At one point, the “rich” were looked up to in society. We saw their accomplishments and thought, “one day I’m going to be rich and have that life.”

Today, “rich” has become another “4 letter word” often causing as much contempt as it does respect. And, while we can spend time begrudging those who have more than us, it’s more useful to focus on what we can learn from the rich. What habits or ways of thinking can we incorporate into our life to make it better from a financial perspective?

Secrets of Rich People – 6 Habits

Secret 1: Pay Yourself First!

Paying yourself first means before you spend a dollar of your paycheck, you route a specified amount of money into savings. The rich do this because they care about their future selves just as much as their current selves. If you think about it, investments are just “future spending” without having to work for it — which sounds like a really smart idea.

Here are two “pay yourself first” tips:

• • Invest in your company 401k plan. If you’re already investing, increase it by 1% every year for the next 5 years. You will hardly notice the 1% increase now, but it will make a significant difference in the future.
  • Set up direct deposit to a separate savings account at an online bank. This builds the habit of “paying yourself first” while giving you a get-out-of-jail-free card if you need the money.

Secret 2:  They Don’t Obsess About Budgets

No, this doesn’t mean all wealthy people keep a watertight budget. Hardly. It does mean they know their most important numbers. This includes how much to save, how much debt is reasonable, and how much they can afford to spend.

Ask yourself, do you know your numbers? If not, check out this blog Budgets are Bullshit.

Secret 3: Aren’t Afraid to Invest in Themselves

Investing in yourself and those you love is just as important as investing in the stock market or real estate. The rich invest in workshops, seminars, and gurus to help them in their careers and to build their skill set. They invest in their children’s education by sending them to quality schools or for tutors. They invest in their health by hiring personal trainers or nutritionists.

How you can emulate them:

• • Put money aside for continuous learning. Whether this is an investment in an online course or traveling to a conference in your field of expertise – learning new skills and networking is always worth the money.
  • Start saving for your children’s education early. This will help to ensure that you have a healthy amount stashed away by the time they’re ready to go to college.
  • Take care of yourself. You don’t need to hire a personal trainer or professional chef — you do need to eat healthy food and exercise regularly. Not only is this an investment in your physical well-being but it will also help you to avoid the high cost of future healthcare bills.

Secret 4: They Don’t Care What Their Friend’s Post on Social

FOMO (Fear Of Missing Out) or keeping up with the Jones’ is a killer habit — and it is most definitely a habit. Those who engage in this way of thinking (and spending) don’t just do so in one area of their life — it’s a common thread. Not only do they own the fancy car, they also need the huge house, the fancy clothes, and the swanky jewelry.

If you want to be rich then just say “no”. It might sound like obvious advice but it’s worth saying. To ensure you can afford these higher-end purchases, apply a few rules of thumb:

• • Pay cash for your cars
  • Save at least 15% of your GROSS (before tax) income
  • No credit card debt

While it’s not a foolproof plan, it’s a good start.

Secret 5: They Call In The Professionals

The rich understand the importance of making smart decisions, not only with their money but in all areas of their life. This means working with other professionals and subject matter experts to help them make the best decisions possible. They aren’t afraid to pay for professional help to avoid a bigger mistake by going it alone.

Having a team of professionals at your beck and call may not be feasible, but knowing when to pay someone for their knowledge and when not to is important.

For example, if you have a complicated tax return, it’s worth it to pay a CPA to ensure it’s done right and avoid an unnecessary heart-to-heart with your local IRA agent. Or, if you want advice on how to invest your money and save for retirement, it may be worth it to speak with a financial advisor.

Secret #6: Aren’t Afraid to Fix ‘er Up

I know I just proclaimed the importance of hiring help, so this might sound like contradictory advice. When it comes to complicated financial or legal decisions, leave it to the professionals. When it comes to troubleshooting your slow computer or painting your bedroom, these are things you can do by yourself in order to save money.

Before you become a “do-it-yourself master,” make YouTube and Google your new best friends. As you probably already know, you can learn almost anything on the internet. Instead of starting by making a phone call to your local fix-it-man (or woman), give it a shot yourself.

A small word of caution – when it comes to fixing anything that could be dangerous (like something electrical), it may be best to leave it to the pros. Safety first!

