9 Smart Money Habits Multi-Millionaires Do Differently (2024)

9 Smart Money Habits Multi-Millionaires Do Differently (1)

Financial Planning Retirement Tax Financial Education Financial Literacy Legacy Planning

Contrary to popular belief, most wealthy people don’t become rich from one brilliant money move. Instead, most multi-millionaires build wealth over time through healthy money habits. Affluent Americans often share these 9 habits —and the good news is that people of almost any income level can apply them to their own financial lives.

Published by Motley Fool Wealth Management Originally posted on Tue, Dec 19, 2023 Last updated on January 10, 2024

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There is no magic formula for becoming a multi-millionaire — well, other than to inherit millions of dollars. But one smart way to set yourself up for success is to learn what has worked for wealthy Americans, and apply some of those lessons to your own life.

With that in mind, here are nine habits that many millionaires share that could help set you up for financial success in your own life.

9 Smart Money Habits Multi-Millionaires Do Differently (7) They avoid debt

This probably won’t come as a big surprise, but the bulk of millionaires are very reluctant to take on debt. In fact, 73% of millionaires surveyed in the US have never carried a credit card balance,1 while 56% of active credit card accounts in the United States currently have a balance.2

One big exception is mortgages, and even some of the super-rich use mortgages when buying their homes. Legendary investor and mega-billionaire Warren Buffett has called the 30-year fixed mortgage “the best instrument in the world,” mainly because they have relatively low interest rates compared to other forms of consumer debt and because they can be refinanced rather easily if rates fall.3

9 Smart Money Habits Multi-Millionaires Do Differently (8) They own their homes — but keep it modest

As mentioned, millionaires aren't debt-averse when it comes to buying their homes. While there are certainly plenty of millionaire renters, the wealthy are far more likely to own their homes than the average American. According to one study, 90% of millionaires own their primary residences.4

Now, this is likely because owning real estate can at least partially be responsible for why wealthy families got that way. According to the National Association of Realtors, the typical homeowner is 40 times wealthier than if they had never bought a home and rented instead.5

While millionaires are more likely than the average American to own their homes, they don't all live in the flashy mega-mansions you might be picturing. In fact, six out of 10 millionaires live in homes worth less than $500,000.6

9 Smart Money Habits Multi-Millionaires Do Differently (9) They have lots of emergency savings

It's very difficult to build wealth if you have to sell your investments every time an unexpected expense comes up — or worse, to have to use a credit card in those situations. So, one thing wealthy Americans do very well is establish and maintain an emergency fund.

Many financial planners use the target of six months' worth of expenses in a readily-accessible place like a savings account. But many millionaires take it a step further. In fact, studies have shown that millionaires often keep as much as 25% of their money in cash and equivalents like Treasury bills.7

9 Smart Money Habits Multi-Millionaires Do Differently (10) They buy modest cars, and drive them for a long time

If I were to ask you what the most popular brand of car was among the wealthy, you might guess something like Mercedes-Benz, BMW, or Cadillac. But you'd be wrong. Toyota, Ford, and Honda are most common among high-income households, and one recent study found that the top vehicle in the U.S. for people earning over $200,000 is the Ford F-150 pickup truck.8

Wealthy individuals don't get or stay that way by spending excessive amounts of money on depreciating assets like vehicles. Ninety percent of millionaires drive cars that cost less than $75,000, and 86% of people who drive the traditional "prestigious" brands are not millionaires.9

9 Smart Money Habits Multi-Millionaires Do Differently (11) They take care of their health

One thing most millionaires do is take great care of their health, especially when it comes to finding time to exercise. According to the "Rich Habits" study by Tom Corley, author of "Change Your Habits, Change Your Life", 76% of the wealthy exercise for at least 30 minutes a day.10Many billionaires, including Richard Branson, Mark Cuban, Mark Zuckerberg, and Jack Dorsey credit regular exercise for a lot of their success.11

Furthermore, according to the study, 93% of wealthy people sleep at least seven hours a night, and over 60% play some form of competitive sports as adults.

