Have you ever wondered how self-made millionaires build their fortunes?
While making a million dollars might not be your top priority in life, the stories of self-made millionaires can still be useful in helping you develop solid financial habits to increase your annual net income.
Read on for a list of the top habits of wealthy people. We’ll also dispel some of the most common myths about millionaires and teach you how to build wealth and achieve financial success.
12 habits of self-made millionaires
“Rich Habits” author and certified financial planner Tom Corley interviewed 177 self-made millionaires to discover what they had in common.
Here are a few of the habits he came up with:
- They “dream-set”
Dream-setting means defining your future life by imagining all your dreams coming true and writing down what you come up with.
- They hang out with other successful people
Part of the millionaire lifestyle involves spending time with other people with similar goals, habits, and achievements.
- They have multiple sources of income
Self-made millionaires tend to rely on multiple streams of income — roughly 65% secure at least three sources of income before banking their first million.
- They sleep at least seven hours a night and get up early
Almost all self-made millionaires report sleeping seven or more hours every night, and nearly half wake up at least three hours before their workday begins.
- They exercise
A significant percentage of self-made millionaires do 30 minutes or more of aerobic exercise every day, like running, jogging, walking, or biking.
- They read a lot
Approximately 88% of self-made millionaires spend 30 minutes or more a day reading. What kinds of books do they read? Biographies, self-help books, and history books.
- They have a positive attitude
A positive mental outlook is essential to develop successful habits that help achieve millionaire status.
- They’re persistent
Self-made millionaires aren’t discouraged by failure. At least a quarter of them report having failed at least once in their business before finding success.
- They’re original thinkers
Successful people aren’t afraid of thinking outside the box and not following the herd. Instead, they create their own pack and work on attracting others to their point of view.
- They aren’t afraid of criticism
Receiving feedback — whether positive or negative — is an essential part of success because it gives you the information to reinforce productive behavior and make adjustments if necessary. Self-made millionaires apply this belief to all aspects of their life and don’t shy away from negative feedback.
- They help others succeed
Self-made millionaires don’t see success as a zero-sum game. That’s why they often share their knowledge and expertise to ensure a team of other success-minded people surrounds them.
- They volunteer
Most millionaires volunteer five or more hours for charitable organizations and nonprofits every month.
Most common millionaire myths
With all the speculation about how rich people make their money, some myths are bound to arise.
Here are some of the most common mistakes people make about millionaires:
They inherited their money
This may have been the case a few generations ago, but in recent years, self-made millionaires have been the majority. Only 12% of today’s millionaires inherited 10% or more of their wealth.
Although business success certainly involves some degree of being at the right place at the right time, most millionaires didn’t just fall into their wealth or get a lucky break on a long-shot gamble. Instead, they carefully analyzed risk versus reward and worked hard to capitalize on rare opportunities.
They live in luxury
Despite the popular image of millionaires living in opulence, the truth is most wealthy people save money by living in homes they can afford and driving modest cars.
They’re all men
In fact, men and women make up almost equal proportions of millionaires.
They’re all in tech
While there are plenty of famous tech millionaires (and billionaires), other industries produce as many, if not more, wealthy individuals. Health care, finance, law, accounting, engineering, and applied science are just a few of the sectors in which millionaires make their money.
Self-made millionaires all share the same goal
While all the money habits we’ve discussed so far contribute in significant ways to a millionaire’s success, one common behavior stands out above all the others: saving.
All the self-made millionaires in Corley’s study made a habit of saving 10-20% of their income before making their first million dollars. Comparing that to the average American savings rate of about 8% makes it easy to see how saving money results in accumulated wealth.
Self-made millionaire examples
One of the world's most famous (and richest) self-made millionaires, Warren Buffet started several small business ventures as a teenager. He went on to make his first millions as a stockbroker and investor in the 1950s and 60s.
George Soros left his native Hungary at 17 and worked as a railway porter and waiter to pay for his studies at the London School of Economics. He made most of his early money as a hedge fund manager in New York and famously shorted the British pound in 1992 for a reported profit of $1 billion.
Self-made millionaire women
Corcoran started her brokerage business with a $1,000 loan and grew it into a multi-million-dollar empire that she sold for $66 million in 2001.
Janice Bryant Howroyd
Howroyd started a staffing agency with $1,500 and is now worth an estimated $285 million.
A computer programmer, Faulkner founded a medical-record software company out of her Wisconsin basement in 1979. The company, Epic, is now worth more than $3 billion.
Types of millionaires
In his study, Corley identified three major types of self-made millionaires:
These millionaires make money by first accumulating a wealth of knowledge and skills to become experts in their field.
The big company climber
This type of millionaire accumulates their wealth by spending several decades working their way up the ranks of a publicly held company.
To succeed as entrepreneurs, these millionaires work tirelessly to overcome obstacles and failures before finally making it big.
The best way to become a millionaire
Now that you know how others made their millions, you may be wondering what you can do to apply that knowledge to your own financial life.
Here are three touchstones of the millionaire’s approach to money:
Diversify your investments
Investing your money in different places helps ensure that you aren’t too vulnerable to risk. That way, if one sector or company fails, you can always count on your other investments to carry you through.
If you’re unsure how to efficiently manage your investments, hiring a financial advisor can help you develop a successful strategy.
Have multiple streams of income
Self-made millionaires almost all optimize their time by having multiple sources of income.
These can include their employment salary, income from real estate, and dividends from investments in the stock market.
The most important habit shared by all self-made millionaires is saving a significant portion of their income. You should focus on setting aside 10-20% of your income every month and place it in long-term, safe investments.
Using a bucket system with several different accounts can be a great way to get started.
The bottom line
Making a million dollars is no walk in the park. It takes a bit of luck and a lot of hard work and perseverance. But studying the stories of those who have succeeded in the past is one of the best ways to prepare yourself for the challenges you’ll face when trying to change your life and increase your net worth.
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