Ten Habits to Make You Rich

Build habits which will give you more of this

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Over the life time of this blog I have been making my way through Tom Corley’s thirty habits in his book, Rich Habits Poor Habits. So far I have looked at ten of them, so I thought that it would be a good point to take a breath, remind myself of what they were and have a look at how I’m getting on with trying out some of his ideas. If you’ve missed any of the posts I’ll link back to each one for you below so you can check out the full details. I will also let you know other resources that I’ve come across recently which may help you if you want to work on a certain area.

So here we go…

Number One – I will adopt good daily habits and follow these good daily habits every day

I’ve been doing some reading about habits recently as I am re-reading James Clear’s book ‘Atomic Habits’ and making some notes. I was going to write a post about it, but Latestarterfire beat me to it, so I would just suggest that you read her post. You can also listen to James Clear talk about his book on the Afford Anything podcast.

During another, more recent episode of Afford Anything, Paula Pant’s interviewee, Kristen Berman, claimed that habits are overrated and you should foster one time decisions that force behaviour change e.g. if you want to save, set up a direct debit to your savings account from your current account on pay day or if you want to walk more, get a dog as it will force you to go out twice a day no matter what the weather. (By the way, if you are thinking of getting a dog, then I would strongly recommend reading Chrissy’s post on her recent decision to give a home to a four-legged friend). Although Kristen almost dismissed habits, much of her advice about cultivating behaviour change was similar to that of James Clear so it is worth a listen to both of the episodes.

Number Two – I will define my dreams and then create goals around each dream. I will focus on my dream-goals every day

This is such an important area. Many of us plan for our weekends and our holidays, but we don’t plan for our lives, we don’t think about where we want to end up. We just follow the same route as everyone else, school, maybe university, job, long term relationship, children, grandchildren, retirement, death. A lot of that may be very enjoyable (except for the death part, obviously), but there are other possibilities, other realities, you just have to be brave enough to be different. For me this is a constant work in progress as I am still working out what my dreams and goals are. How about you? Is your life going to way to you want it to? Are you just doing what is expected of you by others rather than making a conscientious choice? If you want some help setting goals then listen to this podcast by Natalie Bacon.

Number Three – I will devote at least thirty minutes each day to increasing my knowledge and improving my skills. I will invest in myself every day

I have certainly improved my knowledge over the past few months through reading and listening to podcasts, but my skills are probably much the same. In a bid to invest in myself and this blog I have recently purchased the Genius Blogger’s Toolkit, an amazing package of courses, which should help me to develop ‘A Simple Life’ over the next six months. So watch this space!

How are you increasing your knowledge and skills? There is so much free information available these days. Whether it’s online or from real books from the library don’t let yourself stagnate. Learning shouldn’t just be something that you did at school.

Eat plenty of this to keep you healthy

Number Four – I will devote thirty minutes to exercise every day. I will eat healthy food every day

I manage the healthy eating part of this most days, but it is the exercise portion which I am still struggling with. I have been doing a small amount of jogging a couple of times a week and when we had a trainee assistance dog recently I did do a lot more walking, but on many days I won’t even do 2000 steps. Basically, I could do much better and it is definitely an area I need to work on, probably like most of us.

Number Five – I will seek to build strong relationships with other success-minded people

I have been making an effort to keep some notes on other professionals who I meet through work; details they tell me about themselves so that I can refer to them if we are going to meet again and ask them questions, showing that I have remembered what they told me before. Okay, I haven’t remembered, I’ve written it down, but I’m only human and the more I chat to someone about their lives the more details that I retain. I am hoping this will help build relationships at work. One difficulty is that I don’t actually want more success in my job. I am content with my role and plan to do this until I retire.

As for in my personal life I struggle to find anyone who is interested in personal development or FI/RE in real life and just rely on my virtual ‘friends’. I am trying to make an effort to join in with local events e.g. there was a community cinema event last week and recently I went to see a play in the village hall.

How do you connect with likeminded people and where do you find them? Are your friends interested in personal development?

Number Six – I will live every day in a state of moderation

In many ways I am a moderate person. I am calm and not subject to extremes of emotion, but my savings rate is not moderate, it is extreme and so should yours be. How else can we achieve our financial goals otherwise? This month we are living out of the freezer in a bid to save money on food and so far it is going well. I’ll let you know how we get on in my usual monthly review.

Number Seven – I will take action on my goals every day

This is hard as my goals are personal rather than work ones and I don’t always seem to find the time or I am too tired to work on them. If I take the week as a whole I do feel as though I make progress, but finding the time to work on the blog is hard. I have been helping Mr Simple with some DIY for a couple of evenings this week and last week I had social engagements on several evenings. When I come home at 10pm I just want to go to bed rather than turn on my computer and write an article. Basically, this is a work in progress.

What are your goals? How do you manage to make progress on them? Have you tried writing a monthly review to reflect on your progress? I think this is such a good way of seeing how far you’ve come.

Write down every day what you are grateful for

Number Eight – I will engage in rich thinking every day

The practice of gratitude is one which I used to do, but it has fallen by the wayside. I have just started reading ‘The Miracle Morning’ by Hal Elrod and one of his six activities for the morning is ‘scribing’, which can just be writing about what you are grateful for. Whether or not I will be adopting his advice for how to structure the beginning of my day is yet to be seen, but I do feel that often we look on the bad side and are prone to moaning, so a focus on what we are grateful for can only be a good thing.