9 Smart Money Habits Multi-Millionaires Do Differently (12) They never stop learning

How would you think billionaire investor Warren Buffett spends his typical day? Many would think he spends it in board meetings, or analyzing which stocks to buy next. But you might be surprised to learn that Buffett spends as much as 80% of his typical day sitting alone and reading.12

Buffett isn't unique in this regard. One self-made millionaire, Thomas Crowley, interviewed 1,200 wealthy people and found that reading regularly is a habit almost all of them had in common. And, Corley's research found that 85% of self-made millionaires read two or more books per month.13

9 Smart Money Habits Multi-Millionaires Do Differently (13) They get up early

Not only do the wealthy get plenty of sleep, but they also get out of bed early to get their day started. In an Inc. Magazine survey of more than 1,000 CEOs, 64% reported that they wake up by 6 a.m. or earlier.14

9 Smart Money Habits Multi-Millionaires Do Differently (14) They’re tax-savvy

You don't get or stay rich by giving away lots of money. If you don't take advantage of the tax breaks available to you, that's exactly what you're doing.

Wealthy people as a group are generally very good at keeping their taxes low. They tend to max out their retirement contributions, keep track of all their charitable contributions, and also tend to have assets like businesses and rental properties, which get favorable tax treatment. Plus, they tend to get more income from capital gains and dividends, which are taxed at lower rates than earned income, and also take steps to lower the eventual tax burden on their heirs.

The top income tax rate in the United States is currently 37%, but the top 5% of U.S. households pay an average income tax rate of just 22.4%.15Keep in mind, this is a percentage of their income – wealthy households are far more likely to have substantial amounts of unrealized investment gains. In fact, when including income from unsold investments, the White House found that the average federal income tax rate for the 400 wealthiest U.S. households is just 8.2%.16

9 Smart Money Habits Multi-Millionaires Do Differently (15) They stick to smart habits

To be perfectly clear, even if you adopt all nine of these habits in your own life, there’s no guarantee that you’ll join the ranks of the ultra-rich. But, it could help put you in a position to maximize your wealth-building potential. These are some of the ways that the rich become rich, stay rich, and grow even richer, and there are some valuable lessons to be learned from their habits.

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1Ramsey Solutions, The National Study of Millionaires, April 12, 2023.

2LendingTree, 2023 Credit Card Debt Statistics, Oct. 6, 2023.

3CNBC, "Here's why Warren Buffett Thinks You Should Buy a Home," Mar. 6, 2017

4Advisorpedia, Millionaire Real Estate Ownership, Aug. 2, 2022.

5USA Today, "Why It Pays to Buy a House," April 18, 2023.

6Ramsey Solutions, The National Study of Millionaires, April 12, 2023.

7Yahoo! Finance, The Sneaky (But Smart) Place Millionaires Keep Their Money, Sep. 6, 2023.

8Kunes Auto Group, What the Rich Really Drive: Uncovering the Truth About Wealthy Car Owners, Apr. 12, 2023.

9The Millionaire Next Door Blog, Rich or Drive Rich?, accessed Oct. 13, 2023.

10Corley, Tom. "10 Common Millionaire Habits," Aug. 25, 2022.

11CNBC, "Mark Zuckerberg, Richard Branson and Mark Cuban all agree that this one habit is key to success," May 28, 2017.

12CNBC, "Warren Buffett’s reading routine could make you smarter, science suggests," Nov. 16, 2016.

13Entrepreneur, "9 Everyday Habits of the Average Millionaire," Nov. 7, 2017.

14Inc. Magazine, CEO Survey: What Drives the Leaders of Inc. 5000 Companies – and What Keeps Them Up at Night?", Sep. 2022

15Tax Foundation, Summary of the Latest Federal Income Tax Data, Jan. 26, 2023.

16The White House, What Is the Average Federal Individual Income Tax Rate on the Wealthiest Americans?," Sep. 23, 2021.

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    9 Smart Money Habits Multi-Millionaires Do Differently (2024)


    9 Smart Money Habits Multi-Millionaires Do Differently? ›

    Simply stated your household's net worth should equal 10% of the age of the main breadwinner times your household's annual realized income [adjusted gross income is a good substitute]. In short it is 10% X Age X Income = Expected Net Worth.

    What is the millionaire formula? ›

    Simply stated your household's net worth should equal 10% of the age of the main breadwinner times your household's annual realized income [adjusted gross income is a good substitute]. In short it is 10% X Age X Income = Expected Net Worth.

    How do multi millionaires bank their money? ›

    Millionaires also have zero-balance accounts with private banks. They leave their money in cash and cash equivalents and they write checks on their zero-balance account. At the end of the business day, the private bank, as custodian of their various accounts, sells off enough liquid assets to settle up for that day.

