It's Your Money  

Habits of millionaires

Although it may be hard for some people to retire on one million dollars these days, the simple idea of being a millionaire lives on.

That got me thinking. I deal regularly with many clients who have $1 million or more of investment assets and it would be interesting to see how they got there.

What common habits do they have and what sets them apart from those who have less than that saved?

Here are the common habits that I compiled.

They take care of themselves – Most millionaires surveyed exercise regularly, eat healthy and set health-related goals that they follow through on.

They read for self-improvement – Reading can help people learn and grow. Research on this found that 85% of self-made millionaires read two or more books a month.

They avoid debt as much as possible – Many live a frugal lifestyle and only make purchases that they can pay for in cash today. Avoiding a purchase that will incur interest payments is their top goal.

They don’t act rich – Research found that most prestigious cars are actually driven by people who are aspiring to reach financial security and not those that are already there. Most wealthy people surveyed were driving non-luxury brands.

They are willing to spend money on education – For themselves, their children and even grandchildren, they understand the value of education and how it relates to wealth building and are willing to invest in education whenever possible.

They avoid supporting their adult children financially – While this may sound harsh if they have the means, most self-made millionaires know that financially supporting adult children will only make it more difficult for them to succeed on their own. Avoiding large gifts is equally important.

They create multiple streams of income – Not willing to rely on a single source of income, the average millionaire diversifies their sources to better handle economic downturns as well as further grow their wealth.

They don’t spend hours managing their investments – Most millionaires have at least a portion of their wealth in the stock market, but you won’t find them buying and selling regularly. The majority will buy and hold investments for many years to allow them to grow through market cycles.

They are entrepreneurial – Self-employed people are four times more likely to be millionaires than those who work for others. Like it or not, those that are willing to take on these risks are the same ones with higher net wealth.

They’re patient – Understanding that most get-rich-quick schemes don’t work, they build their wealth over time and avoid living beyond their means to reach their goals.

How do you get there yourself?

I hope you’re practising some of these habits already, but if not, choose three to five habits you believe will benefit you the most and plan to make them your own.

Keep incorporating more of these habits over time to reach your long-term goals.


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About the Author

Brett, designated as a chartered investment manager and certified financial planner, is the regional director (Okanagan) for IG Wealth Management.

In addition to his “day job," Brett was appointed to the board of directors of FP Canada (formerly FPSC) in 2014, named as the board’s vice-chair in 2017 and took over as board chairman in 2019. 

Brett has been writing a weekly financial planning column since 2012 and provides his readers with easy to understand explanations of the complex financial challenges that they face in every stage of life.

Enhancing the financial literacy of Canadian consumers is a top priority of Brett’s and his ongoing efforts as a finance writer and on the regulatory side through the FP Canada board focus on this initiative.   

Please let Brett know if you have any topics that you’d like him to cover in future columns by emailing him at [email protected]

The views expressed are strictly those of the author and not necessarily those of Castanet. Castanet does not warrant the contents.

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