Some safe examples of things you can fix on your own:

• • Computer repairs
  • Small car repairs, issues (oil change, replace your tail light)
  • Household maintenance (fix a leaky faucet, painting)
  • Exterior maintenance (lawn mowing, snow removal)

Start living your rich life – NOW

If you have dreams of being financially free and living the “rich life” then start incorporating these 6 habits. Building wealth doesn’t happen overnight but with some hard work, discipline, and time it is achievable.

To learn more and access a FREE Session or our Money Like Never Before Course click here.

You may be familiar with the term “cleanse.” It’s often associated with eating habits.

For example, many use a cleansing strategy from time to time to clean up their diet. Maybe they’ve gotten out of control with their eating habits (which often happens during the holidays) and they need a little something extra to reign it in.

Going on an uber-strict cleanse for a short period of time can be an effective strategy for breaking bad eating habits. It allows us to hit the reset button and start making healthier eating decisions.

The reason a strict cleanse works is you have well-defined terms of engagement and only have to commit for a short period of time. It’s a way to narrow the guardrails of your food choices so you can realign them (less chocolate and more veggies) with your goals of living a healthy lifestyle. You know you won’t be eating this way for long so your ability to stick with it is higher than traditional diets.

The same cleansing concept can be applied to your spending. When you feel like your spending is out of control, a spending cleanse can help you to hit the reset button so you can eliminate your bad money habits.

Three ways to cleanse your spending

If you’re ready for a financial reset, here are three simple strategies to cleanse your spending and get your finances back on track.

1. Go cold turkey

Going on a spending cleanse is a simple concept but it can be difficult especially if you go “cold turkey.” With the “cold turkey” method, you halt all spending for the next 30 days. It’s the simplest (and most effective) method because it’s black and white – no spending on anything outside of mandatory payments. Mandatory payments include things like your mortgage, utilities, and car payments.

If you’re wondering, “what about groceries?” Yes, you still need to eat, but there are different rules of engagement.

The first and most important rule is to eat the food you already have on hand.

If you’re like most American households, you have enough food in your fridge and pantry to feed you and your family for at least two weeks, if not the entire 30 days. Yes, you will need to get creative. You’ll need to eat in a different way especially as you work your way through the pantry. Beans on toast or plain pasta with butter, salt, and pepper might not sound appealing, but they’ll fill your belly.

The point of the 30-day cleanse is to save you money. If you’re doing it right, then it should feel uncomfortable and challenging. But remember, it won’t last forever. It’s just 30 days!

Pro tip: To help ease the pain, you can also do a little stocking-up before your 30-day cleanse starts. Buy lots of fresh or frozen fruit and veggies as well as milk or any other perishables that will allow you to maintain a balanced diet.

2. Only spend on key categories

If the cold turkey method sounds too intimidating, you can opt for the middle-ground option. With option two you stop spending on everything outside of a few key categories. It’s up to you to decide what these categories are before you get started.

For instance, if you can’t stomach the idea of eating beans on toast or buttered pasta for the last week of your cleanse then choose fresh groceries as one of your key categories. Another example might be your gym membership. If this is something that keeps you active and feeling physically and mentally strong then you can deem it as one of your key categories.

When deciding what should be included as a “key category,” remember these should be things that are necessary for your physical or mental well-being. You should not be making exceptions for discretionary spending like buying new clothes or finally deciding to go “exclusively organic” on your grocery shopping.

Once you’ve set these key categories there is no deviating. You are locked in for the next 30 days with no spending on anything outside of your mandatory bills and your few, pre-established key categories.

3. Cut out frivolous spending

For those who are unsure of whether or not they want to participate in a spending cleanse or those who are new to the whole “cleanse” concept, option three offers a mild introduction.

With this option, you simply cut out all frivolous spending for the next 30 days. This is the least strict of the three strategies.

Before your 30-day cleanse, you decide which frivolous expenses you are willing to do without. Maybe no spending on clothes, beauty products, or toys for your kids or pets. Perhaps, you also take all food delivery services off the table or scrap one/two/three of your subscription services. You could “just say no” to all online shopping and force yourself to kick it old school and go to the store. There are many ways to curb your spending without going to extremes.

With option three, you have more leniency in terms of what you cut but once you make a decision, it’s set-in stone. No exceptions for 30 days. With this option, you won’t save as much money as you would with the other two strategies, but it’s a good start and worth doing.

Are you ready to cleanse your spending?

