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Change your habits, change your life

The path to financial independence is fairly straight forward for some but terribly difficult for others. However, on closer inspection, those who find it difficult are often nothing but the product of bad financial habits. Thomas C. Corley, a certified public accountant and certified financial planner, spent five years studying millionaires and gathered his insights in multiple books, including "Change Your Habits, Change Your Life." According to Corley, there are seven bad habits that won’t lead to wealth.




Habits are daily, often unconscious, behaviours that either contribute to or inhibit our success.

Corley interviewed 233 people with at least $160,000 (roughly R2.4 million) in annual gross income and $3.2 million (roughly R48.5 million) in net assets, 177 of whom were self-made. He al- so interviewed 128 Americans with $35,000 (roughly R530,000) or less in annual gross income and $5,000 (roughly R75,000) or less in liquid assets.

Through these conversations and further analysis, he was able to identify two types of habits: those that helped people build wealth ("rich habits"), and those that worked against them. The latter habits have the power to cause financial, emotional, and mental destruction in a person's life, he says. To achieve success, one must identify these habits and re- place them.

"Adopting one rich habit has the effect of eliminating many poor habits. That's why the rich habits are so powerful. Each one you adopt is like a double or triple in baseball," he writes.

Below are seven habits that won't lead to wealth, according to Corley.


1. Overspending

You simply can't get rich spending more money than you make, whether it's buy- ing a car or house you can barely afford or racking up a credit-card bill.

"Ninety-five percent of the poor in my study did not save and most accumulated debt to subsidize their standard of living," Corley wrote. True wealth comes from saving and investing a portion of what you earn, no matter the size of your salary.


2. Reading only for entertainment, or not at all

Reading with intention is a top habit of millionaires.

In Corley's study, 92% of people with minimal assets did not read to learn. "Success requires growth. That growth comes from reading and educating yourself on a daily basis," he writes.


3. Toxic relationships

It's hard to sever ties with people who may be holding you back. But if you're serious about setting yourself up for a rich future, it has to be done, Corley says.

He found that only 4% of the low-income people he studied associated with "success-minded" people.

"You are only going to succeed in life if you surround yourself with the right type of people," he writes. That is to say, people who are encouraging, positive, curious, and helpful.


4. A single stream of income

Many of us rely on one job to make mon- ey, but that's not how future millionaires operate.

Sixty-five percent of the rich people in Corley's study had at least three differ- ent streams of income set up prior to making their first $1 million. This not only supercharges earning potential, it acts as a safety net against job loss.

"Poor people have one income stream. Their eggs are all in one basket," Corley writes.


5. Engaging in negative self talk

"I'm not smart or educated enough." "It's not my fault." "Life is a struggle."

These are examples of negative self-talk, Corley writes. These internal conversations fill us with doubt and act as a directive for our actions.

"When you allow negativity to rule your thoughts, you are programming your brain for failure," he writes. "You'll have no chance in life at breaking out of your current financial or life circumstances. These negative thoughts will become beliefs that act like computer programs."


6. Having no plan

You don't need resources beyond your own imagination and determination to make a plan for the future. The plan - what you want to accomplish and where you want to be in 10, 15, or 20 years - is the first step to achieving any type of success, especially financial success.

"Ninety-five percent of the poor in my study had no life plan," Corley writes. "Without a blueprint, without long-term goals, we are like leaves on a fall day, floating in the air aimlessly."


7. An unhealthy lifestyle

Unhealthy lifestyle habits - like excessive drinking, unhealthy eating, and minimal exercise - don't lead to wealth, according to Corley.

"Poor health habits create detrimental luck," he writes. "This is a type of luck that is a byproduct of poor habits, poor behavior, and bad decision making."




Choose a substitute for your bad habit.

You need to have a plan ahead of time for how you will respond when you face the stress or boredom that prompts your bad habit. What are you going to do when you get the urge to smoke? (Example: breathing exercises instead.) What are you going to do when Facebook is calling to you to procrastinate? (Example: write one sentence for work.) Whatever it is and whatever you're dealing with, you need to have a plan for what you will do instead of your bad habit.

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