What is considered fun differs for many people, but most agree that it’s about spending time enjoying yourself with family or friends doing activities that you enjoy.
People often do not realize that millionaires are no different than the rest of us in the way they look at fun with one exception, they can afford to do it more often.
They invest in low-cost index funds.
According to John, millionaires also tend to use the same simple investing strategy: investing in low-cost index funds.
“The high returns and low costs of stock index funds (I personally prefer Vanguard as do many millionaires) are the foundation that many a millionaire’s wealth is built upon,” he wrote.
Experts agree that investing in index funds is a winning strategy when playing the stock market for two reasons: They’re broadly diversified, eliminating the risk of picking individual stocks, and they’re low-cost. Even Warren Buffett champions the strategy.
They spend more time studying and planning for investments.
Millionaires’ preferred investing strategies might be fueled by their research. Millionaire investors spend more time — an average of 10.5 hours a month — planning for investments, according to Stanley Fallaw.
That’s nearly two hours more than under-accumulators of wealth, defined as those with a net worth less than one-half of their expected net worth based on age and earnings, who spend 8.7 hours a month doing so.
“Their literacy in financial matters means that they are more tolerant of taking investment-related risks,” Stanley Fallaw wrote. “Future outlook and financial knowledge typically relate to taking greater financial risk, so the time they spend in managing and researching investments helps in decision-making.”
They make time to work on projects they’re passionate about
On a recent trip to a furniture “mega-store” in Nebraska, longtime friends Bill Gates and Warren Buffett talked about the ways success is enabled by passion.
“Being successful at almost anything means having a passion for it,” says Buffett.
Warren Buffett, chairman and chief executive officer of Berkshire Hathaway, Inc., left, stands with Bill Gates, chairman and founder of Microsoft Corp., as they play table tennis outside Borsheims Jewelry Company, Inc., in Omaha, Nebraska, U.S., on Sunday, May 5, 2013.Daniel Acker | Bloomberg | Getty Images
“If you see somebody with even reasonable intelligence and a terrific passion for what they do and who can get people around them to march,” he says, “even when those people can’t see over the top of the next hill, things are gonna happen.”
Millionaires rise early
The early bird gets more than the worm, it seems. Murray Newlands, a startup advisor, investor and entrepreneur, writes the following:
“Take 100 millionaires from across the world and I’ll bet you not one of them sleeps in. The majority of these individuals are up at six or seven a.m., slaving away while the rest of us are still eating pancakes.”
If you love the snooze button, this one’s tricky, I know. Start small by waking up five minutes earlier than usual. If you’re really serious about becoming an early riser, check out Hal Elrod’s The Miracle Morning. It’s a program that helps you gradually incorporate things you love to do into the first minutes or hour of your day so, eventually, you can’t wait to leap out of bed instead of hiding from the world under the covers.
Millionaires prioritize self-improvement
It’s one thing to say you want to get better at something, it’s another thing to make it a priority and actually do it.
New York Times bestselling author Brendon Burchard—who hangs out with the likes of Bill Gates and Richard Branson—consistently blocks out time to create. He calls it a habit of the super successful.
Want to make it work for you? Choose one thing that you want to do more of, be it exercising, learning a new skill, or creating, and block out time each day or each week to work on it. Treat the appointment like any other and commit to showing up.
Millionaires exercise
Okay, not every wealthy person does—we all know the fat cat stereotype.
But Psychology Today study showed that being physically active positively influenced 15-year income. The physically active men in the study earned between 14% and 17% more than their less active twins.
You know you need it. Just do it!
They’re frugal.
Frugality — a commitment to saving, spending less, and sticking to a budget — is one of the wealth factors that help millionaires build wealth, according to Sarah Stanley Fallaw, the director of research for the Affluent Market Institute and an author of “The Next Millionaire Next Door: Enduring Strategies for Building Wealth,” for which she surveyed more than 600 millionaires in America.
Many of the millionaires Stanley Fallaw interviewed stressed the freedom that comes with spending below their means.
“Spending above your means, spending instead of saving for retirement, spending in anticipation of becoming wealthy makes you a slave to the paycheck, even with a stellar level of income,” she wrote.
They keep their housing costs low.
A prime example of frugality is that millionaires typically live in a home and neighborhood they can easily afford, according to Stanley Fallaw.
She said that most of the millionaires she studied had never purchased a home that cost more than triple their annual income. The median home value for millionaires in her latest study was $850,000 (3.4 times their current income), with a median original purchase price of $465,000.
They save a lot of their income.
Being frugal and living in an affordable home enables millionaires to save. They recognize that income isn’t enough — they have to save what they’re making.
John, who runs the personal-finance blog ESI Money and retired at 52 with a $3 million net worth, has interviewed 100 millionaires over the past few years and found that the median millionaire spent $90,000 a year while earning $250,000 in income — a 64% savings rate. Saving it, he said, allows for investment.
While this savings rate might be slightly off because of things like not counting taxes as spending, the main takeaway, he said, is that millionaires “save a large portion of their income.”
If you make $250,000 and spend $250,000, “you are no better off at the end of the year,” he wrote.
They keep track of how they spend their time
Billionaire entrepreneur and “Shark Tank” investor Mark Cuban calls time “the most valuable asset you have.”
“You can’t buy it. You can’t find it. You can’t store it. You can’t trade it,” Cuban says.
Barbara CorcoranDonna Ward | Getty Images
Fellow “Shark” Barbara Corcoran agrees. The real estate mogul, who went went from waiting tables to running a $6 billion empire, says that a big part of her journey to success was making sure she spent every minute wisely.