Going on a 30-day spending cleanse is a great way to shake things up and eliminate some of your bad money habits. Because it’s a commitment for a pre-determined and short amount of time, it’s doable. You’re not committing yourself to a year or lifetime of restricted spending, just 30 little days.

Additionally, because you’ve already set predetermined boundaries for what you can and cannot buy, you greatly reduce the chances for the dreaded impulse buy or the opportunity to convince yourself you “need it.” If it’s not on the list, you can’t buy it. End of discussion.

So, what do you think? Are you ready to go cold turkey or will you ease yourself into the process by removing all of your frivolous spending for the next month? In all honesty, it matters less which option you choose just as long as you choose.

“What happens if you don’t choose,” you ask? Well, most likely … nothing. But, if you’ve read all the way to this point, that’s probably not a good thing.

You Only Live Once, So Plan Well

Since the end of January, #YOLO has been a rallying cry on internet message boards where amateur investors drove up stock prices for video game retailer GameStop and movie theatre chain AMC. While everyone should have opportunities to build wealth via the markets, we believe this particular group of rebels are only half-right about their investment strategy.

It’s true “you only live once,” and you need to make the most of the financial opportunities available to you. But that’s exactly why we prefer measured, long-term financial planning to short-term speculation.

How much could you earn? How much could you lose?

Setting aside the larger implications of #YOLO for our financial system, let’s focus on the individual.

Yes, some GameStop and AMC investors cashed out large multiples of their initial investments. But many others let their investments ride hoping for even greater returns and lost big. Still, others came late to the party and bought in at much higher prices than the original investors did. When these original investors decided to cash out quickly, prices fell dramatically resulting in catastrophic losses for some investors.

While we generally support folks getting more interested in investing, managing your financial affairs using apps and message boards isn’t the soundest of strategies. Case-in-point: a second wave of investors who thought they were joining the movement to boost AMC Theatres mistakenly purchased stock in the AMC television network. Seriously. You can’t make this stuff up.

Short-term gains or long-term prosperity?

While making a couple thousand bucks overnight sounds exciting, that ROI is no match for the wealth-building power of a balanced, diversified financial plan.

The small investments many of the #YOLO crowd cashed out could potentially be compounding by 10% annually had they invested in the S&P 500 rather than the hot stock of the moment. Hopefully, some #YOLO investors will reinvest their earnings in plans that will help them create a more secure financial future.

But that leads to another problem with #YOLO: creating secure financial futures wasn’t really part of the plan.

Some folks wanted to make a quick buck. Others, nostalgic for the pre-COVID days of shopping at the mall and going to movies, wanted to support struggling companies they love. And still, others just wanted to “stick it” to Wall Street firms who were betting GameStop and AMC would continue to struggle; they thought it would be fun to shake up a system they perceived as rigged against them.

What’s your plan?

Rather than debate the merits of these motivations, let’s think about the things that aren’t on this list of reasons to #YOLO:

• Buying a new house
• Sending kids to college
• Paying down debt
• Topping off an IRA or 401(k)
• Starting a small business
• Supporting an infirmed parent
• Saving for a dream family vacation
• Moving to the ideal retirement destination

There are many reasons to invest your money. For most of us, it should be to accomplish goals that require money like the list above. Seems obvious, but people often lose sight of the most obvious things especially when it comes to money.

As for the other reasons – “make a quick buck,” “stick it to Wall Street,” or “I love that company” – leave that to those with money to burn as that’s the most likely outcome.

In Part 1 of this series, Dr. Kurland and Commander Sears shared three habits they believe will help us build momentum as we – hopefully – move towards the end of quarantine and back to life as we knew it. By focusing on the present, embracing the positive, and leveraging our relationships and routines, we’ll be better equipped to manage short-term stress and start progressing towards big picture goals.

Part 2: Growth Through Adversity

Utilizing those habits could also help us to readily absorb the most meaningful lessons from the quarantine experience. Here are four ways to continue learning and growing to make our communities, jobs, and lives better after Covid-19.

1. Appreciate the small things

“One of the things I’m hearing from a lot of people is there’s a greater appreciation for things that they may have taken for granted,” says Dr. Kurland. “Appreciating family, appreciating acts of kindness and noticing those things more. I think another thing is just a slowing down of lifestyle, being home more, and more time spent with family members.”

