Money Management

No two millionaires are exactly alike. However, take a look at seven habits that many millionaires have in common. 

Not everyone can be born into wealth. That’s what makes studies like Credit Suisse’s Global Wealth Report so interesting. According to the report, there are 62.5 million millionaires worldwide. Zippia reports that 22 million of those millionaires are here in the U.S.

So, what does it take to get a piece of the pie? Is the goal to become “filthy rich” or to have enough money in the bank to cover necessities and carry us through old age? The answer depends on your desires. Are you interested in luxurious ski trips to Switzerland, or are you happiest at a lake near your house, spending time with friends and family?

No matter what your future goals may be, there is something to be learned from those who’ve amassed enough wealth to give them options. Here are seven habits that many of the wealthiest among us share.

1. They’re not interested in being “fabulous”

Look around your neighborhood. How many people drive the same SUV? How many kids at the bus stop wear the same tennis shoes? As humans, we long to fit in, to be part of the club. However, keeping up with the Joneses is the quickest way to abandon long-term financial goals for a dose of short-term acceptance. There’s a better-than-average chance that the wealthiest people living in your area live a modest lifestyle.

2. They know where they stand

In the busyness of everyday life, it’s easy to let things slide. One thing that those who build wealth do is keep track of where their money is coming from and where it’s going. If they get off track by spending far more than they’re investing in the future, they know it’s time to make an adjustment.

3. They make their money work for them

Speaking of investing, rich people do not allow thousands (or millions) of dollars to sit idly in a savings account. They put that money to work for them earning interest. Keep enough money in savings to serve as an emergency fund, but invest the rest somewhere it has a chance to grow.

In the meantime, the easiest way to keep emergency funds liquid (while also earning interest) is by putting the cash in a money market account (MMA). An MMA is an FDIC-insured bank account that pays interest but also gives you access to money when you need it.

4. They focus on the long term

What matters to a wealthy person is not how their investments performed last year but how they perform year over year. Once they’ve factored in both the up and the down years, they want to know that the money has grown over time. They can ignore the “noise” of people declaring the sky is falling and focus on what the long-term market looks like.

5. They’re not interested in making someone else rich

The wealthy know that the only one who gets rich when they pay interest is the lender. Paying high interest rates can quickly drain a checking account and dig a financial ditch that’s difficult to climb out of. One of the first goals for anyone who hopes to build wealth is to get out of high-interest debt.

6. They know how much their time is worth

Let’s say a person works from home and earns $75 an hour. They know that taking two hours to grocery shop will cost them $150 worth of work time. Suddenly, tipping someone else $20 to shop for them makes much more sense.

Along the same lines, wealthy people realize that they’re not obligated to give their time away for free. If you’re a hairstylist, you don’t owe it to everyone you know to cut and color their hair free of charge. If you’re a teacher, you don’t have to tutor the neighbor kid just because you “know what you’re doing.”

Volunteering your time is your choice, and if that’s what you choose to do, it can be incredibly satisfying. However, you owe it to no one.

7. They’re not swayed by discouragement

You’re unlikely to ever hear about a group of wealthy investors who pulled their money out of a bear market. That’s because people who’ve built (or maintained) wealth know that the financial market is like a car on a mountain road. There will be periods when the ascent seems to last forever. And then there will be dramatic descents. You’ll never get to the end of the road and enjoy the fruit of your efforts unless you stick with it.

As we all know, true wealth is good friends, a happy family, and a healthy body and mind. However, if you’re hoping to grow your net worth as you work on the more important parts of life, taking a page from the wealthy is a good first step.

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Home prices appear to be softening in specific pockets of the country. However, find out the 10 cities where they remain sky-high. 

Researchers at the University of California San Diego’s (UCSD) Rady School of Management recently released an interesting housing prediction based on a model. This model — unlike those used by Redfin, Zillow, and other price predictors — is believed to have an accuracy rate of up to 70%. Here’s what they found.

In some areas, home prices are falling

Researchers used online search activity to track the rate at which potential home buyers used the internet to search for homes. And let’s face it, nearly all home searches begin by using the internet.

The new model found that housing prices could fall as much as 18% this year in some markets. For example, buyers in San Diego County may end up paying 12% less for a home by the end of the year. In Phoenix, AZ, they’re expected to experience an 18% drop in price. Overall, housing prices are predicted to decrease 5% nationally.

In others areas, prices continue to climb

While mortgage purchase applications are down 35% compared to this time last year, Realtor.com believes home sellers in these 10 cities will remain in the driver’s seat as home values in their pockets of the country continue to rise.

If you’ve created a mental map of where these cities are located, you’ve probably noticed that most are in the Midwest or South. And all but one city has a median list price considerably lower than the national median list price of $414,950.

Why the difference?

As prices began to rise in 2020, it was fairly easy to figure out why. Interest rates were at an all-time low, and housing inventory was so meager that competition broke out among buyers.

As mortgage rates began to rise, it was natural to believe that housing prices across the nation would cool due to fewer potential buyers — and to a degree, that’s been true. Fewer buyers is one reason prices have cooled in select areas of the country. Taking a look at San Diego County, it’s easy to spot a pattern.

Before the pandemic, San Diego County was already one of the more expensive areas of the country. After all, what’s not to love about sunshine, beaches, and friendly people? When interest rates hit rock bottom, more folks believed they could afford to buy and they came out in droves. As the rates rise, one of four things may be happening:

A potential buyer realizes how much their monthly mortgage payment will be and decides against taking the plunge.It becomes clear that a buyer does not qualify for a loan and a mortgage lender denies or rescinds approval.A potential buyer decides to move to a less expensive area of the country.Homeowners who locked in a low interest rate during the pandemic are unwilling to sell their homes and lose that rate. They stay put instead of shopping for a new or larger home.

The least expensive homes in the country have traditionally been in the South and parts of the Midwest. Those are the areas where prices continue to tick upward. That may be because they’re still affordable as compared to the national average. Time will tell if the situation will change as prices in those cities approach or exceed the national average listing price.

Housing inventory

Inventory issues have become a stumbling block to homeownership. The pandemic has made it crystal clear that there is a shortage of new housing units in the U.S., but it takes time for builders to construct new homes and complexes. The lack of available housing is one reason it’s taking months for potential buyers to find a home.

Until inventory issues are addressed nationwide, it’s difficult to imagine how the housing market will approach anything resembling normal. Until that time, the market will be like an old stove cooktop, with some areas warming up more than others.

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We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.Citigroup is an advertising partner of The Ascent, a Motley Fool company. Dana George has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Zillow Group. The Motley Fool has a disclosure policy.

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