While it's unlikely that you or I will ever be a billionaire, there are some things we can learn from how the richest of the rich live their lives. When examining the investing, spending, working, and lifestyle habits of billionaires, it becomes apparent that there are some common factors. We asked four of our writers to shed some light on billionaire habits that you can implement in your life, and here is what they had to say.
Dan Caplinger: One key trait most billionaires share is that they are willing to take on what many would consider to be huge amounts of risk in order to achieve their financial goals and dreams. When you look at the current ranks of billionaires, you'll find a substantial proportion of them coming from entrepreneurs who built businesses from the ground up. Although many of these billionaires had financial support from family wealth or other sources that helped reduce the risks somewhat, the eventual success of these business enterprises typically relied on hard work, determination, and the sheer pigheadedness of refusing to accept defeat.
Risk plays a role in everyone's financial planning. Especially with current low interest rates offering next to no income on low-risk investments, investors have discovered that taking risk is almost a necessity in order to produce the returns they want and need. Although you don't have to shoot for the moon, as many billionaires did to reach their current success, having an idea of the goal you're striving to achieve will make it that much easier to gauge your progress and recognize when your efforts have paid off.
By finding a risk level you can tolerate but that will still produce good returns, you can use this billionaire strategy to boost your investment returns over time.
Matt Frankel: One of the most common habits of billionaires isn't directly related to saving, spending, or earning money -- billionaires take good care of themselves. Studies have shown that wealthy people exercise more and have healthier diets than those of lesser means, and both of these things affect people in ways that can help build wealth.
According to one study, 78% of wealthy people do aerobic exercise at least four times per week, which can improve mood, boost energy levels, and promotes better sleep, all of which can increase productivity and performance at work. On the diet side, 70% of wealthy individuals consume less than 300 calories per day from junk food, in sharp contrast to just 3% of the poor who do the same. A healthy diet can reduce stress levels and increase productivity -- and lead to the obvious financial benefit of fewer medical bills.
Aside from the benefits of more effective performance at work, a healthy lifestyle means you could work longer. The later years of one's career are generally the highest-earning years, so being able to work several extra years could mean millions in extra earnings.
Now, I'm not saying this is a perfect correlation by any means. There are plenty of people in excellent shape who don't earn much, and there are plenty of rich individuals who love junk food. In fact, Warren Buffett is notorious for his love of Coca Cola and ice cream. However, it does make sense that living a healthy life increases your chances of advancement at work, success in business, and ultimately, the ability to accumulate wealth.
Selena Maranjian: Many of the world's richest people have one particular habit in common, and it's likely one that has helped get them to where they are: reading.
Consider these words of Warren Buffett:
I read and read and read. I probably read five to six hours a day. I don't read as fast now as when I was younger. But I read five daily newspapers. I read a fair number of magazines. I read 10-Ks. I read annual reports. I read a lot of other things, too. I've always enjoyed reading. I love reading biographies, for example.
Note that Buffett does a lot of reading that's directly related to investing, such as company 10-Ks and annual reports, but he also reads more broadly, to learn more about what's going on the world and in various industries. And through other books, such as biographies, he can learn more about history and various human achievements and failures. We, too, would benefit from reading much more about investing and the business world, as well as topics beyond them. Reading up on science or technology, for example, can inform our investment decisions about many companies, even if it's just to help us realize that we don't know enough to have confidence in them.
Bill Gates, even richer than Buffett, is also a voracious reader. He said, "I read while traveling, waiting for meetings, in the evening, and especially on vacation." Now that he's a major philanthropist, he doesn't just read briefs and write checks, but he reads deeply on the issues he cares about: "I might read more about diseases than about any other subject."
So, what should you read? Well, perhaps start with some investing classics: Peter Lynch's One Up on Wall Street, Philip Fisher's Common Sense and Uncommon Profits, and Benjamin Graham's The Intelligent Investor.
Jason Hall: If you look at the most successful billionaires in the business world, the one common trait that jumps out is how focused most of them are on the thing that has made them super wealthy.
Take 84-year-old Warren Buffett, who made himself into perhaps the best capital allocator in history, building Berkshire Hathaway into one of the greatest investments of all time, through both his stock-buying prowess and his ability to acquire amazing, cash-cow businesses and then integrate them into Berkshire.
On the other end of the spectrum is Facebook founder, chairman, and CEO Mark Zuckerberg, who only turned 31 this year, and has remained focused on building that business into the world's dominant social network.
The reality is this: Do-it-all billionaires like Elon Musk -- who runs two companies, SpaceX and Tesla Motors, and is chairman, largest investor, and co-founder of a third, SolarCity -- are the exception.
For the most part, wealthy people get that way by focusing on something that offers huge opportunity, and that they excel at. It's no different for world-class athletes.
Excelling at anything takes both skill and dedication. We could all learn this lesson and apply it to our own lives, whether it's relationships, our career, or how we invest.
Dan Caplinger, Jason Hall, Matthew Frankel, Selena Maranjian, and The Motley Fool own shares of Berkshire Hathaway; The Motley Fool also recommends it. Jason Hall, Selena Maranjian, and The Motley Fool own shares of Facebook; The Motley Fool also recommends it. Jason Hall and The Motley Fool own shares of Solar City; The Motley Fool also recommends it. Jason Hall and The Motley Fool own shares of Tesla Motors; The Motley Fool also recommends it. Try any of our Foolish newsletter services free for 30 days.