How to Become Rich

A generation or three ago, television viewers were dazzled by Lifestyles of the Rich and Famous, a quirky, early entrant into the reality realm, presented by bellowing London entertainment reporter Robin Leach.

While the show’s adherents learned plenty about the lavish excesses fueled by uncountable wealth, they would have been better served if the show had invested in a more useful angle that revealed “Wealth-Building Habits of the Rich and Famous.”

In fact, certain time-tested, deeply studied habits are a virtual guarantee practitioners will become genuinely rich. As in wealthy. As in a top-10-percenter. Maybe even a top five-percenter.

The top echelons are not as remote as you might imagine. Breaking the top 10% requires a net worth between $970,900 and $1.9 million, according to the Federal Reserve’s Survey of Consumer Finances, Yahoo Finance and MoneyWise.

Researchers such as financial planner Thomas C. Corley, author of Rich Habits, have poured thousands of hours into tracking the habits, deportment, and practices of America’s wealthiest. Along the way, certain themes conspicuously emerged, repeated themselves, and demonstrated, time and again, why they were worthy of emulating.

If you set financial goals, find ways to grow your income, pursue education, pay down debt, invest wisely and aren’t afraid to ask for financial help, you’re on the path to becoming rich.

Social science findings reach a single conclusion: Latch onto the habits of the wealthy, and you won’t simply avoid paycheck-to-paycheck drudgery; you, too, can boost yourself into the stars.

1. Set Financial Goals

Your path to financial success begins, as do most journeys, at the end: Where do you want to go? Fixing your destination is a vital first step, because rich is a relative term, and always has been.

Now, and always, rich enough means rich enough to you. Not your neighbors. Not your cousins. Not the others in your book club or trivia team. Your definition of rich enough is the only one that matters.

Maybe it’s owning your house free-and-clear, seeing the kids through college debt-free, a shock-proof emergency fund and seven figures in your retirement account. Maybe it’s something else.

Your vision of what constitutes wealth sets your goal, putting everything else in motion. Ask yourself some clarifying questions.

• What shape are your finances in?
• What major financial obligations lie ahead?
• Are you maximizing your earning potential?
• At what age do you want to retire?
• What does your concept of retirement include?
• What major purchases do you dream about?
• What prime-of-working-life pursuits do you envision?
• Do you have, or plan to start, a family?
• Do you need to finance the education of assorted youngsters?
• What sort of inheritance(s) do you anticipate receiving? What kind of inheritance do you hope to leave your spouse and/or children?

“Guaranteed wealth doesn’t exist … but what does exist is the ability to stack the odds in your favor,” says Lynn Toomey, founder of Her Retirement, a golden-years wellness platform designed for women. “With the right mindset/behavior, consistency, income generation, savings, investments, minding your cash flow, the right plan and support, building wealth is more likely.”

In financial terms, your success hinges on a variety of considerations, but the indispensable key to success is the time-honored wisdom of “living within your means.”

And that relies on drafting, then adroitly managing a budget.

2. Grow Your Income

For those not already securely in the top 5%, breaking through the gemstone ceiling involves upping your earning potential. Options include:

• Making a well-researched case for a raise or a promotion at your primary job.
• Taking on a second job.
• Exploring training, certifications or degrees that can boost your earning potential.
• Investigating side hustles that fit your schedule and interests.

With your income-enhancement strategies in place, remember: Resist the urge to indulge in lifestyle inflation, in which your instant gratification spending grows to match your income.

Instead, take pleasure in seeing your extra income grow through savings and wise investments.

3. Pursue Education

We mentioned this briefly above. It bears expansion.

Furthering your education, whether it involves a two- or four-year degree, advanced degrees, or vocational training can advance your career while boosting your earning potential.

Your company may support employees who go back to school. Ask your human resources representatives about tuition reimbursement.

Even if you have to find the money elsewhere, the time, effort and treasure you invest now will pay dividends for years to come.

» Learn More: How To Manage Student Loans

4. Pay Down Your Debt

Not all debt is terrible. A low-interest fixed-rate mortgage on a steadily appreciating primary home is a great example of “good” debt.

