When you’re rich, you can cruise through life at a luxurious speed filled with fancy cars, designer clothes and caviar. But beneath the surface, becoming wealthy and staying wealthy involves hard work, an appetite for risk and a certain mindset that’s not always obvious. Here are some of the secret habits of wealthy people.
1. Bank on Your Street Smarts
“Making money has little to do with logic,” says real estate mogul, author and television star Barbara Corcoran. “It has more to do with trusting your gut.”
In an interview at her Upper East Side Manhattan office, Corcoran reflected on her struggling days in the classroom. “Often I think a prerequisite of making a ton of money is not being smart in school. The cutup in the classroom is often the guy with the big idea who makes a truckload of money.” Despite scoring Ds in high school and college, Corcoran utilized her street smarts and ability to connect with and judge those around her to ultimately grow and sell her Manhattan firm for $66 million in 2001. Today, she is the resident real estate contributor to NBC’s Today show and the sole female investor on ABC’s reality hit Shark Tank, now in its third season.
“You know what’s great about being a dunce in school? You have six-hour days to sit around and think of all kinds of things,” she says. “You get practice at imagination.” In fact, according to Thomas Stanley’s book The Millionaire Mind, when asked how their high school teachers would have evaluated them, only 11 percent of millionaires said “most intellectually gifted” and just 10 percent said “highest grade point average.”
2. Identify and Act on Opportunities
When author Ryan D’Agostino was researching his book Rich Like Them, he knocked on nearly 500 doors to the biggest houses in America’s richest neighborhoods, asking the owners inside: what’s your secret? For one, he discovered, the millionaire mind never stops stirring.
“I spoke with a lot of rich people and one habit that I heard more than once was always keep your eye open for that million dollar idea,” says D’Agostino. “I met a travel agent who was once helicopter skiing in western Canada. He wondered what happens to all the helicopters and lodges in the off-season, and it turned out no one was using them. So he set up this whole luxury travel side business where he would take people out in the summer, fly them up to look at glaciers and mountaintops. He made a ton of money doing it.”
Of course, it’s enough to simply have an idea, D’Agostino continues. “The difference was, he acted on it.”
3. Enjoy Your Money
While saving is a key characteristic of some wealthy Americans as they build and grow their riches, D’Agostino says many millionaires he interviewed had a sort of 50/50 rule when it came to managing windfalls of money. “I met this really interesting guy in Scottsdale, Arizona who ran a successful construction company and he told me that whenever he came into any money he didn’t know he was going to have, even if it was just a few hundred dollars, he would put half away and spend the rest on something fun like a vacation for his kids or something nice for his wife,” he says. “He’d say, ‘what’s the point of obsessing over money all the time and saving and scrimping if you don't get to enjoy it and spend it?’ That was maybe my favorite tip of all.”
4. Prioritize Retirement Savings
While paying for their kids to college is considered important for many wealthy Americans, it’s not their top financial priority, noticed D’Agostino. Instead, it’s having enough for retirement. “Person after person told me, ‘retirement first, education second,’” he said. “There’s no such thing as a loan you can take out for retirement, but it is okay to borrow money to pay for college.”
5. Eliminate Self-Doubt
For Corcoran, despite starting out as a woman in a man’s world and feeling intimidated at times, she attributes her success to the core belief that she’s worth it. “The big enemy out there is not the crowd you compete with or what they’re telling you, but your own self-talk. I had to learn to defeat my own self-talk inside that said, ‘you don’t have the right…don't try it.’” Instead, she learned to say to herself, “I have the right to be there,” and the money followed.
When it comes to building financial success, what do you think are some of the tricks to trade? Send me your thoughts on Twitter @Farnoosh and use #FinFit.