5 Boring Habits That Made Me Rich

5 Boring Habits That Build Real Wealth (0:00)

Brian: As a financial advisor, I’ve had an inside peek at the finances of a lot of wealthy people. And one thing I’ve seen is that most of them share a handful of habits that they’ve practiced consistently over a long period of time. Today, I want to share those habits with you because they’re the same five boring habits that made me wealthy and completely changed my financial life.

Habit #1: Live on Less Than You Make (0:21)

Brian: The first boring habit is what I call the leg day of personal finance, because everyone knows they should do it, but let’s be honest, no one really wants to. And that habit is living on less than you make. It’s the concept of deferred gratification – the willingness to give up something today in exchange for something far better down the road. And that can be difficult because our brains are wired to want the reward right now. It’s my money and I need it now. Meanwhile, there’s a whole industry trying to exploit that instinct – literally a trillion-dollar industry. Instagram ads, TikTok influencers, and buy now pay later companies are all trying to get you to spend money, whether you have it or not.

Brian: But if you want to build wealth, you need to have financial margin for savings and investing. And you only have that margin if you’re spending less than you make. Our clients here at Abound Wealth understand this concept. When we asked about their spending and saving habits, 60% of them said they paid cash for their last vehicle. That shows me that they’re not buying more car than they can afford. And around 42% of them are saving 25% or more of their gross income. The only way you can do that is by living on less than you make.

Habit #2: Learn to Say No (1:37)

Brian: The second boring habit sounds so simple, but the data shows us it’s something many Americans struggle with, and that is saying no. I’ve learned over the years that building wealth is not just what you do with your money. It’s also what you don’t do. And not just with big purchases, but with the small stuff that adds up quietly in the background. Things like food delivery fees, subscription fees, and even dining out. None of those things are catastrophic on their own, but collectively they can easily consume hundreds of dollars a month that could have been invested.

Brian: And this applies to the bigger decisions, too – things like turning down a vacation you truly can’t afford right now or passing on a car upgrade when your current vehicle is perfectly fine. The people who learn to say no consistently are the ones who can eventually say yes to the bigger things that matter.

Habit #3: Stop Trying to Look Rich (2:27)

Brian: The next habit that separates people who are actually wealthy from those who are just trying to look rich is not trying to look the part. I actually bought a Rolex a long time ago once I’d reached a certain level of success that allowed me to afford it. But I’ve only worn it a few times because I realized I’m not really a watch guy. It didn’t count my steps. It didn’t tell me what the weather was. And I didn’t know what time the sun was going to set. And it’s the same with cars. I’ve owned nice vehicles, but I’m not out here driving a Lambo. Not because I couldn’t afford it, but because I understand the math. Every dollar that goes toward appearances is a dollar that doesn’t go toward compounding in my investment account. And over 20 or 30 years, that math can be brutal.

Brian: A lot of millionaires don’t look like millionaires. Thomas Stanley describes this in his book The Millionaire Next Door – the idea that real wealth is quiet and that people who actually have it more often than not don’t look like it from the outside. And we see this with our wealthy clients. 84% of them drive their cars for seven years or more. 68.6% of them attended a public university compared to just 21% who went to a private school. And 76.4% of them made their first million through saving and investing – not by founding a tech company, being a senior executive, or being some kind of virtuoso. Just consistently saving and investing over time because they would rather be wealthy than look wealthy.

Habit #4: Protect Yourself From Financial Disasters (3:55)

Brian: The next habit is one of the most important and unfortunately one of the most overlooked, and that is protecting yourself from the scary stuff. Building wealth takes years of consistent effort, and the last thing you want is for one bad event to unravel all of it. Now, there are two pieces to this. The first is having appropriate insurance coverage. Home insurance and car insurance are likely required by your state or lender, and they’re no-brainers to carry. Health insurance is a must, and so is life insurance if someone depends on your income. Disability insurance could be a good idea if a disability would make it difficult for you to earn a living, and an umbrella policy is something to consider as your wealth grows. Now, I know insurance premiums can feel like money going out the door for absolutely nothing. But if something ever happens and you don’t have the right coverage in place, the amount you could end up owing can make those premiums look very trivial.

Brian: The second piece is your emergency fund. 93.5% of our wealthy clients have at least three to six months of cash reserves. Close to 94%. And having that buffer changes everything about how you navigate financial setbacks. A job loss doesn’t force you into high-interest debt. A major car repair doesn’t derail your investment contributions. You can absorb the disruption and keep moving forward without setting your long-term plan back by literally years. Protecting yourself and your family with the proper insurance and cash reserves is truly one of the most important habits on this list.

Habit #5: Track Your Net Worth Every Year (5:33)

Brian: The next habit is boring for a lot of people, but a lot of you Financial Mutants will actually find this pretty exciting, and that is doing an annual net worth statement. Early in your financial journey, you might be budgeting and tracking every expense, and there’s a place for that. For a season, that level of detail might be exactly what you need. But over time, what matters more than tracking individual transactions is understanding whether your overall financial picture is moving in the right direction. And the best tool we’ve found for that is a simple annual net worth statement.

Brian: Calculating your net worth is pretty straightforward. You list everything you own, subtract out everything you owe, and the difference is your net worth. What you’re looking for year-over-year is progress. Are your assets growing? Is your debt shrinking? Is your net worth headed in the right direction? If you’ve never done a net worth statement before, check out our net worth tool. This is what Bo and I both use to do our net worth statements every year. Make it an annual habit and you’ll be amazed at how motivating it is to watch these numbers grow.

Bonus Habit: Always Be Buying (6:43)

Brian: I said five habits, but there’s one more that ties everything together: always be buying. I can’t stress enough how important it is to be consistently investing every month, whether the market’s going up or whether the market’s going down, even when the headlines are scary and everyone seems to be panicking. The discipline of investing consistently through all of this is one of the most valuable financial skills you can develop.

Brian: I’ve watched a lot of people try to time the market over the years, and the research is pretty clear on how that tends to go. If you missed out on the five best trading days from 1988 to 2023, you would have missed out on 37% of those gains. The best 10 days, 54%. The best 30 days, you’ve lost 83% of the return. And the best 50 days, you could have missed out on 92% of those gains. Bottom line: time in the market is much better than timing the market.

Brian: The investors who build the most wealth are the ones who stayed invested through every downturn and kept their contributions coming. And this is a habit you can actually automate. Set up your 401(k) contributions, your Roth IRA contributions, and your brokerage deposits to happen without you even having to think about it. I can tell you from my own experience and from years of working with clients who have built extraordinary wealth that the path to financial independence is not complicated. But it does require discipline, including the willingness to practice some boring habits. These are habits, not an actual plan. If you want to learn how to build a financial plan specifically by age, check out the video linked here. And as always, keep building towards your great big beautiful tomorrow.