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 from working from the ground up. In the world of business, a million dollars is a million dollars no matter what; but in the grand scheme of life as I break down in Third Circle Theory, 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 10 critical habits that I picked up along the way that many of my millionaire friends and I have in common.
1. 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.
2. 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 matter 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 the Secret Academy 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.
3. 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. 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, its 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.
4. 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.
This is the idea that most poor people miss in life. 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.
5. Think 10 years ahead and set meaningful goals.
One of the biggest differences between those with wealth earned and those without it is the idea of vision. We are not talking about vision for your business, but rather a vision for your own life. You can’t get big changes done in two years, but being able to look ahead 10 years and then work back is the key to successfully reaching goals. Most look 2-3 years ahead and typically reach their smaller goals, but as a result they focus on irrelevant goals. Things like buying a house in two years, or buying a Ferrari by 25 are simply useless goals that hold no weight.
Instead of thinking in such small steps, thinking bigger like building a brand that is accepted as the #1 brand for clothing for teens in 10 years is manageable even if difficult, and indirectly encompasses those two smaller goals originally imagined. Set larger goals based on your evolved capacity as knowledge is compounding, rather than focusing on smaller actions like attaining luxuries that have no worth.
6. 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?
7. Don’t allow fears to stop you.
Fears are present in all of us, and the main reason why, as I describe in Third Circle Theory, is that they are easy to conquer. Regardless of what your fears are today, they will never go away; instead they change shape and form. Even after you make millions, you will still be faced with internal fears. The difference is that fear shouldn’t stop you from moving forward.
The simplest of examples is being afraid to lose money shouldn’t prevent you from learning and participating in the stock market. The best way to overcome your fears is to constantly take action, jump in, and eventually figure it out. Think of it as you being afraid of heights and then skydiving; keeping in mind that the hardest part of the equation is moments before you jump out of the plane and not the actual fall. Understand that our perceptions of fears are much more powerful than the actual action that we fear and realize that no one is immune to fear, but we have found ways to not allow them to get in the way.
8. 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.
9. 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, 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.
10. We act based on facts, not opinions or assumptions.
Too often, people have intense emotional reactions which cause them to put themselves in a bad positions. When you succeed, you realize that you live a rational life filled with the ability to think before you act rather than act and then think. The main differentiator is the immediate reaction that occurs in successful and unsuccessful people. Think of this: as you are walking down the street, and someone bumps you but doesn’t apologize. It may be the normal route to ask for an apology or raise your voice and say “excuse me,” but the follow up can lead to more conflict and more issues rather than a resolution to an irrelevant action. Being able to use a high level of emotional intelligence at all given times both in your personal and business life, enables you to prevent major setbacks.