    What's the fastest way to become a millionaire? ›

    How To Get Rich
    1. Start saving early.
    2. Avoid unnecessary spending and debt.
    3. Save 15% or more of every paycheck.
    4. Increase the money that you earn.
    5. Resist the desire to spend more as you make more money.
    6. Work with a financial professional with the expertise and experience to keep you on track.
    Apr 11, 2024

    How do most multi millionaires make their money? ›

    Many self-made millionaires have money coming in from several places, including their salaries, dividends from investments, income from rental properties and investments they have made in other business enterprises, to name a few examples. If one income stream slows down, there's another that can take its place.

    What car does a rich man drive? ›

    Common Types of Cars Driven by the Wealthy: Luxury Brands: Think Mercedes-Benz, BMW, Audi, and Lexus. These brands are known for combining luxury with performance. They're often sleek, well-designed, and come with a host of high-end features.

    What bank do most millionaires use? ›

    The Most Popular Banks for Millionaires
    1. JP Morgan Private Bank. “J.P. Morgan Private Bank is known for its investment services, which makes them a great option for those with millionaire status,” Kullberg said. ...
    2. Bank of America Private Bank. ...
    3. Citi Private Bank. ...
    4. Chase Private Client.
    Jan 29, 2024

    Do millionaires use credit cards? ›

    If you use a credit card, you're more like millionaires than you may think. Although most adults have credit cards, millionaires are even more likely to use them. According to the Federal Reserve, almost all adults with incomes over $100,000 have a credit card in their name.

    Where do the ultra rich keep their money? ›

    How the Ultra-Wealthy Invest
    RankAssetAverage Proportion of Total Wealth
    1Primary and Secondary Homes32%
    3Commercial Property14%
    7 more rows
    Oct 30, 2023

    How to get rich with a normal job? ›

    How To Become Rich on an Average Salary
    1. Start Early. You'll hear this all the time, but starting early is the best thing you can do for yourself. ...
    2. Prioritize Savings. ...
    3. Reduce Expenses. ...
    4. Generate Multiple Income Streams. ...
    5. Clean Up Your Credit. ...
    6. The Bottom Line.
    Feb 25, 2024

    How to get rich as a woman? ›

    Independent, rich women are lifelong learners. They consistently prioritize financial education, she says in a post for the Rich Dad blog. Sign up for personal finance and investing seminars, read personal finance books, listen to podcasts, and pay attention tofinancial newsstories. A rich woman is an informed woman.

    How to go from broke to rich? ›

    If you want to get rich, here are seven “poverty habits” that handcuff people to a life of low income:
    1. Plan and set goals. Rich people are goal-setters. ...
    2. Don't overspend. ...
    3. Create multiple streams of incomes. ...
    4. Read and educate yourself. ...
    5. Avoid toxic relationships. ...
    6. Don't engage in negative self-talk. ...
    7. Live a healthy lifestyle.

    What is a silent millionaire? ›

    The people who have all the money often go by unnoticed, dressing well, but without flash, driving used cars and living in the first house they bought in a modest neighbourhood. The authors called them the quiet millionaires. They often work in, or own, unglamourous businesses that spin off steady streams of cash.

    What degree do most multi millionaires have? ›

    Top 7 degrees that make the most millionaires
    • Engineering.
    • Economics/Finance.
    • Politics.
    • Mathematics.
    • Computer Science.
    • Law.
    • MBA.

    What is the old money mindset? ›

    Old money families tend to be much more frugal-minded. This mindset comes from a more communal sense of who the money belongs. Old money is family money. It is meant to span generations – therefore, it cannot be spent willy-nilly.

    How much income will $1000000 generate? ›

    One rule of thumb suggests $1 million would generate around $40,000 each year, adjusted upward for inflation. Instead of picking a figure, work out what income you might need in your old age and work backward from there.

    What net worth is considered rich? ›

    In the United States, the concept of being rich is often a subject of discussion, curiosity and, sometimes, aspiration. Charles Schwab's 2023 Modern Wealth Survey provides insights into this topic, revealing that the average American equates being wealthy with a net worth of approximately $2.2 million.

    How many millions do you need to be considered rich? ›

    Someone who has $1 million in liquid assets, for instance, is usually considered to be a high net worth (HNW) individual. You might need $5 million to $10 million to qualify as having a very high net worth while it may take $30 million or more to be considered ultra-high net worth.

    What is the wealth equation for millionaire Fastlane? ›

    Wealth equation: Wealth= Net Profit + Asset Value. The goal is to build passive income through businesses or investments.


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