Top 10 Rich Habits: What the 1% Do Differently

“Your net worth to the world is usually determined by what remains after your bad habits are subtracted from your good ones.”

— Benjamin Franklin

Developing Rich Habits

The 1%: glorified by the media, touted by corporations, and cultivated in elite social circles, the global personification of the rich is nothing new. Ever since the dawn of modern economies, the rich have been put on a pedestal. They’re part of the seldom few that have figured out how to exit the rat race and live a life on their own terms.

However, for the most part, the popular belief is that the rich got rich by cutting corners; they got rich, not through perseverance, dexterity, and integrity, but through some other under-handed means. Somehow or someway, they did something that wasn’t completely aboveboard, or they got lucky. Maybe, they were in the right place at the right time. They most certainly didn’t work hard for what they have, right?


The truth of the matter is that the 1% foster a certain set of rich habits early on. They slowly build from the ground up, avoiding temptations, working hard, saving and investing their money for the future. They’re less interested in the here-and-now. They have control over their egos and they look at the pain-pleasure paradigm in the long-term rather than the short-term.

The Pain-Pleasure Paradigm?

Let me explain…

In life, we do more to avoid pain than we do to gain pleasure. The pain-pleasure paradigm runs our lives. This is why students wait until the last minute before cramming for exams and furiously writing papers. It’s also the reason why people put off doing their taxes until the week or night before they’re due. And so on.

We always do more to avoid pain than to gain pleasure, plain and simple. But, it’s a bit more involved than that. The pain-pleasure paradigm exists, for the most part, in the short-term. Genetically speaking, this is the selfish-survival instinct in us. It stems down to our roots of survival at all costs. But the mind also extends this past actual physical survival and more into the day-to-day living of life across all spectrums, including financial survival.

But, the difference between the 1% and the 99% is that the pain-pleasure paradigm is shifted from the short-term to the long-term. The 1% have cultivated their rich habits by flipping the pain-pleasure paradigm. They do more to push through pain in the short-term so that they can experience pleasure in the long-term.

This is the exact opposite of how most people live. We are always doing more to gain pleasure in the short-term. We do things like drink alcohol excessively, smoke cigarettes, eat fatty foods, spend frivolously, and so on. These are all in-the-moment-of-pleasure activities. The mind and body are reveling in the short-term pleasure.

So, how do we move past this?

Flipping the Script on Bad Financial Habits

The top 10 rich habits don’t develop overnight. They’re cultivated through moral guidance, upbringing, and a different financial outlook. Although the rich might be portrayed as having hit the jackpot, if you will, it didn’t actually happen that way. Someone in their lineage actually helped to develop and foster the habits to reach the 1% by leveraging the top rich habits for guiding their financial lives.

So, if you want to reach the 1%, or come close, you have to institute these rich habits over the long-term and not just the short-term. It takes years and years, even decades of focus and hard work. The 1% didn’t become the 1% by being lucky, in the right place at the right time, or through some under-handed means. They got there through the institution of these rich habits.

But, what are the rich habits and how can you institute them to get yourself out of debt and build a strong financial future for yourself and your family? Well, first thing’s first –  you have to flip the script on your bad financial habits first. And, you have to look at the pain-pleasure paradigm in the long-term, not in the short-term.

Well, how do you do that? 

Step #1 — Write Out the Cost of your Bad Habits

The first step to flipping the script on the pain-pleasure paradigm is to write out the cost of your bad habits. Why is that? Well, the ego has a clever way of shrouding its behavior within excuses and cleverly-disguised reasons. It says things like:

  • “It’s okay to buy this right now. I know that I have some debt, but I really need this because it’s on sale. If I wait any longer, I might lose the opportunity to ever own it at this price.”
  • “I know I need to save money, but spending $5 a day on a latte isn’t that bad. It’s really more of a hassle than anything to have to bring my own coffee to work every day. “
  • “My cigarette smoking isn’t that bad, especially since I don’t smoke that much. I only smoke half-a-pack per day so it doesn’t cost me that much. I’ll quit soon, but it’s not really doing that much to hurt me right now.”

