They Track Their Spendings:
Most people think they can just mentally keep track of how much they are spending, but this is simply not possible. If you just do it for a month you will be amazed at how small things can add up to a lot. And it can be pretty amazing how cutting off small unnecessary expenses can save you a good amount of money.
They Know The Power Of Compound Interest:
In simple terms, compounding is getting profits on your investment and then the next year getting the profits on (initial investment + previous year’s profits) and let the cycle continue to exponentially grow your money.
Say, for example, you followed the first habit of tracking your spendings and you found out you have a subscription to something that you pay $8.5/month for but don’t really use (which is approximately $100 per year). If you decided to Invest those instead with a 7% annual interest rate, after 30 years that amount will add up to $10,869. That is the power of compound interest. (if you didn’t invest the money but just kept it aside, you would have $3000 instead of the $10,869).
They Don’t Just Trade Their Time For Money:
Let’s say hypothetically you wanted to be a billionaire, even if you earn $100/hour and you work 24/7/365 without eating, sleeping, or doing anything you would have to work for 1141 years to get to the big B and that’s not even 1% of Jeff Bezos’ net worth.
Trading your time for money and trying to get rich by doing that is not going to get you far but rather make your journey a lot treacherous. The key is to have your money work for you, your money should not be lying under your bed, it should be invested in stocks, bonds, real estate, or other modes of investing.