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Personal Finance
15 Habits To Get You In the Top 10%
Be a financial outlier
The 14 Habits
1. Invest 15–25% or more of your income
That’s right. Not 10% of your income. 15–25%+ of your income. I always believe 25% is a better way to go, but that’s a personal preference. Your savings rate will grow as you acquire more income, and this will help you establish 5 things:
Financial security
Financial freedom
Financial peace
Financial discipline
Financial elevation.
Most people save nothing or save around 10% of their income. Those who save around 10% of their income often still end up broke when retirement comes around. How does that work? Because 10% of an average income will help you end up with average savings. Take the more aggressive approach when it comes to saving, and you’ll end up a little bit happier in the end.
2. Maintain a 2-year emergency fund
There is a minimum of 12 reasons to have a stocked and stacked 2-year emergency fund:
1: Peace of mind
2: Financial freedom
3: Mitigate job dependency
4: Be prepared for most emergencies
5: Have liquid assets that are easily accessible
6: Cover any living expense for 2 years
7: Recession-proof your finances
8: Focus on investing
9: Never be broke
10: A 3–6 month emergency fund goes by quickly
11: Have enough resources to more than scrape by
12: Take time off
3. Live below your means
This is the most salient financial habit to implement. If you implement this one habit, you guarantee yourself almost 99% success financially.
When you live below your means, you will always have money in the bank. You will remain out of debt, and you will never live paycheck to paycheck.
4. Live debt-free outside of business and real estate loans
Here are the most common types of debt [see immediately below]. You probably have at least one or more of these types of debts, or you’ve probably had one or more of these types of debt at some point. The majority maintains debt instead of eradicating debt.
Student loans
Car loans
Personal loans
Medical bills
Credit card debt – outside of capital utilized to expand your business.
Property loans – get others to amortize this debt for you.
You can do the opposite of the majority and live without debt; it’s an unusual way to live but also an exhilarating and liberating manner of living. Owe no one anything.
Proverbs 6:1–7 says, “If you’ve signed surety, my son, do this. Give no sleep to your eyelids, no slumber to your eyes, and deliver yourself like a gazelle from the hand of the hunter [..].” A powerful nugget of wisdom that we should implement.
5. Live below your means
Avoid lifestyle creep like the plague. Most people don’t live below their means because it’s ingrained to do the opposite.
Consumerism is an unspoken and widespread addiction.
We are fed the following messages:
We got to live the fabulous social media-worthy type of lifestyle.
We got to have the latest iPhone or iPad.
We got to have a life worth imitating.
We got to have the things we are taught to obtain to live a “fulfilling” life.
“So, concerning the things we pursue and for which we vigorously exert ourselves, we owe this consideration – either there is nothing useful in them, or most aren’t useful. Some of them are superfluous, while others aren’t worth that much. But we don’t discern this and see them as free when they cost us dearly.” – The Daily Stoic p 75
6. Enable your money to work for you through investing.
Investing allows you to utilize compound interest to your advantage, enabling you to save far more money than you could if you saved in a low-interest rate savings account. The interest rates you receive from investing most often far outweigh any money you earn in a savings account.
Investing is both a critical and powerful tool. You don’t have to have a degree in finance or economics to understand this. You also don’t have to be a financial genius to invest your money. All you need to do is find a solid, reputable financial firm or bank, or even start using your employer’s 401k option (if you are working or have this benefit at your job), and start investing your money today.
7. Consistently implement viable ideas to increase your income.
Something most people do not do is write down ideas when they come to mind. And since most people don’t write down their goals, most people definitely do not write down 20 ideas – to help them reach their goals.
Earl Nightingale said it best, “Men simply don’t think.” Instead, they spend most of their time watching the tube and wake up one day and realize they’re 65, and they’ve not tapped into their infinite potential by an inch.
Spend 10–15 minutes each day writing ideas that can help you reach your goals faster. Some ideas will be mediocre, some will be great, and some will be legendary. Don’t underestimate the power of an idea and writing things down.
Never cease increasing your income.
8. Increase your income sources – especially passive income.
Depending upon one basket of income is like betting your life savings on one horse. Maintaining multiple sources of income is one key to establishing a solid financial foundation (as far as income goes). None of us can ever predict the future 100%, so why do so many of us live as if we can?
What are your talents? What are you good at? What are you interested in? Be creative and find ways to capitalize on your talents and interests while also working your primary job(s). I suggest always having at least 3–10 different sources of income; if you find this to be too much to do, aim for a minimum of 2 different sources of income.
I guarantee that having multiple sources of income will:
Relieve financial pressure
Eradicate dependence on any one source of income or company
Give you more freedom
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Passive income streams (e.g., royalties from books, music, and other intellectual property, and real estate) are best because they generate money without you needing to invest time and effort consistently. Another popular option is to have a full-time gig and a part-time gig. Again, never depend on one source of income.
9. Educate yourself on everything finance to inspire new ways of thinking.
If you’re not learning, you’re not growing. Ignorance is not bliss. Read as if your life depended on it. The more you educate yourself, the better the life you’ll experience. Utilized Knowledge is power.
10. Surround yourself with wealthy individuals.
The majority doesn’t have $500 in their bank account to cover an emergency expense, which means the majority is one step away from being broke or already broke. I’m not even taking into consideration the fact that most people are also in debt. Establish some new relationships with individuals that can challenge your level of thinking and elevate your financial status.
11. Engage in entrepreneurship, and work for yourself.
The best kind of job is where you’re the boss, and you determine your earnings, schedule, benefits, income, and workload. Entrepreneurship gives you back the power to create your reality and set the tone for your financial future. At least one of your income sources should be from entrepreneurship.
12. Embrace minimalism.
Implementing the practice of minimalism will ensure you don’t buy things without a definite and meaningful reason.
I wrote an article called “Desires Make You A Servant” that belabors the idea:
If you want nothing, you have everything. You’re in control, and no one has leverage over you. Not businesses, advertisements, societal “norms,” people, or desires.
How often do we witness people buy the new car, only to watch them constantly work to pay for it? They have to keep working, and if they don’t, their car will be repossessed (not to mention their credit will get f*cked up).
Minimalism helps you avoid buying into the idea that you need to buy all the time, buy every day, and buy the things you don’t need.
“[…] in a society of ever-bigger houses and ever more possessions: [..] there’s a hidden cost to all of that accumulating.” – The Daily Stoic p 75
Our health (financial, mental, physical, emotional, and spiritual) and our peace are the hidden cost.
13. Study the top 1% of the wealthiest 1%; pick their brains.
Read articles and books, attend conferences, and learn from the top 1%. Not to attain the money they acquired, but to learn what works and what doesn’t work for business, finance, investing, habits, productivity, and entrepreneurship.
14. Think thoughts of wealth, prosperity, and abundance.
Something you won’t often hear from a person who is wealthy and has a wealthy mentality is: “I’m broke.” Wealthy people focus on prosperity, attracting more wealth, and think in terms of abundance.
15. Partner up wisely.
If your partner is not on the same page with you financially, there will be all kinds of trouble waiting for you up ahead. Find a like-minded individual who respects the benefits of having a healthy and educated mindset about money.
You Don’t Have To Earn Millions to Be A Millionaire
My Million. My Dream Home.
5 Pillars: Here’s How To Build Wealth
10 Steps To Live An Enriched Lifestyle
Do You Have A Positive Net Worth?
This content is for informational purposes only — not professional advice. Consult a qualified professional before making any major decisions.
This content is for informational purposes only — not professional advice. Consult a qualified professional before making any major decisions.