Regardless of what your bad financial habits are, you have to write them out. The cigarette smoker that spends $10 every two days on a pack of cigarettes, is spending $150 per month. That $150 per month could be put towards savings or retirement. If you don’t take a financial accounting and write out your bad habits, your ego can continue to shroud its behavior in excuses and reasons.

Tally up the cost by keeping careful track of things. If you have a latte every day or you eat lunch out every single day, how much is that costing you per month? Remember, all costs add up when accumulated over the weeks and months. A $5 per day latte habit is costing $1825 per year. That money could be put away towards retirement.

While costs might seem low on a small-scale, they escalate when you look at them in the bigger picture. Rich habits might look minuscule at first, but when instituted over time, they can create tremendous results. These habits often require a mental shift in thinking. So, write out the cost of your bad habits so that you can’t hide from them.

Step #2 — Write Out the Reasons Why You Must Succeed

Financially speaking, what are your goals and what are your reasons for wanting to succeed? Do you really want it bad enough? If your bad financial habits are setting you back in life, and you can identify the actual cost that it’s inflicting on your future, why should you really care in the long run?

Without strong enough reasons why we must succeed, we won’t find the solutions to our woes. If you feel like there’s not enough time or money to go around, then you have to take a good and solid look at your habits. If those habits are setting you back, and you have a strong enough reason why you must succeed, then you can abolish those bad habits.

Flipping the script on your bad habits isn’t impossible. But, it can’t be done without a strong enough reason why it must happen. Without that, you’ll continue on with the emotion-numbing activities of engaging in just about anything that acts as a distraction in your life. Reasons come first and answers come later. Find a strong enough reason and you can flip the script on your bad habits.

Here are some examples for reasons to eliminate bad financial habits we saw in step #1:

  • “No, it’s not okay to buy this. Just because something is on sale, it doesn’t mean I need to own it. If I ever want to achieve my long-term financial goals and provide a worry-free financial future for my family, then I’ll put off this and other meaningless purchases today, saving and investing my money instead.
  • $5 a day on a latte is too much money to spend. Sure, right now it might seem like a small amount, but added up over the course of months and years, that habit can get expensive. I want my children to have all that they need in life, and have the security and freedom to do what they please. I can easily take coffee from home and save that money instead.
  • My cigarette smoking habit has cost me far too much money. If I stopped smoking, after a year or two of saving and investing, I could put that money towards opening my own business and finally becoming financially free one day. That means more to me than indulging in such a senseless waste of money.

Step #3 — Find a Daily Source of Motivation or Inspiration

Oftentimes, it’s easy to ignore what we don’t see. If you want to have rich habits, not only do you need some solid goals and to be able to eliminate your bad habits, but you also need to find a good source of motivation and inspiration. Because, we all get frustrated sometimes in the pursuit of our hopes and our dreams. It can get exhausting at times.

When we push and push and don’t see immediate results, the mind has a funny way of turning us against ourselves. We say things like, “Just one more time won’t hurt,” or “It’s not a big deal, we can save money from the next paycheck,” and so on. No, it is a big deal. Find a source of motivation or inspiration on a daily basis and don’t give up.

Never make excuses for breaking good financial habits. Never allow yourself to let go of your hopes and your dreams due to a little bit of frustration. Life is going to be hard. You’re going to get overwhelmed at times. But you can’t give up. As time passes, you’ll get closer to your goals, but if you throw in that proverbial towel, you’ll feel sorry later.

So, find a good source of motivation or inspiration. Search our articles or stories on people who you can relate with that succeeded in accomplishing their dreams. Find out what stumbling blocks those people had in the pursuit of their financial goals. No one got there by walking along easy-street. It was hard work. Never forget that.

Top 10 Rich Habits

Okay, so let’s just say you’ve managed to break some of your bad financial habits. Let’s say that you were able to eliminate some of the frivolous expenses that have been bleeding you dry on a monthly basis. Now what? What are the top 10 rich habits that the 1% institute consistently over time?

