7 signs you’re rich, even if it doesn’t feel like it

business woman
  • “Rich” doesn’t necessarily mean owning a huge mansion or taking luxury vacations.
  • You’re wealthy if you can afford to save money every month and are on track to retire when you want to.
  • Another sign you’re wealthy is being able to make choices based on what you want, not just your financial needs.
  • Visit Personal Finance Insider’s homepage for more stories.

“Rich” is relative.

Maybe you think it means being in the top 1% of earners in some of the wealthiest cities in the US. Maybe it means being able to buy a flashy mansion or spend your life flitting from luxury vacation to luxury vacation.

But former investment banker Kristin Addis told Insider she feels richer earning about 40% of her previous six-figure salary while she travels the world. Nick and Dariece Swift, who also left their jobs to make a fraction of their former income, said they’re happier earning less. The self-made millionaire stars of “West Texas Investor’s Club” say their relationships are more valuable than the money they earn.

Ultimately, “rich” can be just as subjective as “happy” – it’s different for everyone. However, there are a few universal indications of wealth, no matter how you view it.

1. You can save money

“Most people fail to realize that in life, it’s not how much money you make. It’s how much money you keep,” writes Robert Kiyosaki in “Rich Dad Poor Dad.”

At the end of the day, money does not solve financial problems – in fact, it often exacerbates them. Consider the lottery winners who lost it all within a few years, or the professional athletes who made millions in their 20s and wound up broke.

“Money often makes obvious our tragic human flaws, putting a spotlight on what we don’t know,” says Kiyosaki. “That is why, all too often, a person who comes into a sudden windfall of cash – let’s say an inheritance, a pay raise, or lottery winnings – soon returns to the same financial mess, if not worse, than the mess they were in before.” 

If you can hold on to a portion of the money you earn, you’re in good shape.

2. You can live comfortably below your means

Living below your means is one of the major tenets of responsible money management: spending less than you earn, however much that may be.

Self-made billionaire Anthony Hsieh told Insider that learning to live within his means was a lesson he learned from his parents, who immigrated to the US from Taiwan.

The habit “has helped me quite a bit and that’s one of the reasons I’ve survived and flourished in consumer lending for 30 years,” he said. “My career spans four different economic and housing cycles and I’m still sitting at the table as a key executive in consumer lending. I think part of that is my discipline of making certain that the company and myself don’t overspend.”

Living within your means might not sound like a big deal if you’re already doing it, but not everyone can manage. A 2019 report released by GOBankingRates found that a third of Americans surveyed are living paycheck to paycheck.

3. You will eventually be able to pay for the things you really want 

If you can go out and buy a yacht in cash today, most people would agree that you’re rich. However, if you can go out and buy that same yacht five years from now after setting a savings goal and socking away money on a monthly or annual basis, guess what? You’re probably still rich.

Survey after survey turns up the same dispiriting result: Americans aren’t saving all that much. The same GOBankingRates survey reported that 45% of respondents had no household savings, and an estimated 40 million households have no retirement savings whatsoever.

Which brings us to our next point …

4. You’re going to be able to afford to retire as planned

Retirement is expensive. Experts say that to live lavishly in retirement, you need to replace about 70%-80% of your current income (although that number is disputed). Even if you’ve downsized, and maybe even relocated to an area with a low cost of living, retirement is still a prolonged period of supporting yourself on little or no income. 

Traditionally, “retirement age” is 65, but that’s changing as more Americans find they’re unable to float 20-plus years of living without a paycheck. Data from a 2019 Bureau of Labor Statistics report found that nearly 20% of Americans age 65 and older are still working.

If you can afford to retire when you want to, it’s a luxury.

5. You aren’t motivated purely by money

One common thread you’ll find among self-made millionaires and those who study them is that “rich people” tend to focus on something other than the dollar signs: They’re solving a problem, or following a passion, or striving to build their business as much as possible.

That, right there, is a luxury. If you can’t make ends meet, you can bet you’ll be focusing on the dollar signs over the intellectual fulfillment of your job.

This doesn’t mean you can’t be happy to earn a sizable paycheck or you can’t be excited to watch your investments grow, but money isn’t your chief motivator or source of joy. If you have the luxury to focus on something other than the money, you’re in a good place.

6. You view money as an ally

“Most people have a dysfunctional, adversarial relationship with money,” writes self-made millionaire Steve Siebold. “After all, we are taught that money is scarce – hard to earn and harder to keep. If you want to start attracting money, stop seeing it as your enemy and think of it as one of your greatest allies.”

The reason wealthy people earn more wealth is because they’re not afraid to admit that money can solve most problems, Siebold says: “[The middle class] sees money as a never-ending necessary evil that must be endured as part of life. The world class sees money as the great liberator, and with enough of it, they are able to purchase financial peace of mind.”

If you aren’t scared of money – if you view it as an ally, and a tool that can help you achieve what you want in life – you’re ahead of the game.