That’s why every morning, she divides her schedule into three parts, A, B and C. Each represents a different priority, to ensure that she not only makes money, but takes care of herself as well.
They treat their colleagues with respect
Every employee knows they should treat the boss with respect. But not everyone prioritizes treating their colleagues and subordinates professionally, too.
Bloomberg
Multi-millionaire banker Bill Winters says the best advice he ever received was from his father, who told him that the best employees are kind to people at every level of an organization.
“Make sure that you treat the next level down — whether it’s the assistants or the PA, whatever — with just as much respect as you would anyone,” says Winters.
They don’t let setbacks stop them from growing
In “Option B,” Facebook COO Sheryl Sandberg and organizational psychologist Adam Grant argue that successful people share one crucial trait: resilience.
Sheryl Sandberg and Adam Grant speak at the Commonwealth Club in San Francisco about their book “Option B.”
Sandberg, whose husband Dave Goldberg died unexpectedly in 2015, and Grant say that the ability to cope with and grow from immense tragedy or failure can make or break someone’s career.
Grant says everyone can become more resilient by doing a few simple exercises.
For example, he recommends keeping a journal of contributions you make to others to develop a better sense of how important your work is, something those struggling to overcome personal obstacles can forget.
Millionaires have a daily must-do list
When Corley asked about to-do lists, 81% of rich people said they kept to-do lists, compared to 19% of those in poverty. Two-thirds of wealthy listers complete 70% or more of their daily tasks.
Need help making the most of your to-do list? Before you go to bed, try writing down between three and six (no more) of the most important things you need to do tomorrow. Prioritize them, then start with number one and don’t stop until it’s complete.
Related: Money Under 30s Daily Productivity Planner
Millionaires don’t watch TV
This action item (or non-action item) has more to it than “Judge Judy” reruns being hazardous to your mental health. It’s about productive use of time, Corley says.
Only 23% of millionaires watch more than an hour of TV a day, compared with 77% of everybody else. That leaves time for wealthy folks to do other things that broaden their financial horizons.
Related: Cut the Cord without Getting Bored: Find the Best Streaming Service for You
We’re not saying you have to cancel your Netflix subscription, but if you watch on the regular and you’ve ever claimed you don’t have enough time to do something, well, you have your answer.
Millionaires read The Financial Times
Go ahead, make fun of those sissy, salmon-colored newsprint pages; the FT crowd is laughing all the way to the bank. Last year, Harvard’s Neiman Foundation ran an article on the Financial Times’ supposed struggles.
But it appears some folks are counting the wrong numbers. The piece also cites FT’s own stats, which estimate average subscriber income at $250,000—while 13% of readers are millionaires.
Now, The Financial Times may not be for everybody, but reading a global business publication—especially one that might challenge you to learn new things about business and finance—is a good habit. The Wall Street Journal and The Economist are others to consider.
Millionaires are healthy eaters
It’s hard to get your moneymaking brain in high gear if you feed it Twinkies and Cheetos all day long. And the sad news is that diets of low-income people are getting worse, while those of high-income people are improving, according to a study in the Journal of the American Medical Association, Internal Medicine.
This problem is undoubtedly complex: less-affluent consumers may have a harder time accessing healthier foods due to income and geography, but successful people are also more focused on their diet and overall health and more willing to seek out (and spend more on) healthy foods.
Related: Meal Delivery Comparison – Which Subscription Food Service is Worth the Cost?
If you want to change your eating habits, skip fad diets. Instead, start treating your food like the fuel it is. Eat just enough of the right foods to power through your workday or your workout. Save junky meals and snacks for special occasions when you can enjoy them guilt-free.
Millionaires never stop learning
Audio books. Podcasts. Real books. TED Talks on YouTube.
Whatever the forum, wealthy folks are absorbing more knowledge, Corley says. His research shows 63% of the wealthy listen to audio books during a commute to work.
Try downloading a business or self-improvement podcast for your next 30-minute drive or treadmill session. Alternately, check out one of these essential personal finance books.
They take their social media presence seriously
Serial entrepreneur and “Shark Tank” investor Daymond John says one of his best strategies for succeeding at work is to make sure your social media presence is authentic.
It’s easy to use social media as a simple means of self-promotion. But people who could help you in your career or end up providing you with new opportunities down the line aren’t going to be impressed.
Daymond JohnDavid A. Grogan | CNBC
Instead, use social media to communicate who you are and engage with others in your field.
“Be very honest with yourself, especially today with social media,” John says.
How do you know you’re doing that right? If you can describe yourself in five words or less, you’re onto something, John says.
They don’t budget.
But millionaires are able to be frugal and save without budgeting. Many of the millionaires John spoke with said they didn’t have a budget.
“While it was not expected, the reasons millionaires don’t need a budget makes sense — they make a lot and have self-control,” he wrote in a blog post. “In other words, they make a ton, spend only a portion of it, and have plenty left over. Who needs a budget?”
He added: “A budget is great for the early phases of a financial plan, but if you can grow your income and develop self-discipline not to spend, it’s not vital to your success later on.”
Conclusion
I’ve read that most millionaires (70-80 percent) live in Silicon Valley, and they meet up every Wednesday evening at about 6:30. Under a tree. To discuss business. It turns out that they don’t talk about frivolous things like their vacations, or what they shop for and why. Instead, they focus on what billionaires-in-the-making should be focusing on: how to make more money, and how to make it faster. The rest of us can learn a lot from them — and quite easily thanks to this handy infographic that lays out the 10 important things millionaires do with their time.