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The 15 Financial Habits of Ridiculously Wealthy People

Learn to make smart financial decisions and practice smart financial habits every day.

By Katelyn Washington

Edited by Rachel Siegel

Updated Dec. 7, 2024

Wealthy people stay wealthy for a reason. Making occasional financial mistakes shouldn't destroy your wealth. But everyday money habits can make or break your bank account over time.

Try making these habits part of your lifestyle if you're dreaming about retiring early or want to increase your net worth.

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Stay up to date on economic conditions

Growing your wealth requires you to stay current on financial topics. Interest rates, laws, regulations, and stock market conditions can change over time.

You might decide you need to make adjustments when changes occur. If you don't, you could lose opportunities to make more money.

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Grow passive income

Wealthy people look for ways to work smarter, not harder. Growing a stream of passive income such as dividends, interest, rental, or royalty income can allow you to make money without taking on an extra job.

However, not all passive income streams are truly passive. You'll need to consider the time and effort required to start and maintain a new venture.

You'll also need to invest in some assets, such as stocks, bonds, or real property, to create that passive income stream.

Set financial goals

You can't form a plan for achieving your goals until you've identified what they are. It helps to make short- and long-term financial goals. You'll feel more accomplished whenever you reach a milestone, and it will encourage you to keep going.

Wealthy people don't get discouraged and abandon their financial plans if they make mistakes. Brush it off as a lesson learned, and continue working toward increasing your wealth.

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With that amount, you could build a relatively diverse portfolio with an investment of $50 in a big tech stock, $50 in a retail stock, $50 in an energy stock, $50 in a manufacturing stock, and $50 in a bank.¹ This content is for informational purposes only, you should not construe any such information as legal, tax, investment, financial, or other advice. To get stock reward, new customers need to sign up, get approved, and link their bank account. Stock rewards shares cannot be sold until 3 trading days after the reward is granted and the cash value of the stock rewards may not be withdrawn for 30 days after the reward is claimed. Stock rewards not claimed within 60 days may expire. See full terms and conditions at <a href="https://robinhood.com/us/en/support/articles/open-account-pick-your-stock/">rbnhd.co/freestock</a>. Fractional shares are illiquid outside of Robinhood and are not transferable. Not all securities available through Robinhood are eligible for fractional share orders. For a complete explanation of conditions, restrictions and limitations associated with fractional shares, see the Fractional Shares section of our Customer Agreement. Robinhood Gold is offered through Robinhood Financial LLC and is a membership offering premium services available for a fee.

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Follow a budget

Budgeting is pretty basic, Personal Finance 101, but following one can prove difficult. As you earn raises or create additional revenue streams, you'll want to start spending more.

But try to resist the temptation of lifestyle inflation if you want to improve your financial circumstances. Save or invest that "extra" instead.

Make good investments

Wealthy people understand they shouldn't keep all their money in a savings account. They invest some of it instead. This way, the money is always working to create even more.

Of course, investing only increases your wealth if you make the right investments. Millionaires know how to invest for the biggest returns, and they also get good advice. You should take the time to learn about and understand investments before you make any yourself.

Take advantage of benefits

Not all employees take full advantage of employer-offered benefits. And others might miss out because their current employer doesn't offer them.

Aside from health insurance, employees should look for bonuses, life insurance, 401(k) matching, an HSA, and even stock purchase options. Changing jobs could result in a higher salary and additional benefits.

Grow Your $$: 11 brilliant ways to build wealth after 40

Save for emergencies

An emergency safety net can prevent you from needing more costly alternatives should you suddenly need cash.

In an emergency, you don't want to be forced to take early withdrawals from your retirement fund, take out a personal loan, or rack up credit card debt — all of which come with extra fees that will put a dent in your budget.

Try to keep three to six months of living expenses in an "emergency" account before you focus on investing.

Strategize for taxes

People who make a lot of money avoid paying more taxes than necessary. They know how to take full advantage of deductions and work with a qualified tax preparer to ensure they keep as much of their money as they can.

Doing your taxes on your own might save you a few hundred dollars and may be the best option for people with fairly simple returns. If you go this route, make sure you understand tax laws and regulations so you don't overpay.

Most of the best tax software can help you maximize tax savings as well as file electronically.

Ask financial professionals

To make the most of their money, wealthy people work with financial advisors and other professionals. It saves them a lot more money than they spend on the services.

Millionaires won't take financial advice from the average person, and you shouldn't either. Advice from family and friends is often outdated or wrong, even when they have the best intentions.

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Live below their means

You probably know you shouldn't live above your means, but living below them is how you grow your wealth.

You don't want your bills and everyday costs to eat up your entire salary. If you're spending your whole paycheck every month, you could get stuck living paycheck to paycheck. Instead, spend less than you could afford to.

Make smart purchases

Buying cheaper but lower-quality items and making impulsive purchases can damage your financial health. Wealthy people buy things that last and take the time to consider large purchases before making them.

Consistently monitor finances

Wealthy people don't forget about their investment portfolios or growing expenses. They constantly reassess their financial situation. This can help catch problems early and give them the opportunity to make changes if they need to.

But they don't obsess over their finances, either. That can lead to classic investment mistakes, which are motivated more by fear, regret, and/or other human frailties than by reason.

Supercharge your investments: See what could happen if you add fine art to your investment portfolio

Use less credit

Paying interest when you don't have to is a huge waste of money. When you can afford to pay in cash, do it. Or pay off that credit card before you use it.

If you can't, consider whether or not you actually need to make the purchase. You might find that it's better to save a little each week and buy the item with your own money instead.

If you do need to use a credit card, make sure it's a low-interest one and try not to carry a balance from month to month.

Take educated risks

It will be hard to significantly grow your wealth without taking any risks. But make sure you only take educated risks. Playing it safe can prevent you from making more money, while taking on too much risk could cause you to lose a lot.

Hire help when it makes sense

Many people have busy schedules, sometimes with a full-time job and multiple side hustles. So while you could save money by building that deck yourself, consider whether your time is really worth it.

People can become so hung up on saving money and creating "sweat equity" that they fail to realize they could have come out ahead (doing something else) if they paid someone else to do the task at hand.

Unless it's a labor of love, if you're paying less than you can earn in that hour, it may be worth it to buy their labor.

Bottom line

Growing your wealth takes time and effort. One of the best things you can do to keep more of your money is to pay off your debts. You'll avoid paying all that extra money in interest and fees and can use it to make investments instead.

While not everyone can become ridiculously wealthy, adopting these daily habits could increase the wealth you have and make your life much more fulfilling, or at least less stressful.

More from FinanceBuzz:

Invest in Paintings by Basquiat, Picasso, Banksy

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