Have you ever wondered how some people become incredibly wealthy?
Well, in this post, I’m going to share with you some habits that I have adopted that are helping me achieve financial freedom earlier than I thought possible.
But don’t worry, this won’t be your typical boring financial advice because we’re going to have some fun with my real-life examples.
Before we get into it, I want to say that it is never too late to adopt these habits to become financially free. Even with a Master’s degree in economics and having worked in financial litigation for many years, I never learned about money management. I got married early and my husband handled our household finances and I never really cared to learn.
But in recent years, I started learning about personal finance and this field fascinated me so much that I decided to start my YouTube channel around it.
Secret #1: Live below your means and create an emergency fund
First off, the most important habit that I have followed for many years is to live below my means. I always try to cut unnecessary expenses and understand the difference between needs and wants.
After creating an emergency fund account in a high-yield savings account that will easily cover 12 months of my family’s expenditure, I started investing my extra savings in various types of assets. I use Ally Bank, but this is another post where you can see other high-yield savings account options. High-yield savings accounts give more interest rates than traditional banks.
What I do is I follow something called paying yourself first. So as soon as I get my paycheck, I put 20% of it directly into my savings account or investment account. You can create an automatic transfer so that 20% is already taken out and it doesn’t go into your checking account where you can spend it.
Secret #2: Start investing as soon as possible
Once you have created enough savings to cover 6-12 months of expenditure, start focusing on growing your wealth.
So yes, you need to prioritize investing your money wisely. This is the easiest way to grow your wealth. Because when we leave our money invested for a long term in something like an ETF OR index fund or real estate, it grows many folds as time passes. If you don’t have the money to invest in real estate, you can start with REITs.
Secret #3: Set clear financial goals and divide them so they are achievable
Now I want to talk about the power of setting clear financial goals. By knowing exactly what you want to achieve, you can focus your efforts and make smarter decisions.
I make a habit of setting my goals every year. I create a list of the important things I really want to achieve. To make it manageable, I focus on only 2 or 3 goals every three months. I find that having too many goals at once can be distracting.
I write down my goals in a place I see every day, like one app that I use is called Asana (it is a productivity app), but you can use whatever tool you like. The key is to take control of your time and find a system that suits you.
Every morning, I check my Asana tasks and ask myself which ones bring me closer to my goals. I prioritize and tackle those tasks first. It might seem odd, but it’s about planning your time around your goals, not just fitting in time to work on them. After handling daily tasks and chores, I focus on connecting my daily activities to my goals. This helps me turn big goals into small, achievable steps each day.
So if you have a job and earn x amount of money yearly, you can calculate how long it will take you to achieve financial freedom where you don’t have to work actively and can enjoy your life, and live comfortably off of passive income.
So if you are still in your 20s, you will probably start by working for a company. Now you have to think about how do you get promoted faster. Will this involve working harder or do you have to learn a new skill to get a promotion fast?
At the same time, you should start thinking about more ways to earn money. You need to think of ways to build passive income, like investment income and through side hustles or starting your own business. Write these somewhere.
When you are young and don’t have family or kids, you have more time to devote to your career.
If you have a particular skill, you can monetize it using YouTube, selling a course online, or using platforms like Etsy to sell digital products. This may take a lot of initial effort but is so worth it
For most self-made wealthy people, there is more than one source of income AND they monetize the skill they are good at.
Secret #4: Manage your money wisely
This is a BIG habit that sets millionaire apart from others, they know how to manage their money wisely. We have to limit unnecessary expenses that we can’t afford yet. So From budgeting to investing, it’s crucial to have a firm grip on your finances. I use an app called Mint which lets me track my expenses in different categories. I know what are the essentials in my life, my needs that I can’t live without, then I have to keep track of how much money I am spending on my different wants and how much I am saving and investing
When we don’t give priority to budgeting and investing, and keep spending money, we tend to suffer later. When we start saving early and invest our money and make regular contributions to it, because of the power of compounding returns, our initial investment becomes so much more in the future years which we can’t even imagine.
