8 Millionaire Habits that Will Feed Your FIRE

Michael QuanAutomation, Education, Habits, How to, Misc, Personal Development30 Comments

Some links below may be from sponsors. Please see our disclosure for more info.

millionaire habits

“What is easy to do is also easy not to do.”

-Jim Rohn

I love this quote by Jim Rohn because it boils down success to its very core.  It is, of course, applicable to personal finance and the reason why some people create wealth and become millionaires, while others do not.

So, what is it that makes all the difference?  Habits.

Habits are the fuel used for reaching your lofty goals.  And, ironically, it doesn’t need to be hard to implement.  It just needs to be done consistently.

So without further adieu, here are 8 millionaire habits that will help you get onto the fast track of FIRE (financial independence/retirement early).

Millionaire Habit 1: Set Goals

Research has shown time and time again that those who write down their goals have a much higher likelihood of achieving them.  Millionaires have a vision.  They have learned how to take that vision and break it down into bite-sized pieces that are achievable.  They know that each step will leave clues (good or bad) towards their outcome.

If you truly want to reach FIRE, you’ll need to set goals specific to your lifestyle.  Some of the most simple goals setting are figuring out your annual expenses and multiplying that by 25.  Let’s say your annual expenses are $100,000 per year.  You’d need $2.5M to live off of a safe withdrawal rate of 4% (aka the 4% rule).

Millionaire Habit 2: Manage Debt Strategically

Sure a millionaire will splurge occasionally (well maybe just me), but their natural tendency is to keep ahead of their consumption.  They avoid consumer debt like the plague and choose to live below their means in order to grow their assets.  Paying interest on consumer debt will erode your ability to save, so just pay off your credit cards each month… please!  Millionaires will use debt instruments like credit cards to their advantage, for purposes of travel hacking, or floating purchases for free.

On the other side, millionaires often use “good debt” to their advantage.  Good debt is borrowing money to create an asset that will return more to you than the interest paid.  Real Estate investments are a good example of this.  If you purchase your property with cash flow in mind and financing makes sense.  Then you have essentially leveraged your money.  This is super important for FIRE because passive income is King.

Millionaire Habit 3: Save Automatically

Millionaires pay themselves first.  That means saving a good portion of their paycheck even before it has time to settle into a checking or savings account.  These savings go into separate accounts that are off-limits (eg .IRAs) or other investments like Sharebuilder which allows you to purchase equities or funds automatically every week.  Another popular automatic savings bank is Capital 360 Savings (formerly ING Direct).  And finally, contributing to your employer’s 401k (or benefit plan) on a regular basis is important.

Saving up a big enough nest egg to retire early is not impossible.  In fact, it’s been done by a lot more people than you realize.  And the majority of those who FIRE, have figured out this simple habit of paying themselves first.  After you hit your FIRE number, the rest is “gravy”.  So save/invest as much as you can as early as you can.  You’d be surprised by the power of compound interest… trust me!

Millionaire Habit 4: Invest in Assets

A millionaire is focused on purchasing assets… not liabilities.  Popular assets include real estate, equities (stocks), and businesses.  Remember Rich Dad’s lesson: Assets put money in your pocket, Liabilities take money out!

During FIRE, it’s important to continue managing your assets and/or even increase them.  You might even consider an independent wealth advisor at some point if you don’t care to manage your own money

Millionaire Habit 5: Read A Lot

Millionaires are inclined to read and continually increase their knowledge over time.  This isn’t limited to personal finance, but also personal development, history, and philosophy.  Here are some of my favorites.

I’ll bet a bunch of you reading here today are a huge fan of books.  During my search for FIRE, I would read non-stop!  Before the days of the mainstream Internet, I would visit the library weekly for free books.  I still visit, although not as often now with kids.  However, I do listen to audiobooks through Audible when I drive places.

Millionaire Habit 6: Protect their Time

Millionaires understand that time is precious.  They may spend their money to increase access to their own time by hiring help to perform tasks.  This focus allows them to accelerate their time spent on meaningful activities with family, building assets, or doing work they love.

This skill set is particularly helpful during FIRE because you want to maximize your time doing the things you love (fishing anyone?).

Millionaire Habit 7: Persist Over Challenges

Persistence is arguably one of the most important habits you can have when pursuing FIRE.  Most millionaires have hit some roadblocks along their journey.  And, most have overcome those roadblocks through persistence.  Persistence pays… plain and simple.

