Wealth building doesn’t always begin with a big inheritance or family money. Most millionaires are ordinary people who have accumulated their wealth over time by making intelligent daily choices and adopting sound money habits. Here are the top 10 habits from Faron Daugs, a CFP, of his richest self-made millionaire clients: nothing-to-$6–8-million net-worth clients who started with little or nothing. Forty-five to fifty years old, adding zeros to their net worth step by step.
It doesn’t take being a wealthy person to start these behaviors. They’re teachable to anybody, wherever you start. Daugs says start with one or two habits and add more as you become comfortable. The focus is on saving, investing, and avoiding mistakes that keep individuals behind. Let’s dissect them in plain terms with numbered points for ease of reading.
Why Self-Made Millionaires Succeed
Self-made millionaires learn basic money management skills at a young age. It all starts with budgeting, then saving, and investing. Often, Daugs’ clients began with just a few dollars right after high school or college. They worked hard and climbed up. The key is discipline and time. Small changes add up over years. Now, here’s how they do it.
1. They Avoid All Kinds of Debt
Debt can chew up your money not through a big bite but a slow leak. The self-made millionaire will avoid it where possible. All but the home mortgage is liquidated with great speed. Daugs has a word of caution about high-interest debts such as those related to credit cards or car loans. These go for so much interest – which is a complete waste of cash that could have been saved or invested.
Pay off the full amount of your credit card for each month in order to avoid paying fees. Only buy what you can afford to pay for right now. Forget store cards – the interest and limits are high. Releasing money from debt payments has a much faster effect on building wealth.
2. They Buy Cars Outright and Keep Them for Years
New cars lose a lot of their value as soon as you take them home. This is why millionaires buy and do not lease. They are thinking of holding onto the car for a long period, perhaps over ten years. That way they gain by not having monthly payments and accrue cash for the next one.
If you have to finance, pay it off quickly. Then, drive the car even longer. Daugs says this turns a money pit into a smart choice. No bleeding on “upgrades” every few years.
3. They Build a Big Emergency Fund
Life throws us all a few curveballs, whether that’s a car breaking down, or a visit to the doctor. These can be covered stress-free with an emergency fund. The majority of Daugs’ clients save six to nine months of living expenses; experts recommend starting with three to six months.
Put this money in a high-yield savings account so you get better interest. It’s liquid but earns more than a regular bank account. Even a modest fund helps Daugs refer to it as “the first step to a strong money base.”
4. Regular and Automatic Investment
Solo saving just doesn’t cut it—investment is where your money grows. Millionaires have automatic transfers set up to an investment account. They put money in stocks, bonds, or ETFs every month or two weeks.
Try saving and investing about 20% of your income. That covers emergencies, retirement, and goals. Live on the rest. It’s growing over time without you thinking about it. Daug’s clients use investments for vacations or new cars, no loans.
Know your risk level before you invest. Younger people can afford to take many risks for higher returns. Older people tend to play things safe when it’s right around their retirement years.
5. They Use Every Perk at Their Job
Your job can give you more than just a paycheck, and smart millionaires grab all the benefits to save and grow their money. Here’s a quick list:
- Free Money: Contribute enough to get your employer’s full match because that’s free cash.
- Insurance Plans: Buying group life or disability coverage is cheaper than buying it alone.
- HSA: Employer matches on eligibility; contributions are tax-deductible.
- Legal services: Use in setting up wills or a trust to hammer out attorney fees.
- ESPPs: Discounted purchase of company stock if you like the company
All these add up without extra work. Take a look at your benefits each year.
6. They Ignore the Trap of “Keeping Up”
You might be tempted to spend it when you see friends with the latest gadgets. But the millionaires focus on what is best for them, not for someone else. They do not go in for the constant updating, whether in phones or apparel. Thus, they stay out of debt and have freed money to build real wealth.
Make a budget that fits your needs and dreams. Five steps to tracking spending: list income, note expenses, set limits, check weekly, adjust as necessary. Real happiness comes from making healthy choices, not flashy ones.
7. They Hunt for Tax Breaks Everywhere
They find tax breaks everywhere. Taxes take a big bite, but millionaires minimize them legally through deductions from retirement savings, home interest, donations, college funds, and HSAs. Daugs advises talking to a tax professional with the best plans.
Start small: Max out tax-advantaged accounts over time; this saves thousands.
8. They Develop Extra Income Streams
One job is rarely enough. Millionaires bring in passive income through rental properties. You can start much smaller – rent out a room on Airbnb or your car on Turo when you’re not using it. These bring in cash with very little daily effort.
During tough times, side gigs from home work too. Ideas include online surveys, freelancing, or selling crafts. Diversify to make money work for you.
9. They Save for Kids’ College from Day One
Raising children can be expensive, particularly in terms of tuition fees. Millionaires begin their investment in 529 plans at an early age for tax-free growth — even small monthly deposits can compound the rest. Connect a cash-back credit card to your 529. Earn 1.25% on purchases and some great bonuses on deposits. All that buys and pays for everyday spending knocking out college money.
10. They Get Expert Advice Often
Millionaires are knowledgeable about their money. They know what they earn, own, and spend. They also get advice or information for free. Apps, YouTube channels, and books make it simple to learn the basics.
No of-course front-loaded fees. All should be crystal clear. A good one, in Daugh’s words, acts as a teacher and partner.
Wrapping It Up: Kickstart Your Wealth Building Today
These 10 habits demonstrate that wealth is an outcome of consistently applied actions and not luck. Pay off all of your debt and save as much as you can, invest wisely, and keep learning along the way. Daugs’ clients started off modestly: cutting their debts, building their funds, then growing their assets. Discipline turns habits into millions.
Pick one today. Monitor monthly progress. Over years, you will see real change happening. After all, everyone may start; no big money is even needed.