I wrote another post on this with examples, so that should give you some idea of why it is crucial to save and invest from an early age to achieve that financial freedom and your dream life.
Secret #5: Surround yourself with like-minded people
Additionally, what I do is I surround myself with like-minded individuals who inspire and motivate me.
So, try and network and meet with like-minded individuals to build relationships. You can find these groups online. Sometimes, we meet people who can help us achieve our dreams fast.
Secret #6: Work hard
Next, I want to talk about the habit of relentless hard work and patience.
Success doesn’t come overnight, and it certainly doesn’t come without putting in the effort.
Many times we feel SOME people just got lucky, but everyone has a long journey and the amount of hard work successful people have to put in is not easily visible to others.
I have degrees from very prestigious universities. When I was still a student in high school, I had a clear vision, that I needed to get good grades to get into a good college. From there, I consistently worked hard because I knew how competitive it was.
I grew up in a middle-class family in India and getting good education was the only way for us to move ahead in life. Both my parents had government jobs and I saw how they prioritized savings over spending.
From the beginning, I had a mindset that if I didn’t work hard, I wouldn’t be successful in my life. In India there are a lot of people and limited jobs, so everything becomes more competitive.
After marriage, I moved to LA where my husband lived and my parents had to take A HUGE loan, so I could study at USC in LA, which is a private institution and has a big tuition cost.
So for me, it was obvious, that I needed to find a good-paying job as soon as I graduated so I could pay off my student loans and earn a comfortable salary that could support me and my husband to fulfill OUR American dream.
To get my first consulting job in LA, I worked hard to get a high GPA in economics (3.9) so I could get an interview opportunity. I was an international student and not many companies wanted to sponsor my visa.
I knew had to stand out. So I put in a lot of hard work to get good grades and applied to different companies to get an internship. Even at my full-time consulting job, I continuously had to learn and improve my skills to stay valuable to the company. I learned programming and I got better at MS Excel, report writing, and presentation skills.
Now with two kids, two YouTube channels, and another full-time job, I still have to work very hard, but at the end of the day, it is very rewarding. We have so much we can achieve, we just have to keep working towards it.
Secret #7: Don’t be afraid of initial setbacks
Also, don’t be scared of initial setbacks, It is very important to be persistent and don’t get discouraged by failure in the beginning.
Even if you do not achieve success first, you will still learn from your efforts. In my case, if some of my videos don’t do well, they still teach me what didn’t resonate with my viewers. Even if I get some hate comments, I don’t give up and instead focus on how to get better at my videos and provide better content to my viewers.
I have faith that If I keep putting in the hard work and I continue to make small improvements in making quality videos, people will ultimately start relating to the message I want to convey. So yes, what I want to say is that even with initial setbacks, there’s learning and your efforts will not get wasted.
It is very important to stay focused on your vision and to believe in yourself. Success often comes to those who keep pushing forward, no matter what challenges they encounter.
There was a time when my kids were young and I had to take a break from my job. But I never left learning and continued to find other opportunities to earn a side income even when I couldn’t get back to full-time job, I started working part-time with my in-laws on their clothing business. Even to date, I work on that. I created an Etsy channel and learned so much about the fashion industry in America and the ethics of business and marketing, which was not part of my background.
Another important habit that makes people rich is when they understand the importance of being proactive and start taking initiative.
Please don’t wait for opportunities to come to you, actively seek them out and make things happen. We are living in the informational technology world and there are so many free resources out there for you to learn and get better at anything you want to.
Now it is only up to you to take advantage of it. Sometimes we spend too much time planning and keep gathering information and don’t take action. You need to change that.
Each one of us has some talent and we need to find that unfair advantage that sets us apart from many other people. and in the current times, it is much easier to make money using your talent where you can provide some unique value to benefit many other people.
