What does it take to build significant wealth? Time? Hard work? Commitment to a strategic financial plan? For our 2023 Planning & Progress Study, we interviewed Americans with at least $1 million in investable assets to learn more about the choices they’ve made that helped them build and preserve their wealth.
And while a million dollars certainly isn’t what it once was, obtaining a million-dollar net worth continues to be an elusive goal for most Americans. In fact, as recently as 2021 just 9.7 percent of American adults were millionaires.1
Whether you’re already a member of this exclusive group or aspire to be one day, you might be wondering the same thing we were: “What financial habits set millionaires apart from everybody else?” In our study, we set out to answer that question.
7 Financial Habits of High-Net-Worth People
While we all have our preconceived ideas about the characteristics and actions required to build this kind of wealth, our research reveals seven financial habits that American millionaires tend to employ. And while you are likely practicing some of these already, there is a good chance you’ll want to make a point of building some new habits, too.
1. Focus on the Big Picture
When it comes to money, wealthy Americans see beyond the challenges of today and plan for a brighter tomorrow. In fact, 84 percent say their financial plans are designed to help them navigate long-term risks like the ups and downs of the market. When compared to the rest of the population, only 52 percent could say the same.
Key takeaway: As life expectancy continues to increase, millions of Americans will live long lives. In another recent study, finance experts recommend that financial plans be designed to last until age 100.2The financial changes that are likely to occur over such a long life include recessions, periods of high inflation, higher taxes, rising health care costs, and more. And while no one has a crystal ball, by anticipating and planning for key financial risks, you can position yourself for long-term financial security and success.
2. Act but Don’t Overreact
Affluent people are not complacent about their finances. They know the value of a sound financial plan, and 77 percent describe themselves as disciplined or highly disciplined planners. These individuals have specific financial goals and act on the steps required to achieve them.
Key takeaway: Having a financial plan in place helps you assess where you are today, identifies goals for tomorrow, and lays out the necessary steps to get there. Together with an experienced financial advisor, you can build a comprehensive financial plan that does just that. Once it’s in place, by following it and using your advisor as a sounding board during times of change, you can help ensure that your actions are both in line with your plan and supportive of your long-term wealth-building objectives.
3. Be Open to Improvement
About half, or 47 percent, of high-net-worth Americans see opportunity for improvement in their own financial plans.
Key takeaway: While at the surface level staying connected with others may not seem like a financial habit, according to research from the Harvard Study of Adult Development, warm relationships, happiness, health, longevity and wealth are all interconnected, so it’s no coincidence that high-net-worth people are relationship focused. Our advice: Pay attention to and nurture your connections with others, as it’s a key component to long-term flourishing personally and financially.
7. Seek Professional Finance Advice
Of high-net-worth individuals, 70 percent work with a financial advisor. You can compare that to just 37 percent in the general population. What’s more, far and away, wealthy people consider financial advisors to be their most trusted source of financial advice—more than four times any other source.
