5 Habits of wealthy people

5 Habits of wealthy people

It’s easy to daydream about what it would be like to be a millionaire, but could turning that fantasy into reality be as easy as waking up early?

RateCity has found that becoming a millionaire could be easier than you think, according these tips and tricks from highly successful people.

Meditate.

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By now everyone is aware of the act of meditating, whether it’s through religious practice or your weekly yoga class. According to these successful entrepreneurs, meditation is directly linked to their success as it allows the individual to deal with everyday pressures and stress.

Tupperware CEO Rick Goings meditates for twenty minutes every afternoon to help alleviate stress, and focus better on important tasks. Even Oprah Winfrey has advocated for meditation. The Harpo Productions Inc. CEO meditates twice a day to help herself find clarity and strength.  

Wake up early.

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Richard Branson once revealed he wakes up every morning with the sun (even when staying at his private island) as he likes to spend these early hours exercising and eating breakfast before work. Apple CEO Tim Cook also joins Branson in this philosophy, and is known for sending out company emails at 4:30am. Waking up early and making the most of your morning is one habit shared by 29 successful people.

Early risers start their days before everyone and give themselves a jump start on the competition. They’re able to communicate with people in different time zones as well as find time for family, friends and exercise.

Save, not spend. 

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It seems like an obvious one, but having the self-control to save your money instead of spending it is a common habit among wealthy people.

They say the early bird catches the worm and the same is true about your superannuation. Saving for your future is just one way that ordinary Australians can enjoy wealth in their retirement. Making regular additional payments into your super fund could mean a world of difference. For example, if you put an additional $20 a week into your superannuation for the next thirty years you will have $31,200 more to enjoy.

Read more, no matter how!

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In his successful 2010 book ‘Rich Habits’, Thomas C. Corley examined the behaviours of various successful people to compile a collection of their daily habits. According to the study of 223 wealthy and 128 poor people, 79 per cent read education career-related material. 55 per cent read for personal development and even 63% of wealthy people listened to audio books during their commute.

It’s clear that whether through opening a book or listening to its audio, successful people incorporate reading into their daily habits.

Get more sleep.

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“We are in the midst of a sleep deprivation crisis” – Arianna Huffington, co-founder and former editor-in-chief of The Huffington Post.

In total contradiction to what Richard Branson may say, Arianna Huffington believes in the power of sleep to bring you success. After fainting from exhaustion, hitting her head on her desk, breaking her cheekbone and getting five stitches in her right eye, Arianna began a journey of rediscovering the value of sleep.

According to her book ‘The Sleep Revolution’, the cultural dismissal of sleep as “time wasted” compromises our health and our decision-making and undermines our lives. She clarifies what doctors have told us for years; that having seven to eight hours of sleep a night is key to having healthier and more productive lives.

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Learn more about savings accounts

How can I get a $4000 loan approved?

While personal loans and medium amount loans don’t offer guaranteed approval, there are steps you can take to help increase the likelihood of your application being approved, including:

  • Fulfilling the eligibility criteria (providing ID, proof of residency, proof of income etc.)
  • Checking your credit history (you can order one free copy of your credit file per year, and make sure that there aren’t any errors that may be bringing down your credit score)
  • Comparing carefully before applying (making multiple loan applications can mean having your credit checked multiple times, which can look bad to some lenders and reduce your chances of being approved by them)

Can you set up direct debits from a savings account?

It’s not usually possible to set up a direct debit from your savings account to cover ongoing expenses or bills, as savings accounts are structured around growing your wealth by earning interest on regular deposits, and discouraging withdrawals.

Some transaction accounts allow you to set up direct debits and also earn interest, though you may not enjoy as much flexibility as a dedicated transaction account, or get as high an interest rate as a dedicated savings account.

How do I open a savings account?

Opening a savings account is a relatively simple process. If you’ve found an account with a suitable interest rate, you’ll just need to get in contact with your chosen lender via a branch, phone call or hop online to begin the process. 

You may be required to provide:

  • Personal details, including identification (driver’s license, passport etc.)
  • Tax file number
  • Employment details

What is a good interest rate for a savings account?

A good rule of thumb to keep in mind with savings accounts is to look for a rate that is higher than the CPI inflation rate. This number is constantly changing, so check the Reserve Bank of Australia’s page. If you aren’t earning interest above this then the value of your money will go backwards over time.

How to open a savings account for my child?

Some banks and financial institutions allow parents to open a bank account for their child as soon as it is born, and start depositing funds to go towards the child’s future.

Children’s savings accounts generally don’t have fees, and are structured to help develop positive financial habits by limiting withdrawals, encouraging regular deposits, and earning interest on the savings, similarly to standard savings accounts.

Who has the highest interest rates for savings accounts?

As banks frequently change their rates, the most accurate way to know who currently has the highest interest rate is to use a savings account comparison tool.

How does interest work on savings accounts?

The type of interest savings accounts accrues is called compound interest. Compound interest is interest paid on the initial deposit amount, as well as the accumulated interest on money you have. This is different from simple interest where interest is paid at the end of a specified term. Compound interest allows you to earn interest on interest at a higher frequency. 

Example: John deposits $10,000 into a savings account with an interest rate of 5 per cent that he leaves untouched for 10 years. At the end of the first year he will have $10,512 in savings. After ten years, he will have saved $16,470.

What is the interest rate on savings accounts?

As banks frequently change their rates, the most accurate way to look at interest rates on savings accounts is to use a savings accounts comparison tool. When you look at the savings rate check what the maximum and minimum rates are. Often banks will offer you a promotional rate for the first few months which is competitive, but then revert back to a base rate which can sometimes be less than inflation. Ongoing bonus rates are often a safer bet as they will keep rewarding you with the maximum rate, provided you meet their criteria

Can you direct deposit to a savings account?

Yes. You can make one off payments or set up regular direct deposits into a savings account. This can be organised easily through online banking or by making deposits in a branch. Talk to your lender to find out the easiest way for you to set up direct deposits.

What is a savings account?

A savings account is a type of bank account in which you earn interest on the money you deposit. This makes it one of the easiest and safest investment tools.

Can I overdraft my savings account?

A lot of savings accounts won’t let you overdraw. Some will allow this feature but you’ll need to apply first. It’s best to read the fine print and check with your lender whether this is a feature they offer. It can be a helpful addition, but as your lender can charge you a fee as well as interest for going into negative numbers, it’s best to avoid overdrafting when possible.

Can you have a joint savings account?

Yes. Joint savings accounts can be useful for two or more people wanting to combine their savings to meet shared financial goals, including spouses, flatmates and business partners.

Some joint savings accounts require all parties to sign before they can access the money. While less convenient, this extra security can help encourage all parties to meet their shared financial goals.

Other joint savings accounts allow any of the account holders to access the money. These accounts can be convenient for financially responsible couples that trust one another implicitly. 

How to make money with a savings account?

Savings accounts make you money by earning interest on your savings. The more money you deposit, the longer you leave it in the account, and the higher the account’s interest rate, the more interest you’ll be paid by the bank or financial institution, and the more your wealth will grow.

To make sure your savings account makes money and doesn’t lose money, it’s important to maintain a large enough minimum balance that the annual interest earned exceeds any annual fees charged on the account.

How much money should I have in my savings account?

A good rule of thumb when working out a minimum balance for your savings account is to make sure that you’ll earn more in annual interest on your savings than what you’ll be charged in annual fees.

If you’re saving with a specific goal in mind, prepare a budget so the interest you earn on your deposits will help you efficiently reach this goal. Online financial calculators may be helpful here.