I suspect that some people will get discouraged when there’s a sizable market correction and their portfolios take a dive.  Don’t let that be you.  Have faith in a long-term investment strategy and persist!

Millionaire Habit 8: Give Back to Others

Millionaires express their passions through donations to their favorite philanthropic organizations.  By giving, they are not only helping others but also helping themselves in the process.  It’s a strange phenomenon, but millionaires swear that the more they give, the more comes back to them.

Give it a try.  You don’t need a million dollars to make a difference.  In fact, it’s probably one of the best things to do while in pursuit of FIRE.  Giving tells your brain that you already have abundance and it allows you to appreciate the FIRE journey along the way.

Final Thoughts

Habits can literally make or break us.  So, the sooner you can lock in a good one, the better, especially since each is easy to do.  Which ones would you like to set and forget early on?

I do give my parents a lot of credit for instilling the love of reading into at an early age.  And, I am also happy that I set my own FIRE goals early on.

What really tips the scale in your favor is being persistent and taking action.  Get a big enough WHY and everything else falls into place.

Want more learn more Millionaire secrets? Check out this article on which profiles 25 millionaires and shares their favorite insights.

Readers, how many of these 8 millionaires habits are you already practicing?  Which ones do you need to start on/double down on?

Follow me

30 Comments on “8 Millionaire Habits that Will Feed Your FIRE”

  1. I noticed a long time ago, probably as early as middle school or elementary, the more I gave, the more I had. Mathematically it didn’t make sense – and there obviously must be a limit (for instance, if I donated my entire paycheck every pay period and never paid bills), but it actually works.

  2. I missed this earlier but I’m glad to reread it today and refresh myself on the two areas I need to focus on this year: 6 and 8. We’ve always given back but this year we’re much more intentional about giving more in keeping with our incomes even if our expenses are still quite high with the new house.

  3. Great list!! Reading various books helps you gain more knowledge and gets you inspired to create and accomplish your goals. I try to read 5 personal finance books a year along with a with self help books. It helps me be more aware of my finances.

    1. 5 personal finance books are pretty good! I’ve admittedly pulled back my reading consumption now with kids, but still find time occasionally.

  4. Great list. I’ve been working on reading more. Something that really helped me with this goal is leaving a book by my night stand. I usually would grab my phone and check my investments or do whatever. Now I make it a goal to read a chapter before I sleep, and that in itself helps me fall asleep too. Glad that the habit I’m forming can also lead me towards FI!

    1. That’s a great habit to read right before bed, Brian! There are probably lasting effects too as your brain processes the information you just read even while sleeping.

  5. Love it! Habits are so important for creating actions and developing behaviors that are invaluable for building wealth. I’m proud to say that I have all 8 habits (at least to some degree). I’m trying to read (and listen) more. And I plan to donate even more when I finally reach FI.

  6. Great list; I’m fortunate to have a couple of really nice libraries close by. We can book materials online and just go and pick them up. I also like to listen to audio books during my commute.

  7. Great habits! I read an article once that said if you persevere in doing something consistently for 8 weeks it will become a habit. So if anyone wants to cultivate any of these behaviours it’s totally possible. Just commit to it and hang in there for 8 weeks… your future self will thank you 🙂

  8. Protecting my time is the one I struggle with the most – I’m a ‘helper by nature’, but have to remember that its ok to say ‘No’! Great post!

  9. Great tips, Michael! I noticed in your list of books you mention “CASHFLOW Quadrant” – love that book. I’ve read all of Kiyosaki’s books, but that was the one that really inspired me to do something different.

    — Jim

  10. I’m like Mr. Freaky above. Those habbits got me here and here is a great place to be! Plus I can fish all I want now and you wouldn’t believe some of the fish I’ve caught in the three years since I retired.

  11. This is an excellent list!

    I had all these habits before I FIREd. I still have most of them, but I’m not so protective of my time anymore because I have lots of time to spare. 🙂

    1. That’s interesting, Mr. FF. I’ve found myself even more protective of my time in FIRE. I do the enjoy the freedom and flexibility though. 🙂

  12. Having a read of those habits, and feeling secretly chuffed with myself. I can confidently say I do them all, although I need to step up my game on a few. I see lots of people struggling with resilience and overcoming challenges I think society could do with a little nudge to get this on the agenda – change is coming, we need to be able to deal with it.

    1. You are right change is coming – it’s a part of life. The beauty in these habits is that they can weather any change and make a person stronger on the other side.

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.