By contrast, high-interest debt on revolving credit cards is almost invariably awful debt.

Take heart, future member of the Rich Enough Society. A variety of proven methods exist to manage, reduce, and eliminate your harmful debt load. Options include, but are not limited to:

• Credit counseling, in which trained professionals guide you through your personal finance swamp, providing advice on such things as effective budgeting and get-out-of debt strategies.
• Debt consolidation, in which you gather your unsecured credit balances under a single financial umbrella — perhaps a low-interest personal loan or a home equity loan — to pay off with a single monthly payment.
• Debt management plans, in which a nonprofit credit counseling agency consolidates your unsecured debt, works with your lenders, and gets you out of debt, usually, in 36-60 months.
• Bankruptcy, in which you seek a fresh financial start by declaring yourself legally, irretrievably insolvent. A court-appointed trustee manages your assets, which may or may not be used to help pay off creditors. In roughly six months from filing, most of your debts are erased.
• Debt settlement, in which you or a third-party attempt(s) to resolve debts at less than the full balance owed.

5. Save (Save, Save) Money

It’s sad but true: Under any reasonable scenario, you cannot spend your way into the Rich Enough Society. Instead, one of the key ingredients to getting your invitation engraved is by following Dad’s advice: “Pay yourself first.”

You know what he meant.

“When you get paid, you probably already know what bills need to be taken care of,” says Matthew Ruley, director of content at Dypto Crypto. “What if you gave savings and investing the same courtesy?”

Before bills, before treats, before anything (except the tax collector), slide a little something into your savings and, ideally, investment accounts (especially a 401[k] or individual retirement account [IRA]).

Most benchmark budgeting plans recommend saving 20% of your gross income. If that’s simply impossible, it’s OK to scale back — as long as you’re consistently tucking something away. Start modestly if you must, but start.

Top of the list: Establish and grow an emergency fund. Having six months’ worth of take-home pay in an interest-bearing account is the gold standard. That’s your insurance against using high-interest credit cards to fund solutions to any number of calamities, from being laid off to covering a major repair or eye-popping medical bill — especially one from an emergency room visit.

Also, putting your savings on autopilot is the wise approach, says Creighton University professor of finance Robert Johnson.

“People should … automate as many financial decisions as they can,” Johnson says. “Make saving money a habit. And habits — good or bad —develop over time.”

While we’re talking about it: You may love your bank or credit union, but shop for the best rates; some financial institutions will goose your account with a cash bonus if it’s linked to automatic deposits.

When your emergency fund is topped off, reassign your auto-pilot savings deposit to a second savings account. Consider it a modest investment vehicle, or a funding source for future expenses that might otherwise wind up on high-interest credit cards: Christmas spending, a big vacation, a fat down payment on your next car, refurnishing the family room.

Rinse and repeat, repeat, repeat. It is impossible to have too many savings accounts.

6. Invest Wisely

While it is possible to work your way into substantial wealth — careers in finance, law, management, engineering, information technology and aviation spring to mind — achieving Rich Enough status usually involves investing that is both persistent and savvy.

“You cannot simply save your way to true wealth,” Prof. Johnson says. “Achieving true financial security and wealth is done … by both saving and investing.”

Johnson stresses socking money into assets that grow over time and, above all, starting as early as possible. As master investor Warren Buffett, CEO of Berkshire Hathaway says, “Someone’s sitting in the shade today because someone planted a tree a long time ago.”

Start investing early, and Future You can bask in the shade of the tree Present You planted.

Several investment strategies are easy enough to get you started. Examples include:

• Employer retirement plans, such as 401(k) accounts, are simple and effective. If your employer offers a match, do all you can to meet it; otherwise, you’re leaving free investable money on the table. Another benefit: Every dollar you invest is deductible from your income taxes.
• Individual retirement accounts (IRAs) are another type of tax-advantaged investment plan. The IRS annually updates who’s eligible for IRAs and how much can be stashed into them.
• Brokerage accounts, whether online or through traditional brick-and-mortar investment bankers, offer other opportunities for investment.

In each of the above examples, employees can arrange to have a portion of their paychecks automatically funneled into the investment account(s) of their choice.