If you can relate to what Dr. Kurland is reporting, you’ve probably started to think about how to take some of the grind out of your days once the country reopens. As many companies consider more permanent working from home arrangements, you might still get to enjoy those extra daily meals with your kids. You might keep up the weekly video chats that have brought you closer to your extended family. And you might make those simple moments of quiet that allow you to think, de-stress, and reflect a permanent part of your daily routine.

2. Valuing social bonds

Zoom, Slack, and social media have helped bridge the gaps between us, our friends, and colleagues. But they’ve also reminded us of all the things virtual communication can’t replicate.

“You rely on other people more than you think,” says Commander Sears. “You bounce ideas off them, you receive feedback from them. Social media is an illusion of social interaction that allows people to hide behind a barrier. About 90% of communication is nonverbal. When you’re with other people, you’re picking up different cues. Those are giving you approval or disapproval. They’re giving you a sense of belonging to a group. I think people miss that and are realizing how important it is.”

It’s likely workspaces and recreational facilities are going to look very different after quarantine. But considering how much we’ve been able to accomplish virtually, sharing physical space with co-workers, friends, and family again could give our productivity a big boost.

3. Finding your limits and growing your empathy

Although the pandemic has been defined, in large part, by the things we can’t do, we’ve all learned a lot about what we can do as well. From big accomplishments like managing a revised household budget to little joys like learning to bake or play an instrument, we’ve adapted to these challenging circumstances and, in many cases, found ways to thrive.

But even though we experienced the pandemic together, you probably noticed people were processing quarantine in very different ways. As we’ve bumped up against and often surpassed our own limits, we’ve gained a better understanding of how others are coping.

“Through my experience in the SEAL teams, I learned there is no absolute volume that people can take of stress,” says Commander Sears. “Everybody has their own-sized cup that they can take. It helps you develop empathy towards others. What doesn’t stress me out at all may not have the exact same relative impact to somebody else. That doesn’t mean they’re experiencing something different than me, it means that their cup can only handle so much. Encouraging empathy and not expecting the mirror imaging of what you can take is something that I’ve really learned. Remember everybody has their own capacity, neither good nor bad, for taking stress in and dealing with it.”

Adds Dr. Kurland, “I think there’s an opportunity for each of us to really look at, in what way can we contribute? Who’s one person I can serve or reach out to or help or support? And not undervalue the impact for both people. We know from the research that, when we help others, it also feeds back in a positive direction to us. But also that being the recipient of even one person reaching out to you can make a huge difference in one’s well-being.”

4. Improving your Return on Life

The Covid-19 pandemic will be a “before and after” moment for this generation, not unlike 9/11 or the Great Depression. Our government leaders and health care experts will have a challenging time determining the safest ways for us to get back to living and working in public.

But privately, we have an unprecedented opportunity to make some major changes in our lives as well.

Commander Sears says, “Some of my colleagues in the military and on Wall Street, they had a chance to get off the hamster wheel, and so now they’re telling me, ‘Holy cow, what was I doing? All this busy work was overwhelming my life. I wasn’t taking part in life or enjoying it. I was just running after the cheese nonstop.’ Now that they’ve had a chance to get off the wheel a lot of people are reevaluating some of the priorities in their life, and I think it’s for the better.”

Dr. Kurland agrees. “I think that there is an opportunity to really evaluate and think about how to take this as an opportunity,” she says. “To ask ourselves, ‘How do I want my life to look as I move forward? What is it that I most value? What are the things that are really important to me?’”

As we all transition through this challenging time, remember that we’re here to help you answer those questions and work with you on a plan for a greater Return on Life.
We understand transitioning back to living and working outside of your home is going to present its own set of challenges. We hope the expert strategies discussed here will help you approach those challenges from a more positive place.

Do you know what your credit score is? Are you looking to improve it?

I know, talking about credit, credit history, and credit scores doesn’t rank high on most people’s list of fun conversations. And yet, your credit score is something you should be talking about or at least aware of because it’s really important.

Your credit score is the number creditors look at when considering everything from the interest on your car loan to the type of credit card you’re eligible for to whether or not you can get a mortgage. It can even affect your car insurance rate. Different lenders will have different criteria for lending but anytime you want to borrow money, your credit score will be part of the equation.

Even though it’s not the sexiest of money topics, let’s talk about credit scores! So, what is a credit score and, if you have a less than stellar score, how can you improve it?

What is a credit score?

