1. They avoid debt

This may seem obvious, but dodging any debt is certainly a habit that can help your overall financial picture. Outside of the mortgages on their home, Daugs says that his clients make sure to reduce and eliminate all debt.

"If you want to build wealth, you cannot waste money on paying interest on consumer credit, such as credit cards and even car loans," Daugs says.

Because most credit cards charge notoriously high interest whenever you carry a balance, prioritize paying these balances off in full every month (and on time to keep a good credit score). Only charge what you know you can pay off and avoid store credit cards in general. (They are known for having low credit limits, high interest rates and limited usability.)

2. Investing Only in Intangible Assets

When people think of investing and investing strategies, stocks, and bonds normally come to mind. Whether this is due to higher liquidity or a smaller price for entry, it doesn’t mean that these types of investments are always the best.

Instead, UHNWIs understand the value of physical assets, and they allocate their money accordingly. Ultra-wealthy individuals invest in such assets as private and commercial real estate, land, gold, and even artwork. Real estate continues to be a popular asset class in their portfolios to balance out the volatility of stocks. While it’s important to invest in these physical assets, they often scare away smaller investors because of the lack of liquidity and the higher investment price point.

However, according to the ultra-wealthy, ownership in illiquid assets, especially ones that are uncorrelated with the market, is beneficial to any investment portfolio. These assets aren’t as susceptible to market swings, and they pay off over the long term. For example, Yale’s endowment fund has implemented a strategy that includes uncorrelated physical assets, and it returned an average of 10.9% per year between June 2010 and June 2020.



How much time self-made millionaires devote to new income streams

If you have a consuming 9-to-5 job and/or other sorts of commitments at home and at work, carving out the time to devote to starting another income stream might seem daunting. Based on what I've learned from my research, you can start small:Set aside no more than five hours each week and begin slowly building something new. 

If you're not sure where to start, think about the subjects, skills, and activities you are most passionate about, and explore the ways that you could monetize one of those

In my research, other than consistent saving and investing, passion was by far one of the most important shared attributes of the self-made millionaires in my study. 

VIDEO 2:45 02:45 Barbara Corcoran: How your hobby can become a side hustleEarning

Video by Stephen Parkhurst

Risk Takers

Self-made millionaire Risk Takers are individuals who take some risk in the pursuit of wealth.

They are typically business owners, entrepreneurs, aggressive-savvy investors in stocks or real estate or they create some product or service that is so unique they are able to demand a significant premium in return for the purchase or use of their product or service.

Self-made millionaire Risk Takers were among the wealthiest in my study, with an average net worth of $7.4 million.

Being a Risk Taker is only for the bold and courageous.

It’s the high-risk path to wealth accumulation.

It requires courage, persistence, cunning and a hard core work ethic.

This article is devoted to the Savers out there – those who wish to become millionaires with little to no risk.

In my study, I found that all Savers have a specific money mindset.

Below are some of the top money strategies of self-made millionaire Savers:

Millionaires Are Made, Not Born

Despite what society might believe, only a small number of wealthy people inherited their money.

The overwhelming majority (79%) of millionaires in the U.S. did not receive any inheritance at all from their parents or other family members. While 1 in 5 millionaires (21%) received some inheritance, only 3% received an inheritance of $1 million or more. In fact, the majority of millionaires didn’t

In fact, the majority of millionaires didn’t even grow up around a lot of money. According to the survey, 8 out of 10 millionaires come from families at or below middle-income level. Only 2% of millionaires surveyed said they came from an upper-income family.

The Four Paths to Seven Figures

In writing for CNBC, financial expert and author Tim Corley outlined the results of research he conducted for one of his books. The results revealed that people tend to follow one of four paths to becoming millionaires.

The easiest way, and the only way that comes with something like a guarantee, is what Corley calls the saver-investor path. Around 1 in 5 millionaires in his study banked their first million in their mid-to-late 30s despite their middle-class incomes. They did so by living frugally and by saving and investing at least 20% of their income consistently from early on in their working lives.

