Financial independence habits

Orison Swett Marden once said: “The beginning of a habit is like an invisible thread, but every time we repeat the act, we strengthen the strand, add to it another filament, until it becomes a great cable and binds us irrevocably in thought and act.”

Brian Tracy pronounces that your goal should be to earn as much money as you possibly can over the course of your career, to achieve financial independence. “This is the most common financial ambition of many people and it is eminently achievable if you develop the right habits.”

Think like a millionaire
Tracy has often said that, “You become what you think about most of the time.” If you sincerely want to be rich, to achieve all your financial goals and to retire as a self-made millionaire, one of the smartest things you can do is to develop the habits of thinking and acting that have enabled most other people to become millionaires.

These habits of financial success are learnable, as all habits are, by practice and repetition.

The first discovery about the thinking patterns of self-made millionaires is that they have the habit of thinking in terms of financial independence most of the time. From an early age, or at a certain point in life, they become focused on achieving specific financial goals. They then discipline themselves to make whatever sacrifices are necessary to achieve those goals. They organise and reorganise their entire financial lives, their earning, investing, insuring and spending activities, in such a way that they are all coordinated and helping them move toward hitting those specific financial targets.

Accumulate or spend
Most people have the opposite habits with regard to money. Instead of thinking in terms of accumulation, saving and financial independence, the majority of people think of spending and enjoying every penny they can get their hands on, and whatever else they can borrow from friends or put on credit cards.

At a certain point in life, each person comes to a crossroads. One road leads in the direction of earning, saving and accumulating, while the other road leads in the direction of earning, spending and getting into debt. As a fully responsible adult, you must decide which road you are going to take. And no matter what road you have taken up until now, you are free to choose the road that you are going to follow from this day forward.

Take charge of your financial life
The starting point of achieving financial independence is for you to accept complete responsibility for your financial life. Many people never do this. They instead go through their days, and their money, trusting to luck, with the idea that somehow, sometime, someone else will come to the rescue. The fact is that serious money is long-term money. Most wealthy people organise their financial lives in such a way that their net worth increases about 8–10 per cent per year on the amount of money that they have working.

They do not look for get-rich-quick schemes or easy money. They are patient, persistent and farsighted. They discipline themselves to save and accumulate money over many years. They do not speculate, take risks, or look for fast ways to make money quickly and easily. As a result of these habitual ways of thinking about their money, each year their wealth grows.

Develop a millionaire mindset
The business philosopher Jim Rohn once wrote, “Becoming a millionaire is not that difficult, but it is not the most important thing. The most important part of becoming a millionaire is the person that you have to become to accumulate a million dollars in the first place.”

In order to become wealthy, you must develop a completely different mindset from the average person who worries about money most of his life. You must develop a completely different character, personality and set of habits if you are to achieve your financial goals, and then hold onto the money once you acquire it. “The first million is extremely difficult to acquire, but the second million is almost inevitable.”

When you become the kind of person who can earn and accumulate a million dollars or more, you will also be the kind of person who can earn the second and third million as well. Even if something unfortunate happened, and you lost all your money, you would be able to make it back again fairly quickly because you would have become the kind of person who can become wealthy; and once you become that kind of person, you never lose it.

The first habit of millionaires
Perhaps the most easily identifiable habit of self-made millionaires is the habit of frugality. Wealthy people are careful with every penny and every dollar. They allocate their funds carefully and with great deliberation. They never buy new when they can buy used. They never buy if they can lease, and they never lease if they can rent. They never rent or lease if they can borrow. They know that, as the English saying goes, “If you take care of your pennies, the pounds will take care of themselves.”

For example, most self-made millionaires do not buy new cars. They wait until a good quality car is about two years old before they buy it. Even then, they have the car thoroughly checked out by a reputable mechanic. Once they feel confident that it is an excellent buy, in good condition, they buy the car and then they drive it for five or ten years before replacing it.

Save your money
Self-made millionaires develop the habit of regular saving and investment from an early age. As the multimillionaire W. Clement Stone once wrote, “If you cannot save money, the seeds of greatness are not in you.”

George Clason, in his bestseller, The Richest Man in Babylon, wrote that the key to financial success is to “pay yourself first.” He recommends that you save at least 10 per cent of your income, off the top, before any other expenditure, for the entirety of your working life.

Human beings are creatures of habit. We very quickly adapt to almost any external condition or circumstance. If you save 10% off the top of your salary, and discipline yourself to live on the other 90%, you will soon adjust your lifestyle downward slightly so that you are quite comfortable on the lesser amount. In no time at all, living at this level becomes a habit and you stop thinking about it.

Take complete control of your financial life
By developing the habit of thinking more carefully about your income and savings, you will soon find yourself spending less and less on your day to day expenses. You will find yourself paying down your debts, and not incurring new debts. You will find yourself delaying or deferring expenditures, and finally not even buying those items at all.

Meanwhile, the habit of saving money out of every pay will cause your financial fortress account to grow. As your financial accumulation account grows, develop the habit of adding every additional, unexpected amount of money that comes to you to this account, to make it grow faster.

BY CAPT. SAM ADDAIH (RTD)

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