. Hit up his Ramsey Solutions website and you’ll find copious counsel on a variety of financial topics. A common theme among the articles available are ones that spell out the habits of the wealthy and how they built their fortunes.
Don't miss
Commercial real estate has beaten the stock market for 25 years — but only the super rich could buy in. Here's how even ordinary investors can become the landlord of Walmart, Whole Foods or Kroger
Cost-of-living in America is still out of control — use these 3 'real assets' to protect your wealth today, no matter what the US Fed does or says
These 5 magic money moves will boost you up America's net worth ladder in 2024 — and you can complete each step within minutes. Here's how
Assuming you want to join the seven-digit club or take your wealth even further, we’ve collected seven simple habits you can start to hone today. No, buying lottery tickets is not one of them (more on gambling in a bit). But you might be surprised just how easy-peasy these rituals are to grasp. Adopting them may be another story, as habits take time to form. But if you start with a can-do spirit, here’s hoping actions and actual wealth will follow.
They invest for the long haul
It’s been documented time and again that investing can open the door to wealth for everyday Americans. Someone who invested $1,000 in the S&P 500 20 years ago would now have over $6,850, assuming all dividends were reinvested, according to the Official Data Foundation. The easiest way to replicate this type of success is through index funds, which track exchanges and have very low fees. It can be easy to get caught up in the hype of a particular stock, however, index funds have a proven track record of success over long periods of time.
They’re life learners
After a self-styled, five-year study on wealthy and poor people, Tom Corley, CPA, released a book titled "Rich Habits: The Daily Success Habits of Wealthy Individuals." His research showed, for example, that more than three in five wealthy people (63%) listened to audiobooks while commuting to work versus 5% of poor people. In addition, they're voracious readers. Ramsey Solutions concurs, millionaires have a desire to learn and tend to read books on leadership or biographies of successful people.
They sign up for employer-sponsored retirement plans
The Ramsey Solutions National Study of Millionaires, which included 10,000 participants, found that 8 of 10 millionaires invested in their company’s 401(k) plan. These programs becomes especially advantageous when the business offers to match contributions, which equates to free money once a certain investment threshold is hit. For example, a 4% contribution from your paycheck would result in your employer pitching in an additional 4%
Read more: Car insurance rates have spiked in the US to a stunning $2,150/year — but you can be smarter than that. Here's how you can save yourself as much as $820 annually in minutes (it's 100% free)
They avoid gambling
Many a millionaire knows that, in gambling, the odds are stacked against the player. A 2013 study from the University at Buffalo’s Research Institute on Addictions (RIA) found that the poorer the neighborhood, the higher the risk for problem gambling. John W. Welte, an RIA senior research scientist involved in the study, suggested that perhaps poorer people "do not see many role models of financial success achieved through conventional means.” Gambling includes the purchase of lottery tickets, which Ramsey has previously denounced as "poor people stuff.”
They wipe out high-interest credit card debt
Ramsey is among the many financial pundits who abhors this roadblock to wealth. In 2022, 46% of American households held credit card debt and by late 2023 the average household was paying $126 per month in interest alone, according to the Federal Reserve Bank of St. Louis. A year’s worth of interest — just a bit more than $1,500 — could easily be invested in a wealth-generating vehicle such as an index fund or 401(k).
They’re thrifty and avoid frivolous trappings
Billionaire Warren Buffett could live anywhere he wants. But the legendary investor — worth $127.9 billion as of July 3, per Forbes — has never left Omaha. He still lives in the home he bought in 1958 for $31,500 (around $342,000 in today's money). Late billionaire Charles Feeney — who Buffett described as his "hero” — was also known for being frugal. He flew coach, wore a $15 watch and used plastic bags in place of a briefcase. Ramsey Solution notes that many wealthy people avoid buying luxury cars, instead opting for reliable, long-lasting vehicles.
What to read next
Rich young Americans have lost confidence in the stock market — and are betting on these assets instead. Get in now for strong long-term tailwinds
Thanks to Jeff Bezos, you can now use $100 to cash in on prime real estate
Stop crushing your retirement dreams with wealth-killing costs and headaches — here are 10 'must-haves' when choosing a trading platform (and 1 option that has them all)
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
