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The 10 Habits of Financially Successful People

A couple of weeks ago, a reporter from Kiplinger interviewed me about financial habits. "Do you think there are specific habits that make certain people more successful with money than others?" she asked.

I generally don't like to make generalizations, so at first I hedged my answers. But the more I talked with the reporter, the more I realized that I do see differences in the way people handle money. I thought about the people I know who are always broke, including my brother. These folks seem to share some common qualities. And the people I know who have managed to build wealth? They share some similarities too.

None of these differences are absolute, of course, but from looking at my own friends, and from reading the stories Get Rich Slowly readers have sent me over the years — especially stories about how people have moved from debt to wealth — I do think there are some patterns, including:
  • Successful people surround themselves with positive people. They limit their exposure to negativity and naysayers, preferring to spend time with folks who have can-do attitudes. They don't have time to listen to the reasons something can't be done; they'd rather find ways to make it happen.
  • Successful people aren't flummoxed by failure. They know that mistakes are inevitable and should be treated as stepping stones to success rather than signs of weakness or reasons to stop trying. (As a side note, I've become increasingly convinced that the best thing we can do for our children is not to praise achievement, but to praise effort. The former breeds fear of failure.)
  • Successful people manage their time effectively. They recognize that minutes and seconds are a precious non-renewable resource. So, they set priorities and pursue them with passion. My successful friends seem to watch less television (and play fewer videogames) than my unsuccessful friends, for instance. There's nothing inherently wrong with TV and Flappy Bird, but they suck up time that could be spent exercising or reading or taking a class.
  • Successful people ignore the opinions of others. They don't feel compelled to "keep up with the Joneses." They limit their exposure to mass media not only because it allows them to be more productive, but also because it reduces the influence of advertising and the pressure of cultural norms. When investing, they don't follow the herd. The wealthy people I know all drive older cars (many of them bought used!), dress modestly, and avoid conspicuous consumption. But the people I know who are most often broke? They're on top of trends and fashion.
  • Successful people have direction. They act with purpose. They know why they're working hard and saving money. They have a mission, even if it's as simple as putting their kids through college, and their daily actions are aligned with their long-term goals. None of the folks I know who struggle with money have a clear idea of what they want to do with their lives.
  • Successful people focus on big wins. Yes, they develop smart habits and pay attention to the small stuff. But they also understand that if they're diligent with their dollars, then the pennies will take care of themselves. The average person economizes on the small things but isn't willing to make sacrifices when it comes to housing, transportation, or income. And the folks who are broke all of the time? Well, they fritter away their pennies and their dollars.
  • Successful people do what's difficult. They don't procrastinate. My friends with money work longer, harder, and smarter than my friends who have less. They practice deferred gratification, sacrificing small comforts today in order to obtain greater rewards tomorrow.
  • Successful people make their own luck. They practice awareness so that they can recognize opportunities when they come along. Moreover, they act boldly, seizing these opportunities where others might hesitate to act.
  • Successful people believe they're responsible for their future. They have an internal locus of control. That is, they understand that although it might not be their fault they're in a given situation, it is their responsibility to change it, to respond productively — and proactively.
  • Successful people grow and change over time. They adapt. They evolve. They're not afraid to entertain different points of view. Most importantly, they're not afraid to change their minds. They seek knowledge and experience, and they allow the things they learn to mold them.

Most people (including me) follow a few of these rules but not others. The most successful people I know do all of the things on this list; the least successful people do none of them.

I guess the bottom line is my friends who are successful with money (and life) take what they do seriously. They treat their personal life as if it were a business. They act as both CEO and CFO, and they do their best to "grow the business" over time.

Your personal wealth is your real business; everything else just supports it.

From your experience — and from observing the people around you — what qualities do you believe separate successful money managers from those who remain broke? Given roughly similar backgrounds, why do some folks build wealth and others struggle to make ends meet? And have you seen anyone overcome their past to build wealth?

The original article: The 10 habits of financially successful people appeared on

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Read/Post Comments (17) | Recommend This Article (130)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On April 14, 2014, at 6:26 PM, foolishlymeek wrote:

    The best way to be financially successful is to live below your means. You cannot save and invest money you don't have. In addition, if you're paying high fees and interest for payday loans and credit cards, you will never get ahead financially!

  • Report this Comment On April 15, 2014, at 8:30 AM, dbhendrix wrote:

    Interesting to notice that these line up pretty well with the Christian principles that we have been taught in Sunday school and Bible study all of our lives. It is a positive lifestyle that is focused on opportunity, service, responsibility and growth.