Your credit score is a number used by lenders to determine how likely you are to repay your debts. Credit scores range from 300 up to 850. The lower your score the riskier you are to lenders. Those with lower credit scores pay significantly higher interest rates than those with higher credit scores. A low credit score can cost you tens of thousands of dollars over time.

The most widely used credit scores come via the Fair Isaac Corporation and is more commonly referred to as your FICO score.

A FICO score of 800-850 is considered excellent, 740-799 is very good, 670-739 is good, 580-669 is fair, and 579 and below are considered poor.

If you have good or excellent credit, lenders are more likely to loan you money and at better rates. Those with fair or poor credit scores are seen as riskier to lenders, have a harder time borrowing money, and at much higher interest rates.

Your credit score is composed of 5 different categories each with a different weighting:

• Payment history (35%) – do you pay your debts on time or do you have a history of late payments?
• Amount owed (30%) – how much debt do you already have on the books and how much of your existing credit are you using?
• Length of credit history (15%) – those with longer credit histories are viewed as more reliable than those with shorter credit histories. This makes sense. If you have a longer credit history, it gives lenders more data from which to measure behaviors. It’s one thing to pay your bills on time for one year, it’s another to pay your bills on time for twenty years.
• Credit mix (10%) – creditors consider your mix of different types of loans. Mortgage, credit cards, auto loans, etc.
• New credit (10%) – research shows opening multiple credit accounts in a short amount correlates with a higher risk profile

If you’re unhappy with your credit score there are things you can do to improve your number.

Here are some creative ways you can improve your credit score.

Disclosure: This post may contain affiliate links at no additional cost to you. We understand being a trusted resource means being able to stand behind the products and services we affiliate with. We try our best to keep things fair and balanced in order to help you make the best choice for you. All opinions expressed here are our own.

6 creative ways to improve your credit score

1. Do a self-assessment

Before we jump straight into tactics, ask yourself why you have bad credit. Getting to the root of the problem will allow you to avoid making the same mistakes moving forward.

Do you spend too much, forget to pay your bills on time, or do you only make the minimum payments on your credit cards each month?

Are you regularly maxing out your credit cards? Have you opened multiple credit cards in a short amount of time?

All of these things can impact your credit score negatively.

2. Increase your credit awareness

Do you check your credit report regularly? If not, you may want to start. The only way to know if your credit has taken a nosedive is if you are monitoring it. Checking your credit card regularly can help to protect you and your credit score against things like credit card fraud or identity theft. Reviewing your credit report doesn’t impact your score, and there are ways to do it for free, so there’s no excuse not to. If you’re not sure where to start, head over to Credit Karma for your free scores and more.

3. Get a side hustle

While your income doesn’t directly affect your credit score it does affect your ability to pay your bills on time. Having more money can also help you to pay off debts faster or avoid going further into credit card debt. Reducing the amount of outstanding debt is one of the biggest components to your credit score.

4. Automate bill payments

Automating bill payments will help you avoid late or missed payments. It only takes a few minutes to set up and you don’t have to think about it again. Because your payment history is one of the most important factors in determining your credit score, you want to make sure you’re always prompt with your bill payments.

5. Make frequent payments

Rather than making one lump sum payment at the end of the month, making multiple small payments throughout the month can help you to improve your credit score over time. This strategy works because it helps keep your credit utilization low. Credit utilization refers to the amount of credit you’ve used compared to the amount of credit available to you. Low credit utilization shows lenders you aren’t financially maxed out and they see you as less of a risk.

6. Ask for more credit

Okay, let’s start by saying this strategy doesn’t work for everyone. If you’re someone who can’t control their spending and will immediately rack up new debt, don’t do this.

However, if you’re responsible with credit and want to employ another strategy to boost your score, then this can be an effective strategy. When you ask for more credit, your amount of “available credit” goes up and you automatically get a boost to your credit utilization as you’re using a smaller portion of the amount of credit available to you.

If you’re wondering, “wait, I have the ability to rack up even more debt and that’s good for my credit score?” Yep, that’s how it works. You have the opportunity to increase the amount of outstanding debt but are choosing not to. Responsible borrowers don’t use most of the credit available to them.

Are you ready to improve your credit score?

If you currently have a poor credit score, don’t beat yourself up over it. Things happen. If you’re willing to learn from past mistakes, you can rebuild your credit score quickly. Start by figuring out why you have a bad score in the first place and then employ some of these creative strategies to help you improve your standing.