While having a million dollars makes you a millionaire, not everyone reached that landmark the same way. There are those who inherited the title and others who became self-made millionaires working from the ground up. In the world of business, a million dollars is a million dollars no matter what; but becoming a millionaire is more about who you have become along the way rather than how much money you have accumulated. So I decided to break down 7 critical habits that I picked up along the way that many of my millionaire friends and I have in common.
- You have to understand opportunity cost.
It is very true that being a millionaire means that you are able to spend money to have all the things you don’t want to do done for you; however, you wouldn’t stay one very long if all you did was spend money and turned lazy. It certainly isn’t how we became millionaires to begin with. It is imperative to know how to differentiate between optimizing your time and not being lazy. You have to understand what your time is worth monetarily and see if participating or leading certain aspects of your life and business are worth your time.
An example would be your ability to do your own accounting. This is something you are forced to do early on in life, but as you accumulate money it may become time consuming, more complex, and not the best use of your time. If the cost of an accountant is $20/hr, and you a can make $200/hour doing what you are best at, then you’re better off spending money on hiring an accountant.
- You can’t help others if you haven’t helped yourself first.
While we all want to help everyone that comes to us asking for advice or needing mentorship; unfortunately, it’s not always possible. This requires us to separate those who are truly in need and invested versus those who simply seek handouts. Keep in mind that we are limited in time already, so giving even more of our time away has to be done in a manner that yields a return on investment.
Early on before I was financially free, I used to think that I wanted to help everyone all the time. Believe it or not, I always found a way to do so, but I realized quickly that by helping everyone while on my very own quest of rising to the top, I was carrying a lot of weight and moving very slowly. Helping others and bringing people up with you is important, but it is even easier and more powerful to do so once you’ve helped yourself to begin with. You are more useful even to those you help if your focus isn’t divided between yourself and others.
It wouldn’t have been possible for me to invest the right resources and take the right direction building Secret Entourage if I was constantly worrying about being financially stable. Instead taking that initiative first enables me to be focused on the purpose of Secret Entourage rather than the immediate return. Always help yourself first, so you are in a more stable position to help others.
- Buy value, not price.
Financially poor people buy pricing, and self made millionaires buy value. When you see a commercial on TV, you see pricing because in most cases those are geared to the lower class. When you are not financially trained to understand money, then you tend to buy based on the lowest price. As you become a millionaire, you realize that buying a price doesn’t get you very far, but buying value and understanding the scope of your purchase is the biggest difference.
Allow me to give you a car example, as I am a car collector and also the author of the Exotic Car Hacks guide. When most people are on a budget, they tend to see an ad on TV that says that a Volkswagen lease is $299/month, and it suddenly looks attractive because its price is affordable. A lease of 36 months would mean that with $1000 down and a total of under $11,000 in payments, you will drive a Volkswagen Jetta base model with mileage restrictions. In this case, you are buying pricing.
The car you are buying is not the one you want, it’s the one you can afford and the payment is the same as a 2-year-old Ford that you can buy used. The idea is that the lease in the total terms costs much more than the car you buy to own, but you get a nicer car for the same pricing as a not as favorable car. Despite losing in the long term, you find temporary satisfaction and a falsified feeling of accomplishment. Understand value, so that you don’t fall victim to pricing.
- Create results through people, not by yourself.
Everyone knows that you can’t do everything yourself and while it may be cool to rely on no one, it can also become really difficult to be a one person team. At some point or another you will realize that all you are doing is trading time for money and increasing what your time is worth. The best way to think of wealth isn’t by understanding how you can get paid more for the same work, but figuring out how to get three times the work done without actually having to do it. If you could duplicate yourself to be doing three things at once, you would typically be able to earn three times as much for the same work.
Duplicate your ability and your income will duplicate itself. Even though it’s easier to focus on your own growth, it is also capped based on your own time and eventually hits a ceiling. When you spend time training others to create results you are making less money up front, but also allowing yourself the time to work on what matters such as creating systems and processes for others to follow.
- Take yourself seriously.
One of my biggest pet peeves is dealing with empty promises and constantly missed deadlines by poor people. In life, just as much as in business, being able to keep your word is an integral part of being successful. Most self-made millionaires will tell you that they didn’t get where they are by making empty promises, especially not to themselves.
As basic a promise can be such as “I will do this by a certain time…” or “I will buy this before ….” then keep in mind that by breaking such promises or not making that goal, you are indirectly destroying your own confidence and ability to follow through with others. If you can’t keep promises you make to yourself or keep yourself accountable to your own words, then why would you ever do so when it comes to others?
- We close loops every single time.
When you have learned to make money, you tend to realize that nothing you have ever gotten was free. While some things in life cannot be exchanged for monetary goods, they are still not free. Even the best of friendships is a give and take, and not always a give and take of equal value to both parties, but satisfying just enough to keep the relationship going. Understand that everything that goes up must come down, and everything that gives must take.
Most poor people don’t understand that and often ask a lot or expect a lot and have no plan in closing the loop once they receive things, which is why we typically don’t like doing business with them.
Think of it this way, if you get a ride from a friend for 30 miles, you have to be considerate of the fact that the person has spent gas and time to drive you. There should be something to close that loop by repaying them, whether it be $20 or a favor back at a time of need. While in a friendship there are ways to make sure this exchange is continuous, but it doesn’t have to be immediate (in business and with strangers it isn’t) and the loops must be closed ASAP.
Leaving loops open gives you a sense of owing something to someone and creates almost negative energy, which is why very often when you do something incredible for someone of value, they tend to ask you ”What can I do to help you?” It’s their subconscious way of closing loops.
- We don’t have work life balance; we see everything as life.
Poor people seek balance in life such as time spent with family, time going to the gym, and time spent working, but the reality is successful people will tell you that life itself is a combination of all those things and dividing them is preventive to being successful. It forces them to work within structural limitations that you created for yourself.
In other words, working 15 hours one day may be necessary to finish something today versus tomorrow and lead to very different outcomes. When looked at from a restrictive lens, such as how much time we spend on them, then we limit our ability to push the boundaries of what’s possible and instead always work within our comfort zone.
Being successful is a 24-hour commitment filled with sacrifice and tough choices, organization, chaos, and more importantly, discomfort, pain, and loss. While it may seem very morbid or even negative, I can guarantee that no one who has been through it will say that they wish they hadn’t. The idea is to become a better person along the way, and without discomfort there can be no push to change. Remember that the greatest enemy to great life is a good life; and furthermore, the greatest enemy of a good life is a comfortable life.