7. You aren’t stuck

“What I have realized over time is that in many ways, money spells freedom,” self-made millionaire and NastyGal founder Sophia Amoruso wrote in her book, “#GIRLBOSS.” She continued:

“If you learn to control your finances, you won’t find yourself stuck in jobs, places, or relationships that you hate just because you can’t afford to go elsewhere. … Being in a good spot financially can open up so many doors. Being in a bad spot can slam them in your face.”

Kathleen Elkins contributed reporting.

Related Content Module: More Personal Finance Coverage

Read the original article on Business Insider

An author who surveyed over 10,000 millionaires found the qualities that make them successful hinge on a distinct behavior

rich man cigar
Many millionaires know that building wealth takes consistency.

  • Millionaires tend to have five characteristics in common, according to Chris Hogan, an author who studied more than 10,000 millionaires.
  • They take personal responsibility, practice intentionality, are goal-oriented, and work hard in order to build wealth.
  • Consistency in each of these areas, Hogan wrote, is what ties everything together.
  • Visit Business Insider’s homepage for more stories.

Millionaires have more than just seven-figure net worths in common – they also tend to share several of the same habits and attributes.

Many used resilience and perseverance to build their wealth, and once they got there, forewent a budget.

But millionaires also tend to share five of the same characteristics, according Chris Hogan, author of “Everyday Millionaires: How Ordinary People Built Extraordinary Wealth – and How You Can Too.” Along with the Dave Ramsey research team, Hogan studied 10,000 American millionaires (defined as those with a net worth of at least $1 million) for seven months, and he found certain attributes kept resurfacing.

“When you see these five attributes working in high gear, you’ll get a clear picture of what financial independence really looks like – and what it could look like for you,” Hogan wrote.

Here’s a closer look at each.

1. Millionaires take personal responsibility

Average millionaires take control of their money decisions, according to Hogan. “They know their success is up to them, and they own it,” he wrote.

Two millionaires he interviewed, Mike and Stephanie, particularly exemplified this – they diligently saved, avoided debt, worked with an investing professional, and committed to improving themselves and their earning potential. They’re now retired and have a net worth of $2.6 million.

The majority of millionaires in Hogan’s study deemed themselves optimistic and willing to try difficult things for new results – and more than 90% will quickly admit when they’re wrong and actively integrate feedback from other people.

“[Millionaires] don’t count on anyone else to make them rich, and they don’t blame anyone else if they fall short,” Hogan wrote. “They focus on things they can control and align their daily habits to the goals they’ve set for themselves.”

Read more: Most people believe 6 myths about millionaires, and it can keep them from building their own wealth

2. Millionaires practice intentionality

Hogan found that many millionaires live on less than they make and exercise discipline when it comes to budgeting. More than half of the millionaires he studied believed the main reason people don’t become millionaires is because they lack financial discipline.

“Millionaires don’t accidentally live on less than they make,” Hogan wrote. “They do it on purpose, because they have a plan. They’re deciding. Living without a budget, though, is the very definition of sliding into misfortune.”

This finding aligns with research by Sarah Stanley Fallaw, author and director of research for the Affluent Market Institute who also studied millionaires – her subjects stressed to her the freedom that comes with spending below their means.

According to Thomas C. Corley’s “Rich Habits” study, living off of 80% of your income or less “will leave you with an excess you can use to build wealth,” he wrote in a post for Business Insider.

3. Millionaires are goal-oriented

“They think ahead and refuse to be swept away by the current of life,” Hogan wrote. He found that 92% of the millionaires surveyed develop a long-term plan for their money, and 97% almost always achieve the goals they set for themselves.

They put in a long-term plan for financial independence, which “helps them avoid distractions and the ‘shiny object syndrome’ the general population suffers from because millionaires aren’t focused on what might make them happy today; they’re focused on their long-term wealth-building plan.”

Consider JP Livingston, who retired early at age 28 with a $2 million-plus nest egg. She lived frugally, tucking away 70% of her take-home pay – 40% in investments, 60% in savings. Even as her income increased each year, she didn’t succumb to lifestyle inflation. Instead, she stuck to her long-term plan and saved even more money.

Read more: An early retiree who interviewed 100 millionaires discovered nearly all of them got rich using the same 3-step strategy

4. Millionaires are hard workers

“They do what it takes even when what it takes isn’t easy,” he wrote. Of the millionaires Hogan studied, 93% said they became millionaires because of their hard work, rather than big salaries.

“Millionaires constantly work to better themselves,” he wrote. “They don’t settle for what they have and who they are today; instead they work to increase their education and their skill set to build more for tomorrow.”

And when it comes to work, rich people often take on jobs that they love – doing what they love and getting paid for it is what self-made millionaire Steve Siebold calls a smart strategy.

5. Millionaires know building wealth takes consistency

Consistency, Hogan wrote, is what ties everything together.

“You can take responsibility, you can be intentional, you can set goals, and you can work hard,” he wrote. “But, if you don’t do these things repeatedly – year after year, decade after decade – then you’ll never get the results you want.”

He added: “They know from experience that wealth-building is a long-term frame, and they’ve seen that sticking to the plan over decades leads to millions at retirement.” 

But being consistent requires two things, according to Hogan: Patience for a long-term view to help you stay focused through the years, and passion to find ways to get the job done.

Read the original article on Business Insider