Five Habits of Ultra-Successful Entrepreneurs to Increase Wealth
Apart from the combination of luck, intelligence, grit and skill, what makes certain individuals a cut above the rest is the fact that they cultivate habits. According to the European Journal of Social Psychology, it takes 18 to 254 days for new habits to form, and approximately 66 days for this behaviour to become automatic, thereby freeing up the mind to focus on more important tasks. Dr Maxwell Maltz, the author of Psycho-Cybernetics, adds that it takes a minimum of about 21 days “for an old mental image to dissolve and a new one to gel.” If you want to make it big, you will need to change your old ways and develop a new set of habits. After all, Warren Buffet and Bill Gates did not become rich overnight. But what they did consistently was to read extensively and manage their wealth in a savvy manner. Here are five habits that ultra-successful entrepreneurs employ daily to stay at the top.
They Read Voraciously
Many ultra-successful people read voraciously. Why? Because they are always on a quest to learn and equip themselves with knowledge. Berkshire Hathaway CEO Warren Buffet, who is known for being a bibliophile, reads about 600 to 1,000 pages daily, while Elon Musk taught himself rocket science by memorising textbooks on astrophysics and engineering. Other notable bigwigs who have a penchant for reading include Mark Zuckerberg and Bill Gates, and Cloud Atlas by David Mitchell, Moonwalking with Einstein by Joshua Foer and World Order by Henry Kissinger are some of the books that they recommend.
Adopt an active rather than passive approach to reading by highlighting interesting quotes and writing down any nuggets of insight or ideas that arise from the text. Aside from books, pay attention to market shifts as well as trends by reading articles from The Economist, The Financial Times and The Wall Street Journal that could impact your business and personal finances. For example, if you want to apply for a loan to inject more funding into your company, be aware of changing interest rates, as you don’t want to incur more cost.
They Have Multiple Streams of Income
Avoid putting all your eggs in one basket. Every magnate will tell you that it is wise to have other sources of income for more security, other than your primary job or business. This will ensure that you have enough buffer, especially during an economic downturn. According to Rich Habits: The Daily Habits of Successful People, 65 per cent of self-made millionaires have at least three sources of income. Before Donald Trump was elected, he had over 500 businesses from real estate development to hotel chains. Facebook, Apple and Samsung own multiple businesses, too. Single business owners can seek to diversify by creating new products or embark on a new venture in a different industry. Since customers are capricious and market forces are often volatile, be always on the lookout to expand your scope. For instance, General Electric is in aviation, healthcare, power, renewable energy, venture capital and finance and lighting.
They Use Their Savings/Profits to Invest
While it may be tempting to splurge on a new sports car or a Richard Mille watch, highly successful entrepreneurs make a conscious effort to invest rather than spend lavishly. Instead of letting your savings sit in a bank account, consider buying stocks that pay a dividend, real estate (to collect rent) and even REITs to generate passive income. Aim to reinvest profits back into the business to fuel further growth in new markets. Or to acquire a competitor. Remember how Facebook bought Instagram for US$1 billion?
They Start Their Day at 5 A.M.
Waking up daily at 5 a.m. was part of Benjamin Franklin’s routine. Apple CEO Tim Cook and Disney’s former CEO Robert Iger are also part of what top leadership expert Robin Sharma calls the “5 a.m. club,” because they recognise that your most valuable hours are between 5 a.m. and 8.a.m. The conditions are the most conducive for working: your mind is fresh and uncluttered after a night’s rest before the chaos of the workday overwhelms you. Research has shown that people tend to be more productive in the mornings, as they are interrupted less by emails and messages. It is also the prime time to focus on big-picture issues, decision-making and strategic thinking. Bill Gates, who used to operate on caffeine and adrenaline, recognises that the “early bird catches the worm.” Another benefit of being an early riser is that your stress levels are significantly reduced, especially when you don’t need to rush in the mornings.
They Embrace a Frugal Lifestyle
Despite being a billionaire, Warren Buffet never spends more than US$3.17 on breakfast and continues to reside in a beach house that he bought in 1958. But there is a difference between being frugal and stingy. Frugality means seizing every opportunity to save money in preparation for a rainy day, or future investments. Be prudent about money and spend on things that you absolutely need, rather than buying on impulse. Shrewd businessmen also know the importance of bargaining in order to get the best deal. And never overpaying for an investment.
They also practise the 80:20 rule. This means you spend 80 per cent of your salary and save the remainder. Although it may be tempting to spend beyond your means (especially with credit cards), with some discipline, you will be able to form a habit. You don’t want to be one of those who are drowning in credit card debt. Here’s a tip: Try not to spend above 25 per cent of your monthly salary on housing and no more than 10 per cent on leisure activities like movies, shopping and eating out. Use online service providers like Personal Capital, which is a software that maps out your income, spending, portfolio holdings and gives you a detailed analysis of your current assets. Mint.com, another investment tracking website, allows you to set your own personal budgets, monitors investment fees and lets you compare your account to benchmarks like the Dow Jones Industrial Average.