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By Tom Corley

Why are some people rich and other people poor?

When I began my Rich Habits Study, I wanted to know the answer to one question: why are some people rich and other people poor?

Five years, and 51,984 questions later, I learned the answer – Habits.

Habits dictate your circumstances in life.

This is a truly groundbreaking discovery.

Habits affect just about every aspect of your life.

Ultra Rich2

And there are many shades of habits.

We have money habits, eating habits, drinking habits, exercise habits, sleeping habits, downtime habits, work-time habits, reading habits, relationship habits, happiness habits and thinking habits.

We have morning habits, afternoon habits and nighttime habits.

If you’re interested, here’s a list of all of the habits I documented over the years: Proof Habits Control Your Life.

According to a 2006 Duke study, 40% of your daily behaviours are habits.

Money habits have the most profound impact on your financial circumstances.

Money habits can be broken down into two categories:

  1. Spending Habits and
  2. Savings Habits

Many of the self-made millionaires in my study were able to accumulate their wealth by virtue of having learned smart money habits from either their parents or some mentor in life.

I called these millionaires Saver-Investors.

When you have smart money habits, you spend less than you make and you then save and invest the difference.

Over time, your savings and investments grow and compound.

Those who dutifully follow this guaranteed path to wealth eventually become financially secure.

Some even become multi-millionaires.

 But most, unfortunately, do not follow this guaranteed path to wealth.

How do I know?

In a 2013 survey conducted by the Associated Press, they found that 80% of America’s adults struggled with poverty or were near poverty, – just one paycheck away from their lives unravelling.

No safety net, little to no savings, every day just trying to keep up with their bills and credit card payments.

One of the main drivers of poverty for those who make a decent living is a Poor Habit that is all too common in the United States.

It’s called Want Spending.

Want Spenders to spend more money than they make on their wants.

They surrender to instant gratification, eschewing savings in order to buy things they want now: 60-inch TVs, nice vacations, expensive cars, bigger homes and jewellery.

They also spend too much money at bars and restaurants.

Worse, they will even go into debt in order to finance their wanted purchases.

Want Spenders are a special breed of poor, in that they create their own poverty.

Want Spending is a Poor Habit fueled by a number of things:

  • Envy – You envy what others have.
  • Peer Pressure – You buy what others buy, just to fit in. This is also known as Keeping up with the Joneses.
  • Emotions – Your emotions drive you to make spontaneous purchases of things you desire in the moment.
  • Addiction to Spending – You get a Dopamine hit every time you buy something new.
  • Low Self Worth – You spend money on things in order to impress others and this temporarily boosts your low self-worth.
  • Ignorance – You are financially illiterate. You don’t understand how to manage your money.
  • No Plan – You have no financial plan and no clear vision of what you want your life to be in the future.

If you are like most, you struggle with some aspect of Want Spending.

Awareness is the key.

Once you understand what type of Want Spender you are, you can put a stop to it and forge smart money habits that will ensure you never allow Want Spending to ravage your financial life.

About Tom Corley Tom is a CPA, CFP and heads one of the top financial firms in New Jersey. For 5 years, Tom observed and documented the daily activities of wealthy people and people living in poverty and his research he identified over 200 daily activities that separated the “haves” from the “have nots” which culminated in his #1 bestselling book, Rich Habits – The Daily Success Habits of Wealthy Individuals. Visit the website:

Fantastic article! Thank you for such awesome content.

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