Rich Habit #1 — Save 20% of your Income

Some people might think that saving 20% of their income is nearly impossible. Well, let me tell you that it’s not. And, if you feel like saving 20% of your income is going to be virtually impossible, that’s all the more reason why you must do so. If you’re living paycheck-to-paycheck, you might find this very difficult. But, there are always ways to cut your expenses.

Rich Habit #2 — Track All Expenses

Most people track their favorite sports teams. They can list off all the statistics about their favorite ball player. From basketball, to football, to soccer, and every other sport in between, the whole world is obsessed with their favorite teams and players. But, most people also can’t tell you the first thing about their expenses. You have to track your expenses, down to the last penny, if you want to live like the 1%.

Rich Habit #3 — Pay Down Debt

If you’re accumulating debt every month and not paying it down, then you’re most certainly not employing one of the sacred rich habits. Paying down and paying off debt should be a top priority. If you’re not in the green every single month, then there’s a major problem. Immediately make a plan to pay down and pay off your debt, rather than think about ways to accumulate more of it. Focus on your highest interest credit cards and loans first, then move to the second highest ones, and so on, until all of your debt is paid off.

Rich Habit #4 — Immediately Open Bills

Do you have a tendency to ignore your bills when they arrive? Do you have a secret place that you stash them so that you don’t have to look at them? This is the general tendency we have, especially when we’re living in the red. When we can’t afford to keep up with our monthly payments, we prefer not to look at what’s due. This makes it easier for the ego to allow us to engage in those emotion-numbing activities that include overspending. But, you have to open up your bills immediately when you receive them. Don’t ever hide from them.

Rich Habit #5 — Pay On Time, All the Time

Never pay your bills late. This is one of the most important rich habits. When you pay bills late, your credit suffers, but so does your sense of self respect. No one wants to feel like they’re running away from their obligations. Don’t ignore bills that are due. even if you can’t afford to pay all of what’s owed right at this moment, call your creditors and make a plan. Don’t hide. Change your financial lifestyle and focus on getting rid of debt rather than accumulating more of it.

Rich Habit #6 — Audit Expenses Monthly

One thing that some people fail to do is to audit their expenses. Do you save all of your receipts and compare them against your credit or debit card statements every single month? You would be surprised just how many errors you will find if you cared to look. You have to audit your monthly expenses and ensure that what’s going out the door is actually what’s owed by you. Make it a habit to get organized, financially speaking, and stay that way. This will also help you to budget better as time goes on.

Rich Habit #7 — Budget, Budget, Budget

You have to ensure that you budget yourself on a monthly basis. If you don’t know how much money you can spend, it’s easy to overspend. Don’t count on tomorrow’s income to pay for today’s expenses. Create a real budget and stick to it. Ignore your peers and others who coax you into spending more than you can afford to. Worry about yourself, make a plan, create a budget, and stick to it.

Rich Habit #8 — Invest in your Home

For most people out there in the world, their personal home is their biggest investment. If you don’t own your own home, then you’re breaking one of the cardinal rules of the 1%’s rich habits. Ensure that you own your own home and you invest in your home wisely. Upgrade the important parts such as kitchens and baths, and over time, it will pay off handsomely.

Rich Habit #9 — Invest & Track Savings

Now that you’re saving 20% of your income, it’s important that you put that money somewhere wise. Be sure to diversify your investments and track them on a monthly basis. Study up on where your money is and just how well its faring. Don’t obsess, but also, don’t forget. And, never spend your investment funds on frivolous purchases. The 1% are able to live off of the interest that their investments bring in, but they didn’t start that way. You have to build slowly over time.

Rich Habit #10 — Mind Your Own Business

The last, but not least, rich habit is to mind your own business. Mind your own business, you ask? Yes. If you presently work for someone else, then it will be fairy difficult for you to join the 1%. Sure, it does happen, but it’s much more rare. Save up 6 months of living expenses and start your own business, and build it. Over time, you’ll see that business grow and your financial stresses will easy. But it won’t be easy; it never is.