10 Habits of Self-Made Millionaires That Could Make You Rich

If you weren’t born rich but you dream of getting there someday, good news: Dreams do come true. According to “The Millionaire Next Door,” an enduring 1996 bestseller that has been updated since — the latest edition was released in 2016 — 80% to 85% of millionaires are self-made.

About 2.5 million Americans became millionaires in 2022, according to Credit Suisse. If 80% to 85% were self-made, that means around 2 million to 2.1 million people earned their second comma last year alone through hard work, cautious risk, stick-to-itiveness and luck — but not inheritance. 

Each of them is an individual, but self-made millionaires tend to share some common traits. Want to join the club? Consider adopting the habits of people who made themselves rich.

The popular image of the American millionaire is one of high-end extravagance and fast-lane excess — all captured on Instagram, of course. The reality is that first-generation rich people often save their way to wealth through disciplined restraint and small spending.

CNBC interviewed various self-made millionaires, who were mostly in agreement that while you shouldn’t deprive yourself of life’s small pleasures, you should avoid splurging and impulse purchases at all costs.

According to “The Millionaire Next Door,” self-made millionaires tend to know how much they spend on food and other household expenses every month and tend not to spend a lot of money on expensive clothes.

Business News Daily cited Fidelity Investments data that said 88% of all millionaires are self-made — slightly more than the previous standard. No matter the percentage that separates the two groups, one differentiator sets them apart more than all the rest: how they grew their fortunes.

Self-made millionaires tended to rely on capital appreciation from investments — as well as salary, stock options and profit-sharing. Those who inherited their wealth were more likely to cite entrepreneurship or real estate.

Financial guru Ramit Sethi told CNBC that investing in stocks is the best thing young people can do to one day become millionaires. Despite the market’s ups and downs, according to Sethi, stocks are still the surest way to generate wealth in the long term.

Gallup research shows that investors under 35 avoid stocks by much larger percentages than their older counterparts. They might be wise to change their ways and follow Sethi’s advice. According to “The Millionaire Next Door,” self-made millionaires tend to keep more than 30% of their wealth in stocks.

A CFP who handles millionaire clients told CNBC about a habit regular people could copy: avoiding consumer credit debt. The whole point of investing, after all, is to earn compound interest to become wealthy over time, which is a futile effort if the bank is collecting it from you in the form of revolving debt.

As the saying goes, those who understand compound interest earn it; those who don’t, pay it.

In writing for Acorns, Tom Corley, author of “Rich Habits: The Daily Success Habits of Wealthy Individuals,” said that more than three-fourths of the millionaires he studied were self-made — and he studied 361 of them.

Nearly all had more than one income stream, 65% had three sources of income, 45% had four and 29% had five. Each new source of income gave them new money to leverage and invest in starting another.

Buy and hold is the gold standard strategy for long-term investors — but self-made millionaires make it their mantra for motor vehicles, too. The CNBC CFP said that most of his wealthy clients buy their cars instead of leasing them and retain ownership for as long as practically possible.

“The Millionaire Next Door” author backs that up by saying that more than four out of five millionaires buy instead of leasing. Fewer than one-quarter buy new cars — they opt for used vehicles, instead.

None of the self-made millionaires that Corley interviewed got rich quickly. In fact, one of their most common traits was perseverance: It took the average millionaire 32 years to build wealth. The majority of self-made millionaires in his study didn’t tally that second comma until they were between the ages of 46 and 60.

Just before the COVID-19 pandemic, CNBC reported on a phenomenon that saw ambitious entrepreneurs and investors paying big bucks for mentorship — one 31-year-old self-made millionaire spent $70,000 for six months worth of mentorship. Although that success story said the guidance he received was well worth the expense, you don’t have to pay for it.

Celebrity billionaires like Richard Branson, Bill Gates and Mark Zuckerberg are all on record talking about the value of their mentors, as are garden-variety rich people who lent their insight to books like “The Millionaire Next Door.” They got their mentorship the old-fashioned way — for free.

In many cases, those who succeed go on to become mentors themselves.

As previously stated, self-made millionaires tend to rely less on entrepreneurship and more on investing and compensation — and not just salary. According to CNBC, self-made millionaires tend to milk their careers for all they’re worth.

That means getting the highest employer match possible on your retirement plan, paying less for employer-based life and disability insurance and taking advantage of HSAs, low-cost employer legal services and employee stock purchase plans.

Corley, the author who spent five years studying wealthy people for “Rich Habits,” told Business Insider about some of the traits that bind the hundreds of self-made millionaires he studied. A clear pattern emerged: They actually do the things that most of us know we should be doing but often don’t, including:

• Reading frequently
• Exercising
• Eating well
• Getting up early
• Sleeping at least seven hours per night
• Volunteering
• Setting and pursuing goals
• Practicing good etiquette