  • Report this Comment On April 15, 2014, at 12:59 PM, Mathman6577 wrote:

    Good article:

    Successful people focus on big wins: the difference between a $400,000 McMansion and a modest $250,000 house is the difference between retiring at 65 and 55.

  • Report this Comment On April 15, 2014, at 6:49 PM, livelongman wrote:

    These are the traits of success in every endeavor - not just financial success. Very well laid out.

    P.S. - please tell me where McMansions can be bought for $400k

  • Report this Comment On April 15, 2014, at 7:00 PM, marei wrote:

    Change comes from taking responsibility, evolving priorities, making your plan then working your plan.--Tom Reilly

  • Report this Comment On April 15, 2014, at 7:13 PM, DavesHere wrote:

    The "ignore the opinions of others" is a subset of a broader concept, probably best stated by Marty Whitman, a guy who routinely dealt with incredibly complex situations: "...rarely do more than three or four variables really count. Everything else is noise."

    And a point not mentioned is one from Warren Buffett, the exact wording of which I forget, but which runs to the effect that, in finance, no one gets called out on strikes. The most successful ignore opportunities for marginal gain (regardless of size), keep their powder dry and wait for the fat pitch to cut the plate in half, mixed metaphor intended.

  • Report this Comment On April 15, 2014, at 7:30 PM, cooncreekcrawler wrote:

    Good article.

  • Report this Comment On April 15, 2014, at 8:12 PM, beslow45 wrote:

    I have to disagree with the statement "your personal wealth is your real business; everything else just supports it." Although I guess it depends on how you define wealth. If you have enough money to meet your needs then the focus on gaining more wealth is insane. Again, people who are content have simpler needs.

    I agree with many of the above points, but there is more than creating personal wealth.

  • Report this Comment On April 16, 2014, at 10:09 AM, kewlness wrote:


    Must personal wealth necessarily mean money? I count friends, family, good health, and many other positive traits as a part of my personal wealth. In this sense, I certainly agree with the statement "you personal wealth is your real business; everything else just supports it."

    But, as in all things, your mileage may vary...

  • Report this Comment On April 16, 2014, at 10:46 AM, ChasRIA wrote:

    Many long years ago a motivational speaker, Ty Boyd, shared:

    "Successful people strive for pleasing results.

    Failures strive for pleasing process."

    I've found this to be so true.

  • Report this Comment On April 16, 2014, at 1:42 PM, Wijilly wrote:

    I enjoyed the article. Doing what's difficult... gonna have to work on that one :).

    PS - Mcmansons in Texas:

  • Report this Comment On April 16, 2014, at 2:02 PM, TMFMTHead wrote:

    I see a couple of things that are critical and discussed above.

    1. Delayed gratification, or living below your means. It allows you to save, to invest and creates a mindset of not chasing after all the gadgets, toys and junk that retailers want you to buy.

    2. Risk, the right amount of risk. Being willing to jump in when it right, because you are willing to take some risk. Yet not betting it all over and over again. There is a critical balance with risk.

    3. Set priorities in life. In business, in personal life, with friends, family and others. Know what is important and don't let unimportant things take up your time. Watch the movie Family Man to see what I mean. It isn't all about the accumulation of money.

  • Report this Comment On April 16, 2014, at 5:45 PM, Strider100 wrote:

    In my younger years I read a book called "The richest man in Bablyon" very old book. The book inspired me to practice many of the traits mentioned in this article. I have to say after 40 years the habits worked for me. Good article.

  • Report this Comment On April 17, 2014, at 4:34 AM, TMFSpiffyPop wrote:


    Great article. --David

  • Report this Comment On April 17, 2014, at 8:33 AM, JunkBondster wrote:

    I think successful people are born to caring and loving parents. You won't find many successful people coming out of homes where they are beaten, mentally and physically abused or left on their own by cruel parents who aren't there. But if a person didn't win the decent parents lottery they might get a decent school in the neighborhood to compensate. However, nasty parents seldom live near a safe school so it's not going to be a very successful life.

  • Report this Comment On April 17, 2014, at 9:15 AM, Mathman6577 wrote:

    @livinglongman: just a figure of speech. It could be $300,000 for some people to get "house poor".

  • Report this Comment On April 17, 2014, at 11:07 AM, 48ozhalfgallons wrote:

    All houses are McMansions till free and clear. Both my sons' homes, larger than mine, yet modest by realtors' standards were free and clear before both turned 40. Neither want a bigger house. Both want my grandchildren to have good educations and rewarding careers. All of us married and are still married to conservative wives. dbhendrix's comment acknowledges the real entry to an abundant life.

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