If there’s one topic that’s endlessly fascinating for financially minded individuals, it’s how successful and wealthy people manage their money on a routine basis.
Here we provide an insight into the simple but powerful personal financial habits of successful entrepreneurs, financial planners, best-selling authors and business leaders.
Habit 1: Don’t Set & Forget
It may sound counterintuitive to what you are accustomed to hearing from financial advisors, but the “set and forget” method of managing finances only works if you don’t, in fact, forget! Setting automatic payments for bills, insurance and other expenses, as well as monthly savings deposits and money transfers is the cornerstone of good financial advice. We’re sure you’ve heard the recommendation to put aside at least 10% of your income.
This is good advice, but if you don’t take time to regularly review your financial payment system, you can lose sight of where your money is going. Brittney Castro, financial planner and founder of Financially Wise Women recommends checking your bank account on a weekly basis, which she calls her “money date”. Treat this as a time to get intimate with your money and spending habits. Maintaining an awareness of where you are at each week (cashflow, checking bank accounts, budgetary reviews etc.) averts financial oversights down the track and exposes areas that aren’t going to plan or look troublesome.
Habit 2: Pay Your Debts Faster
If you aim to have financial control, it’s imperative to know and understand your assets and liabilities. Paying your debt down should be an ongoing routine activity. However, you can rarely go wrong with accelerating your debt reduction. One way of expediting this process is to assign all of your “extra” money into paying off your debts. What classifies as “extras”? Consider cash gifts, bonuses, tax refunds, and other micro income streams as your debt-busting funds. It may be painful to spend these on debt instead of treating yourself, but the rewards will be way worth it.
Of course one of the best ways to avoid bad financial circumstances is to, in fact, put an end to your negative money habits, which lead to debt in the first place. This means taking an honest look at where you are overspending or making bad financial choices out of idleness or apathy. Remember the opening quote to this article – “Good habits are worth being fanatical about.” So don’t get lazy with your money habits and management.
Habit 3: Become an Idea Machine
Bestselling author of Choose Yourself, James Altucher, encourages his followers to generate 10 ideas per day, every day. Renowned for his very honest and somewhat unconventional approach to entrepreneurship and business building, Altucher believes exercising your ideas muscle on a frequent basis, then sharing these with others (influencers, key decision makers, promoters), is the key to attracting fruitful and serendipitous opportunities.
“For me, I can safely say, my life completely changes almost 100% every six months in every way because I simply write down 10 ideas a day,” says Altucher.
“You’re going to have fun creative ideas for every situation. You’re going to be able to see which ideas set your brain on nuclear. You’re going to meet the right people who can help you execute on ideas. You’re going to turn into a fountain of giving.”
You can get more of Altucher’s no nonsense advice on his website.
Habit 4: Give Back
This importance of becoming an “Idea Machine” leads us to our next successful habit: “Give Back”.
Is there such a thing as financial karma? Whether you believe in the mysterious workings of karma or not, successful entrepreneurs, business speakers and advisers tend to agree – giving regularly is a highly effective habit of success, not to mention personally rewarding. Classic business book Go-Givers Get more by Bob Burg and David Mann epitomises this idea in their Five Laws of Stratospheric Success.
The premise is, by giving your time, energy, and financial support to others, you attract the respect, credibility, authority and reciprocity that leads to unexpected returns. Think of it as making small deposits to a bank account, which attracts cumulative interest; by making small “gift” deposits, by way of connecting two parties, making a financial contribution, making introductions, speaking at an event, etc. you create the accumulative goodwill and alliances that convert to greater fortune.
Interested in learning more about how TWD can help you to develop successful wealth habits? Contact our office at firstname.lastname@example.org to speak to a financial expert.