Proven Strategies to Become Wealthy

Research shows us the two character traits that can help us all become wealthier

Building wealth can often feel like an uphill battle. Expensive housing, a lacklustre post-covid economy, and a spike in the cost of living can make financial prosperity seem like an elusive dream. Thankfully, according to research on millionaires, becoming wealthier requires only two qualities that anyone can develop: perseverance and resilience.

This groundbreaking research comes from the authors of "The Next Millionaire Next Door: Enduring Strategies for Building Wealth" and the director of research for the Affluent Market Institute. Their findings provide a scientific foundation for understanding the mindset and behaviours that lead to financial success.

This article delves deeper into these two pivotal qualities and explores how they can pave the way to greater wealth. We also give you five strategies you can implement today to create wealthy habits.

Perseverance: The Driving Force of Wealth Creation

Perseverance as defined by the Oxford Dictionary, is "persistence in doing something despite difficulty or delay in achieving success." This quality emerged as a common thread among the millionaires studied in the research.

The authors say:

"To build wealth, to build one's own business, to ignore critics and media and neighbours, you must have the resolve to keep pursuing your goals past rejection and pain.”

They argue that millionaires and other successful people who pursue self-employment, decide to climb the corporate ladder, master an area such as sales, or strive to create a financial independence lifestyle early do so by perpetually pushing on through inevitable obstacles and setbacks.

An Example of Perseverance: Alan DeMarcus

The authors cite the story of multimillionaire Alan DeMarcus as a prime example of perseverance in action.

At 14 years old he started working part-time at his uncle’s air conditioning business. Alan kept working in this business for years, then left for university, after two and a half years in university, he dropped out in favour of a sales role back at the air conditioning business. The company eventually went bankrupt.

However, Alan's perseverance shone through as he leveraged his experience and industry knowledge to build a successful refrigerant-recovery business. It was a risky but rewarding venture during the 2008 Great Recession. His determination paid off, eventually selling the business. Now Alan has a net worth of approximately NZ$15 million.

The Power of Goal Setting

The foundation of perseverance is goal setting. A key finding of the research was the strong correlation between wealth-building and purposeful behaviour. The authors point to the fact that 92% of millionaires develop long-term financial plans, and 97% of them consistently achieve the goals they set for themselves – even if it takes longer than initially anticipated.

This underscores the importance of not just setting financial goals, but also developing the perseverance to see them through. Whether it’s saving a certain percentage of your income, investing in a diverse portfolio, building skillsets to earn more income, or building a successful business, the ability to stick to your plans in the face of setbacks and challenges is crucial.

Resilience: Bouncing Back Stronger

Hand in hand with perseverance is resilience. The Oxford Dictionary defines resilience as "the capacity to recover quickly from difficulties; toughness." In the context of wealth-building, resilience allows individuals to weather financial storms, learn from setbacks, and continue moving forward.

Developing resilience involves a shift in perspective. Instead of viewing setbacks as obstacles, resilient individuals turn them into opportunities for growth and learning. The key is to analyse every challenging experience by considering how it can lead to a positive outcome, and what steps are needed to make that happen. Many millionaires and billionaires declare bankruptcy throughout their careers. The trick is to learn from it and bounce back.

This resilience also manifests as a form of social indifference. When combined with persistence, it helps individuals stay focused on their long-term financial goals and resist the temptation of "lifestyle creep" – the tendency to increase spending as income rises. Resilient wealth-builders are less likely to succumb to peer pressure or feel the need to be big spenders.

As the research points out, "Millionaires aren't focused on what might make them happy today; they're focused on their long-term wealth-building plan." This mindset helps them avoid overspending and impulsive financial decisions that can derail a wealthy life.

Proven Strategies for Building Wealth

While perseverance and resilience are the foundation of wealth-building, following financial strategies are equally important. Here are five proven ways to increase your wealth:

1. Live Below Your Means

A fundamental principle of building wealth is to spend less than you earn. This creates a surplus that is directed towards savings and investments, which will grow and achieve future goals. Poor habits will hold you back. Adopt a frugal mindset, focusing on needs rather than wants, and always look for ways to optimise your expenses without sacrificing quality of life.

2. Invest Early and Consistently

The power of compound interest is quite simply, epic. Start investing as early as possible, even if it is in small amounts to begin with. Long-term investing in a diversified managed fund or low-cost index funds or ETFs is an effective wealth-building strategy for many millionaires. Or, for people in different situations and at different phases of life, other investment choices might make more sense, including:

• Buying a first home,
• Investing in property aside from an owner-occupied home,
• Building passive income, or
• Something else.

3. Continuously Educate Yourself

The world is constantly evolving, and staying informed is crucial.

1. Primarily, invest time and energy in educating yourself. This may take the form of courses, self-development, on-the-job training, formal university-style education, micro-credentials, and so on. The world is changing quickly, and your skills and knowledge must keep up if you are to sustain and grow your personal income. This holds true regardless of how you primarily earn income – whether you are self-employed, an employee, a contractor, or something else.‍
2. Invest time and effort to learn about personal finance, investment strategies, tax efficiency, and the economy. This knowledge will empower you to make better financial decisions, identify new opportunities for wealth creation, and keep what you’ve built.

4. Network and Seek Mentorship

Surrounding yourself with successful, like-minded individuals can provide invaluable insights, opportunities, and motivation. Seek out mentors who have achieved the level of financial success you aspire to and learn from their experiences and strategies.

Putting It All Together: The Path Forward

It is important to remember that true wealth-building is a marathon, not a sprint. It requires consistent effort, continuous learning, and the ability to adapt to changing circumstances. The time to start is today and the first thing to do is plan.

Start by assessing your current financial situation and setting clear, achievable goals. Develop a long-term financial plan that involves saving, investing, and creating additional income streams. As you work towards these goals focus on improving your perseverance and resilience. Psychologist Angela Duckworth's New York Times bestseller “Grit: The Power of Passion and Perseverance” is a great book to read if you want to learn more.

Remember Alan DeMarcus's story – success rarely comes overnight or without setbacks. There will be challenges, unexpected obstacles, and moments of doubt. But by maintaining your perseverance and resilience, you will be equipped to overcome the hurdles and continue on your path to wealth.

The Bottom Line: Become More Wealthy

Becoming wealthy is not an impossible dream reserved for a lucky few. Develop your perseverance and resilience, match it with smart strategies, and you will be on a path to greater wealth and financial freedom.

Keep in mind that true wealth extends beyond mere financial assets. While building your net worth is important, also focus on cultivating rich experiences, meaningful relationships, and personal growth. These elements contribute to a well-rounded, fulfilling life that complements your financial success.

Every financial decision you make today is a step towards the wealthy future you envision. Stay committed, stay focused, and keep pushing forward – your future wealthy self will thank you.

Whether you want to build wealth or just become financially free, it would be the pleasure of one of our trained professionals to help you achieve your goals, so get in touch today for a free consultation.