The hardest path — followed by about 28% of millionaires — is the so-called dreamers path. These millionaires strike it rich by beating the odds at a high-reward, low-probability endeavor like becoming a successful actor, athlete, musician or millionaire business owner. The lifestyle is defined by long hours, lots of stress and years of toiling without a steady paycheck. When they hit, however, they hit big — their average net worth is $7.4 million, the highest in the study by far.

About 1 in 3 millionaires made their money through what Corley calls the company climbers path. Ascending the corporate ladder into executive territory lands the average climber $3.4 million after 22 years.

Finally, there’s the virtuosos path, which is Corley’s name for the tradeoff of money for knowledge and expertise. About 1 in 5 millionaires takes this route and earns $4 million after 20 years of doing so. Many of those years are spent learning and becoming one of the best in a highly competitive and complicated field like law or medicine, where they’re paid a handsome sum for their standout skills and knowledge.

Learn More: How Long $1 Million in Savings Will Last in Every State

The Pros and Cons of a Live-and-Rent Approach

This approach does require moving about every year, however.

But if you’re a 22-year-old just graduating from college, that means you will own 10 pieces of property by your early 30s. If a 15-year mortgage is obtained and paid off early, several could be owned free and clear. That would provide for a significant stream of income for the investor. From that flow of funds, more properties can be purchased, too, continuing into the future if you wanted to.

Related: Buy A House vs. Rent An Apartment – The Math

About the Author

Andrew Lisa has been writing professionally since 2001. An award-winning writer, Andrew was formerly one of the youngest nationally distributed columnists for the largest newspaper syndicate in the country, the Gannett News Service. He worked as the business section editor for amNewYork, the most widely distributed newspaper in Manhattan, and worked as a copy editor for TheStreet.com, a financial publication in the heart of Wall Street’s investment community in New York City.

#2 Self-Made Millionaires Avoid Want Spending

According to Census Bureau data, there are approximately 30 million other people who make more than they need but who are, nonetheless, one paycheck away from poverty.

These individuals engage in something called Want Spending.

Want Spenders spend more money than they make on their wants. 

  • Want Spenders surrender to instant gratification, eschewing saving in order to buy things they want now: 60 inch TVs, nice vacations, expensive cars, bigger homes and jewelry.
  • Want Spenders routinely gamble away part of their income.
  • Want Spenders spend too much money at bars and restaurants.
  • Want Spenders incur debt in order to finance their standard of living.

Want Spenders create their own poverty. 

They are undisciplined with their money.

They have been brainwashed by advertisers and a consumerist society into buying things they do not need.

When Want Spenders are no longer able to work due to old age, they live out the remainder of their lives in poverty.

They become dependent on family, friends, the government or the charity of others.

Want Spenders rationalise their Want Spending in a number of ways:

  • I’ll make more money in the future
  • I’ll get a better paying job
  • I’ll get a second job
  • I’ll get a raise
  • I’ll get a bonus
  • The economy will improve and I’ll make more money
  • I’ll get more clients or customers
  • My children will take care of me in retirement
  • I’ll move to Florida, or some inexpensive place, and live off Social Security

Examples of self-made millionaires

According to the same Wealth-X study discussed earlier in this article, as of 2018, a little over 265,000 individuals are considered ultra-wealthy, meaning they have a net worth of $30 million or more. Moreover, more than two-thirds are self-made. Here are three famous examples:

  • Barbara Corcoran: The real estate mogul turned Shark Tank investor started her eponymous brokerage business with a $1,000 loan. Under her supervision, shegrew the business into a multi-million-dollar empire that she sold for $66 million in 2001.
  • Janice Bryant Howroyd. The founder and CEO of ActOne Group started her staffing agency with $1,500 ($900 of which she borrowed from her mother), a fax machine, and a phone. She is now one of the richest self-made Black women millionaires in the U.S., with an estimated net worth of $285 million.
  • Warren Buffet. Perhaps one of the most famous and richest people in the world – and technically a billionaire and not a millionaire — Warren Buffett still merits a mention in this list because he is well known for being self-made. The Berkshire Hathaway chairman and CEO made his first millions by running a hedge fund and is known for his principled and sensible approach to investing.

