Everyone wants to be rich, but not everyone is. Why? Is it because they don’t have a fortune handed down by their parents? There are too many self-made people to say that. Is it because they have unattractive physical attributes, such as looks or brains? But there are plenty of examples of people who have overcome their conditions through hard work. So why haven’t I become rich yet?
John Maxwell, author of The 7 Habits of Highly Successful Millionaires, says, “You can’t change your life until you change your routine. The secret of success is in your routine.” The idea is that there are small habits in rich people’s daily routines that make them rich, so why shouldn’t you do the same? Let’s take a look at the small habits of the rich.
Small habits that make you rich
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Every penny counts
When you see someone obsessed with change, do you think they’re frivolous? Seed money, the starting point of capital, is money that can be made by collecting pennies. It is said that people who take pennies lightly are unlikely to become rich. It is important to realize that pennies add up to big money, but more importantly, pennies create “rich habits”.
When you see a price difference of a few pennies on the same product, do you dismiss it as pocket change? Do you easily assume that a late bill is a small amount that you can avoid by setting up a direct debit? Imagine getting a 10% raise. Divided by 365 days, that’s about $8,000. If I save $8 a day, it’s the same as getting a 10% raise. Can you relate? Don’t take every penny for granted.
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In the book “The Beginning of Wealth – Trivial but Different Behavior Patterns of the Rich”, author Shinichi Sakuragawa compares the characteristics of rich and poor people. The first rule of thumb is that if you want to become rich, “think in terms of multiplication, not division”. For example, let’s say a music subscription costs 3,000 won per month. But rich people multiply that by 12 months.
Is this a service I really need? I could buy 1-3 more weeks of stock with that money.” When you divide, expensive things seem cheap, but when you multiply, you see exactly how much you’re spending. In the era of the subscription economy, the habit of multiplying to accurately calculate your expenses for the year will be very necessary.
Invest in yourself
Kei Sugawara, author of The Trivial Habits of the Rich, says that rich people “don’t save money on themselves”. For example, even if they are good at English, they take one-on-one English lessons with native speakers and constantly attend seminars, paid lectures, and read. There is no tax on the money they invest, so there is nothing to be afraid of. And when the investment accumulates, it pays off in a big way. There are many things that can make you feel richer and happier. Habit #1 requires you to be frugal with every penny, but habit #3 requires you to be bold enough to open your wallet, even if it’s a large amount of money. When do you open your wallet? It’s not when you’re enjoying some Tangin Jam, is it?
Prioritize liquidity over investment
Florin, the author of The Vault of the Rich – Their Strategies for Never Leaving the Bank, was a banker who learned his trade by watching the rich, from VIPs with billion-dollar deposits to people who pay over a billion dollars a month in rent. He considered his job a blessing because he got to meet the rich every day and observed their investment habits. As a result, he emphasizes that to get rich, you should prioritize liquidity over investment. This is because among profitability, stability, and liquidity, liquidity is what the wealthy value most.
They prefer safe, steady returns rather than focusing on high returns. A certain amount of assets must be held in cash. This is so they can be flexible and respond quickly in times of crisis. This is why they are so good at managing risk. They don’t use risky financial instruments just because they are “high risk, high return.” They habitually manage based on “stability” even when deposit rates are low. You should make it a habit to follow the golden rule of 8:2 in wealth management: 8 percent in stable assets and 2 percent in stocks, funds, etc. to achieve positive alpha returns.
Get high value at a low price
Warren Buffett is attributed with the phrase “Get more for less.” He used to measure the value he got out of a transaction by the amount he paid for it. This doesn’t just apply to buying and selling stocks – whatever you’re looking to buy, the higher the price you pay, the less value you get out of the transaction, and the lower the price you pay, the more value you get.
Buying good groceries at a discount when they’re about to expire at a big-box store, using flea markets and second-hand market apps to get what you need instead of buying brand new, and buying carryovers or seasonal items for another season are all great examples of value investing. This way, you can make additional investments with every dollar you spend. Get in the habit of making sure you’re getting more than your money’s worth before you open your wallet!
Create habits that make you rich
Dr. B.J. Pogue, founder and director of the Behavioral Economics Lab at Stanford University, writes in his book The Details of Habit that after tracking and coaching more than 60,000 lives over 20 years, he found that people who made small resolutions like “I want to eat healthy food for breakfast,” “I want to exercise at least 10 minutes a day,” and “I want to sleep well” and turned them into habits dramatically changed their lives.
If you want to get rich, you’re going to have to create habits to get rich, so why not start by creating small, trivial habits?
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