Sam Dogen, the founder of Financial Samurai and author of “Millionaire Milestones: Simple Steps To Seven Figures,” has observed four distinct habits that set self-made millionaires apart from the average person. These “get rich” habits are often overlooked by many Americans. The first habit is consistently saving and investing.
Millionaires don’t wait for the perfect time to invest. They automate investments and view market downturns as opportunities to buy at a discount. Dogen aims to invest at least 20% of his income, increasing that percentage as his earnings grow.
The second habit is building multiple streams of income. The average millionaire has several income sources, such as dividends from stocks, rental income, business profits, royalties, capital gains, interest, and freelance work. These act as a financial safety net.
The third habit is thinking in terms of opportunity cost. Millionaires consider what they’re giving up to make a financial decision. They prioritize wealth-building activities over short-term gratification.
For example, instead of buying a luxury car, they’ll consider the potential future value of investing that money. The fourth habit is an unwavering belief in their ability to get rich. Millionaires don’t see money as the domain of a select few; they believe they can create and control wealth.
They have a relentless drive and resilience, learning from mistakes and taking action to succeed. While these habits are practical, self-belief is equally important. The difference between those who accumulate wealth and those who don’t often comes down to mindset.
Millionaires take risks and put themselves in positions to succeed. According to the Federal Reserve, the average net worth in the U.S. was $1,063,700 in 2022, but the median net worth remained at $192,900, indicating a significant wealth disparity. However, certain habits and assets are common among millionaires that have helped them achieve financial success.
Almost every millionaire in America owns appreciating assets like real estate. The median U.S. home price increased from $130,000 in 1995 to $416,900 in 2025. Millionaires often pay off their home mortgage in just 10.2 years, saving on interest and allowing for greater wealth accumulation.
Millionaires also tend to buy reliable used cars to avoid the quick depreciation of new vehicles. The average cost of a used car was $27,177 in late 2024, compared to $47,542 for a new one. Investing the savings can significantly boost wealth over time.
While 88% of millionaires hold a college degree, most attended state schools. Only 8% went to prestigious private colleges, while 62% graduated from public state schools.
Four effective habits of millionaires
This choice reduces student debt, allowing for more investment opportunities early in their careers. Investing plays a crucial role in wealth accumulation, with 80% of millionaires investing in their employer’s 401(k) plans. Even modest monthly contributions can grow significantly over time.
Contributing $350 a month to a 401(k) at an 8% annual return can result in nearly $1.1 million after 40 years. Avoiding credit card debt is another common practice among millionaires. About 75% of them have never carried a credit card balance.
Responsible use of credit cards, such as paying off the balance in full each month, helps avoid high-interest debt and allows more money to be invested. As the debate over taxing the rich intensifies, it’s worth exploring the strategies millionaires use to maintain and grow their wealth. Most millionaires don’t just sit on single windfalls; they have at least seven streams of income.
Diversification is crucial in creating multiple income streams, which cushion economic downturns and unexpected life events. One way millionaires stay wealthy is by maximizing their earned income. Negotiating raises, developing high-income skills, and strategically switching jobs can help grow earned income.
Avoiding lifestyle inflation and saving aggressively can fund other income streams. Starting a side hustle or a full-fledged business is another way to increase income potential. A business has unlimited upside and can generate income long after the initial work is done.
Dividend income is a passive income stream that requires simply holding shares in dividend-paying stocks and ETFs. Reinvesting dividends maximizes compounding returns, creating a powerful source of passive income over time. Real estate is a reliable way to build wealth.
Owning rental properties generates semi-passive income and long-term wealth through consistent cash flow, rising rents, property appreciation, and mortgage paydown. Long-term investing in stocks, index funds, real estate, and collectibles can generate capital gains. Patience is key, allowing investments to appreciate over time rather than chasing short-term profits.
Interest income, though not exciting, is vital for a diversified portfolio. High-yield savings accounts, U.S. Treasury bonds, and private lending platforms generate steady interest income with relatively low risk. Earning money from intellectual property such as books, patents, or YouTube videos can be immensely profitable.
Monetizing creativity can provide long-term rewards. Becoming a millionaire is about consistently making smart financial choices. The more income streams you build, the more resilient you become.
Diversifying your income is key to long-term financial success. By gradually incorporating these strategies, you can create a robust financial foundation that withstands economic fluctuations and provides the freedom to live life on your own terms.
Image Credits: Photo by Tyler Harris on Unsplash