5. Failing to Rebalance a Personal Portfolio

Financial literacy is a big problem in America, but everyone should understand the practice of rebalancing their portfolios. Through consistent rebalancing, investors can ensure their portfolios remain adequately diversified and proportionally allocated. However, even if some investors have specific allocation goals, they often do not keep up with rebalancing, allowing their portfolios to skew too far one way or the other.

A balanced portfolio typically includes the right mix of cash, stocks, and bonds based on a person's age and risk tolerance.

For the ultra-wealthy, rebalancing is a necessity. They can undertake this rebalancing monthly, weekly, or even daily, but all UHNWIs rebalance their portfolios on a regular basis. For the people who don’t have the time to rebalance or the money to pay someone to do it, it’s possible to set rebalancing parameters with investment firms based on asset prices.

What The Wealthy Own

We can also approach this problem from a different direction and a different dataset.

And since 1989, the Federal Reserve produces a Distributional Financial Accounts report every quarter that measures the distribution of household wealth. It’s a marriage of the Financial Accounts of the United States and the Survey of Consumer Finances (SCF).

From 1989 to 2018, the top 1% of wealth in the United States saw their net worth increase by 650%.

The bottom 50% saw an increase of “only” 170%.

This is what each group owned in 1989:

And this is what each group owned in 2018:

Both charts are in trillions of dollars, though the Y-axis labels are different.

The total amounts give you an idea of how the total wealth has shifted around. It’s indisputable that the bottom 50% have been left behind. (one big reason is stock ownership)

But the fascinating chart is this one, which shows the percentage of wealth components (your stuff) for each category, here in 1989:

And then in 2018:

One thing we know from studying the data from the U.S. Census on net worth is that a lot of American’s net worth is tied up in their home equity. We see this in the data from this report too because in 1989 the bottom 50% had 45.9% of their wealth in real estate (their home). In 2018, that number increased to 52.9%.

As for the top 1%, the percentage is 11.7% in 1989 and 11.5% in 2018. That said, I’d imagine that some of that in investment property because one can only own so many homes they live in.

Assets are truly what separates the wealthy from the rich.

That’s some fun data to chew on when you have the time!

The best way to become a millionaire

Now that you know how others made their millions, you may be wondering what you can do to apply that knowledge to your own financial life.

Here are three touchstones of the millionaire’s approach to money:

Diversify your investments

Investing your money in different places helps ensure that you aren’t too vulnerable to risk. That way, if one sector or company fails, you can always count on your other investments to carry you through.

If you’re unsure how to efficiently manage your investments, hiring a financial advisor can help you develop a successful strategy.

Have multiple streams of income

Self-made millionaires almost all optimize their time by having multiple sources of income. 

These can include their employment salary, income from real estate, and dividends from investments in the stock market.


The most important habit shared by all self-made millionaires is saving a significant portion of their income. You should focus on setting aside 10-20% of your income every month and place it in long-term, safe investments. 

Using a bucket system with several different accounts can be a great way to get started.

Bottom line

As you can see from Daugs' 10 habits of his wealthiest self-made millionaire clients, there are a lot of moving pieces to having a solid financial plan. Embracing opportunities to pay off debt, save, invest and learn, all while avoiding potential pitfalls, make a big difference on your ability to build your wealth.

"My self-made millionaires started by reducing their debts to increase cash flow and build their 'rainy day fund,'" Daugs says. Once these were in place, they were then able to incorporate the other investment habits and really grow their assets.

No matter how simple or obvious a money habit may be, the point is that you stick to it. "Discipline is key and with it you can build the financial future you desire," he says.

Information about the Upromise® Mastercard® and Marcus by Goldman Sachs High Yield Online Savings has been collected independently by Select and has not been reviewed or provided by the issuer prior to publication. Goldman Sachs Bank USA is a Member FDIC.

Editorial Note: Opinions, analyses, reviews or recommendations expressed in this article are those of the Select editorial staff’s alone, and have not been reviewed, approved or otherwise endorsed by any third party.


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