Right now I am working on creating an online economics course that will be for high school and college students. It is taking a lot of my time but when you work on your passions, it doesn’t feel like work anymore because you are enjoying it every single minute. So yes please take initiative and don’t wait for the perfect opportunity. It is better to start somewhere and learn along the way. If you keep watching inspirational videos but don’t take action, then there is no gain.
Secret #8: Continous self-improvement and growth
Another habit that’s helped me achieve financial freedom is continuous learning and personal growth.
I have been continuously learning something new, whether it is for my job, for my clothing business, or my YouTube channel.
From my job, I got really good in Excel, basic programming skills in understanding companies’ financials and report writing. This helped me start an economics and personal finance blog which ultimately led to me starting this YouTube channel.
To make videos, I had to learn video editing skills. So Investing in yourself is just as important as investing in your financial portfolio.
While a lot of information is free, sometimes you have to pay a small amount to learn a specific skill. Don’t be afraid to invest in yourself because in the long run, it will pay off.
#Secret #9: Take calculated risks and invest in broad-based funds
And speaking of investments, let’s discuss the habit of taking calculated risks. Most people think that investing in the stock market is a gamble, but actually, if you look at the data throughout history stock market in the form of SP500 has not performed badly over any 16 years. So one easy way to get rich that I follow is to leave my money invested in broad based index funds along with the 401k retirement account. Both me and my husband have our employer-sponsored retirement accounts along with other investments in index funds. The earlier you start the better it is for you.
For investing in the stock market, you can start by investing in a broad-based ETF or index fund. I have a separate post, where I talked about 3 good index funds to invest in, so you can read it for all the information. Index funds and ETFs give you diversification and over the long term they have given an average yearly rate of return of 10%.
Secret #10: Follow the law of attraction
The law of attraction is a powerful principle that states that like attracts like.
When it comes to money, the law of attraction teaches us that our thoughts and beliefs directly influence our financial reality.
By aligning our thoughts with abundance and wealth, we can attract more money into our lives.
Start by visualizing yourself already having the money you desire, and living a life of financial freedom and abundance.
Believe with conviction that you deserve to be wealthy and that money flows easily and effortlessly to you.
Practice gratitude for the money you already have and celebrate even the small financial wins in your life.
To manifest money using the Law of Attraction, it’s also important to take inspired action.
Be open to opportunities, be proactive in seeking financial knowledge, and take steps towards your financial goals.
Avoid dwelling on lack or scarcity, as this will only attract more of it into your life. Instead, focus on abundance, wealth, and financial success, and trust that the universe will provide.
Remember that the Law of Attraction is not a magical solution overnight, but a powerful tool for shifting your mindset and beliefs. Consistency and perseverance are key to truly harnessing the power of the Law of Attraction when it comes to money.
Stay committed to your financial goals, believe in your ability to achieve them, and keep taking steps forward. As you continue to align your thoughts, feelings, and actions with abundance, you’ll start to notice positive shifts in your financial reality.
Recap:
To recap, to become a millionaire, I started living below my means at the start. I prioritize wise investments, educated myself about finance, set clear goals, and built multiple streams of income.
I like to surround myself with successful individuals because as I said your peers influence you. I like to stay disciplined and avoid impulsive buying.
I also understand that success doesn’t come easy and there is a lot of hard work that goes behind it, so work hard, be patient, stay motivated, and take calculated risks and once you achieve that financial freedom don’t forget to give back to the needy who can benefit from your little financial help.
I think you truly feel rich when you give back to society. Remembering to appreciate what you have and helping others along the way is very enriching.
Doing only things that only “serve you” is a bit selfish. I believe if we are capable, we should help others who would benefit from our financial support. If god has blessed us with wealth, we should be grateful and help other hard-working people. I like to do charities and sponsor underprivileged children’s education so they can have a better future. This gives me a purpose and I feel truly happy doing that.
So, these are some habits that have truly made me rich, and I know they can do the same for you!
