Building wealth isn’t about winning the lottery or landing a six-figure salary right out of college. According to research on millionaires and financially successful individuals, becoming wealthy is more about consistent behaviors than lucky breaks.
As money expert Clark Howard explains:
“What living on less than what I make gives me is CHOICE. It gives me the ability to say what I feel about a company that I’m not happy with and you wonder: ‘How does he say that? He could lose his job!’ So what? You have to be willing to stand up for what you believe and financial independence makes that more possible.”
Here are the seven money habits that separate those who build lasting wealth from those who struggle financially, regardless of income level.
1. They Live Below Their Means (Not At or Above)
Wealthy people don’t just avoid living above their means; they intentionally live below them. This creates what financial experts call a “wealth gap” between earnings and spending.
As Clark emphasizes: “I want you to really think through the fact that the key to having financial security in your life is living on less than what you make.”
This doesn’t mean living like a pauper. It means making conscious choices about which expenses truly add value to your life and eliminating the rest. A person earning $60,000 who lives on $45,000 will build more wealth than someone earning $100,000 who spends $105,000.
One of the biggest wealth-killers is lifestyle inflation, or the tendency to increase spending whenever income increases. Wealthy people resist this by maintaining modest lifestyles even as their income grows, funneling raises and bonuses into investments instead of bigger houses and fancier cars.
2. They Pay Themselves First
Wealthy people treat savings like a non-negotiable bill. Rather than saving whatever’s left at the end of the month (which is usually nothing), they automate transfers to savings and investment accounts as soon as their paycheck hits.
So how do you start? Set up automatic transfers to occur on payday. Even if you can only start with $25 per paycheck, the automation removes the temptation to spend that money elsewhere. As your income grows, increase the amount but never decrease the automation.
This habit works because it removes decision fatigue. You’re not relying on willpower or discipline each month; you’re making the choice once and letting automation handle the rest.
3. They Avoid Consumer Debt Like the Plague
People who build wealth understand the mathematical reality of high-interest debt: It’s nearly impossible to get ahead when you’re paying 18-25% interest on credit card balances.
Wealthy people use debt strategically (like a mortgage on an appreciating asset) but avoid it for things that lose value quickly. Credit card debt for vacations, meals, and consumer goods is a wealth-killer they steer clear of.
What about significant life purchases like a car? Most people do need to finance a vehicle at some point, and that’s okay — if done wisely. Clark recommends keeping car loans to 42 months or less. The problem isn’t necessarily the car loan itself. Instead, it’s the 72- or 84-month loans that keep people in debt for six or seven years on a depreciating asset. By the time those loans are paid off, the car often needs major repairs or replacement, trapping people in a cycle of permanent car debt.
4. They Invest Early and Consistently
Time is the secret ingredient in wealth building, and wealthy people start investing as early as possible — even with small amounts — to harness the power of compound growth.
Consider this: Someone who invests $300 per month starting at age 25 will have approximately $1.1 million by age 65 (assuming a 10% average annual return). Someone who waits until 35 to start would need to invest $700 per month to reach the same goal. That 10-year delay more than doubles the required monthly investment.
Wealthy people typically use low-cost index funds and avoid the trap of trying to time the market or pick individual stocks. They invest consistently through market ups and downs, understanding that time in the market beats timing the market.
5. They Continuously Increase Their Financial Education
Wealthy people never stop learning about money. They read books about investing, listen to personal finance podcasts, understand tax strategies, and stay informed about economic trends that might affect their finances.
This doesn’t mean they’re glued to CNBC or obsessing over every market fluctuation. It means they invest time in understanding:
- How different investment vehicles work
- Tax-advantaged strategies to keep more of their money
- Ways to increase their income through skills development
- How to protect their wealth through insurance and estate planning
Every financial principle you learn can save or earn you thousands of dollars over a lifetime. Wealthy people view financial education as one of their highest-return investments.
6. They Think Long-Term
Perhaps the most significant difference between those who build wealth and those who don’t is the time horizon. Wealthy people make decisions based on long-term outcomes rather than short-term gratification.
This manifests in countless ways:
- They invest in appreciating assets rather than depreciating ones
- They choose careers with growth potential rather than just the highest starting salary
- They maintain emergency funds to avoid derailing long-term plans for short-term crises
- They focus on building skills and relationships that will compound over decades
Research shows that the ability to delay gratification is one of the strongest predictors of financial success. Wealthy people have developed this muscle through consistent practice of thinking long-term.
7. Build Multiple Income Streams (Optional)
This habit isn’t essential. You can absolutely become wealthy by simply living below your means and investing consistently over time. However, many people who build significant wealth do something else: they find ways to increase their income.
The math is simple. If you earn $60,000 and save $10,000 annually, you’re saving 16.7% of your income. But if you increase your income to $80,000 while keeping your lifestyle the same, you can now save $30,000 annually, which triples your wealth-building rate without cutting a single expense.
This income growth can come from many sources:
- Investment income from stocks, bonds, and real estate
- Side businesses or freelance work
- Rental income
- Royalties or passive income streams
The key is that you’re not trading more time for money in a linear way. As Clark says about investment real estate: “That’s a way you can make money over time. Not all at once, but you can get rich slowly.”
Beyond acceleration, multiple income streams provide protection. If one income source disappears, others remain. This reduces financial anxiety and creates more options in life. But remember, this is the accelerator, not the engine. Master the six core habits first, then consider adding income streams to speed your journey.
Building Wealth Is Simple, But Not Easy
Notice what’s not on this list: winning the lottery, day trading, cryptocurrency speculation, or inheriting a fortune. While these things can create wealth (or more often, destroy it), they’re not reliable paths for most people.
The real path to wealth is straightforward but requires discipline: spend less than you earn, invest the difference consistently, avoid bad debt, keep learning, and give your money time to grow. There’s no secret formula or get-rich-quick scheme, just smart, consistent choices over a long period of time.
The concepts are simple. But executing them consistently over decades? That’s where the challenge lies. It requires saying no to immediate gratification, maintaining discipline when friends are upgrading their lifestyles, and staying the course when the market drops. Simple to understand, but not easy to do.
Wealth building is a marathon, not a sprint. The best time to start was yesterday. The second-best time is today. The goal of these habits, if you follow them, is for you to have financial security in your life.