“This strategy means you will be putting money into the market whether stocks are rising, falling or treading water,” Johnson says. “You will practice dollar-cost averaging (mitigating risk by investing steadily over time) and build significant wealth over the long run.”

Learn about asset allocation, the distribution of investment cash into areas such as stocks, bonds, real estate, and cash. Consider your risk tolerance. Typically, investors with distant horizons — 20 years or more — can take on greater risk (for potentially far greater rewards) than those nearing retirement.

Keep this in mind: For all the global turbulence in the post-World War II era, the S&P 500 (a diversified basket of roughly 500 publicly traded companies) has returned, on average, just over 10% annually. An investment of just $100 per month in an S&P-tracking fund since 1995 ($36,000 total) would have grown to more than $252,000 by the middle of 2025, a total return of 557%.

Link to:

» Learn More: How to Invest

7. Avoid Get Rich Quick Schemes

America wouldn’t be America without its rags-to-riches tales. (You could look them up.) But striking gold on Shark Tank, crushing it as a TikTok influencer, or winning the Power Ball lottery are long-shot financial strategies. Ditto for that “sure thing” the friend of a second cousin’s nephew was talking up. Chances are it’s a Ponzi scheme or a multilevel, or pyramid, marketing dodge.

“There is no shortcut to learning about personal finance and developing responsible habits if you truly want to build financial security,” says James Shiver, Trident University International business professor and managing principal at ChoiceLifeQuote.com. “We have all heard about the lottery winners and professional athletes who go broke after a few years. It is important to build a solid foundation of habits and as your income grows so will your long-term wealth.”

In short, be careful out there, because the sharks know lots of ways to separate you from your money in a hurry. Here are a few of the schemes:

• Loan scams involve wild promises of guaranteed approvals, no matter what the applicant’s credit score or income, in exchange for an upfront fee. The loan never gets processed, and the fee vanishes.
• Identity thieves steal personal information (oftentimes willingly provided under some false pretense), apply for loans in the victim’s name, leaving the victim on the hook.
• Payday loan scammers are at the forefront of identity theft by vowing easy loan approval for applicants desperate for quick cash. Sensitive identity info in hand, they carry out their financial fraud scheme.
• Card-cracking involves accepting an invitation, usually via social media, to participate in bank robbery. Third parties coax marks into sharing debit card information, depositing bad checks into the targeted account, then quickly withdrawing equal amounts from the targeted account before the checks bounce. The bank customer then reports a stolen card or compromised credentials. The bank restores the lost funds, and the criminal shares a cut of the ill-gotten gains.
• Credit card fraud also plays a role: Scammers lure victims with promises of quick, fat payoffs by paying a small upfront qualifying, or entry, fee, oftentimes via gift card or prepaid credit card.

At the risk of committing a cliche, there’s no such thing as a “sure thing.” As the sage says, if it sounds too good to be true, it probably is.

Don’t Be Afraid to Ask for Help

All the information amounts to a game plan, a sound strategy that, when properly executed, will put you in a position to win the contest of personal finance.

It’s challenging, this task you have set before yourself. Managing your finances, saving money, and building wealth over the long term requires determination and discipline. Along the way, you may encounter discouraging pitfalls and setbacks.

To increase the odds in your favor, consider following the lead of the finest, most talented competitors in elite-level athletics. They don’t go it alone; neither should you. Get yourself a coach, an expert to keep you on track, someone to help you focus on the financial tools at your disposal.

Consider working with a qualified financial advisor on a personalized, achievable plan. The rewards will be worth the comparative pennies.

“We get sick, we go to the doctor. We get into legal trouble, we hire a lawyer,” Johnson says. “Yet, somehow people believe that they should be able to navigate the ever-increasingly perilous financial waters without professional help.

“Financial mistakes, particularly early in life, can be difficult to overcome.”

For those aspiring to the Rich Enough Society from the bottom of a financial pit, connecting with nonprofit credit counseling services may be the escape ladder they crave. Credit counselors help clients understand their financial situations, create personalized remedies, and fashion plans to invest in their well-appointed futures.