Number Nine – I will save ten per cent of my income and live off the remaining 90%

This is an area in which as you know I am ahead of Mr Corley as I save 16% as well as paying double our mortgage payment. If you don’t currently save anything though it would be a good starting point.

Number Ten – I will control my words and emotions every day

I’ve already mentioned Natalie Bacon, who is one of my favourite podcasters. She is rather an over-excited and very ‘American’ presenter (sorry to any of you from across the water who might be reading this), for whom everything is ‘awesome’, but nevertheless her advice about modifying your thought processes is amazing. I continue to meditate most days and look forward to her weekly advice which is always interesting and gives a new perspective on life. I cannot recommend her work enough as she is fascinating and her shows are usually fairly short, 20-25 minutes.

So that’s all the habits that we have looked at so far. Each one could be a book in itself. I don’t hear Rich Habits Poor Habits mentioned often, but it is such a fascinating and useful piece of work as it is not just his views on how to get rich, but written after he carried out a study of people who grew rich. If you are interested to find out more check out his book or stay tuned as I will be considering the rest of his habits over the coming months. And if you’ve made any progress in these areas or have any questions just let me know. Or, just fill in the blank: I will work on Tom Corley’s habit number ___ over the next month.

Creating Peace of Mind

Having some of this stashed away for an emergency reduces stress when you encounter a bump in the road

I haven’t had much luck with my car recently. You may recall that a few days after I returned from my holiday with my mother someone pulled out of a side road and crashed into the side of my car. Fortunately he wasn’t going very fast and swerved once he saw me coming, so the damage was limited to dented bodywork. That’s all going through the insurance at the moment and my car has been fixed and looks fine.

I was glad to get my car back after having to drive a hire car for several days, but then last week it let me down. I had travelled for about an hour from home to do a visit for work and as I turned the car on when leaving, the radio didn’t come on. I just thought, oh God, the radio has packed up now and was frustrated that I wasn’t going to be able listen to my podcast on the way home. I then started pulling off and the dashboard display went blank except for a few red lights, one of which said ‘P/S’. The steering also became difficult. I turned off the engine and got out the car user’s manual. There was no information about what the ‘P/S’ light meant, but it said that the vehicle should be taken directly to the garage.

Unexpected events can be very stressful

I sat there for a minute or so and considered calling the recovery service, but decided to turn the car on again and low and behold the radio and the dashboard display came on. I decided to drive home, avoiding the motorway in case the car failed when going 60mph. It was a very stressful journey and I was relieved to get home safely. When I did so I rang the local garage and arranged to take it in the following day. They identified a problem with the battery which has now been replaced and I am hoping this has solved the fault.

All the way home I tried to tell myself that it could be worse. The fact is that whatever was wrong with the car I have money in the bank to pay for it to be mended. In fact I have enough savings to buy a new car (well a second-hand one) with cash tomorrow. Now I don’t tell you this to brag and I don’t want to have to buy a new car, but I do have the luxury of being able to do so if I need to.

This all got me to wondering what it must be like not to be able to pay for those problems that crop up. I need a car for my job and so couldn’t go without one. I would therefore have had to get a bank loan or a car on credit. This would mean paying interest. If it was just a matter of paying for repairs that would be even more difficult if you didn’t have money in the bank. It might mean paying on a credit card if you have one or getting a pay day loan. Both of these mean that the repairs are likely to cost you more than you actually paid for them.

I felt stressed at the thought of having to get my car repaired or to have to buy a new one, but was at least able to tell myself that both of these options were open to me and within my means. I can only imagine how much more stress I would have felt if that were not the case.

Many financial bloggers recommend building up an emergency fund and the events of last week are a prime example of why this is so important. Life is a series of problems that we are given to solve and some, if not all of them, require money. Even if I could fix the car myself I would still have had to buy a new battery to install. We all like to think that things won’t happen and we’ve got much more interesting things to spend our money on than insuring against the future and events which in reality are inevitable.

So if you haven’t got an emergency fund then I would strongly encourage you to start putting away money for one. In the long run it will save you money as you will be able to avoid the interest payments associated with loans and credit card payments.

Saving for the Future

Not the best place to put your savings, but it would be a start

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Tom Corley’s ninth habit, from his book, Rich Habits Poor Habits, is a building block of financial independence :

I will save 10% of my income and live off the remaining 90%

In the world of FI/RE 10% is a miniscule amount, but for many people it is a start as the majority of the population are saving little if any of their income. I am only saving 16% of my income at the moment, but I am overpaying the mortgage. If I included the mortgage overpayment as savings, I would be saving 38% of my income. Part of the problem is that I am the only one in the house paying the mortgage, overpaying the mortgage and paying all of the bills. If I was only paying half of the mortgage, no overpayment and only half the bills I would be saving about 45% of my income. This is still a lot less than those hardened savers of the FI/RE movement, but still a great deal more than most people.

How much you want to save depends on your circumstances. If you’re young and don’t want to retire early and if you’re already paying into a pension then saving 10% of your income may be okay. If you want to FI/RE in fewer than ten years then the number I often see when it comes to saving is around is 70%. That involves a drastic cut in your expenses. One of the cornerstone articles on how much and for how long you need to save can be found here written by the now legendary Mr Money Mustache.

Successful people monitor their finances

Do you have a handle on your money? If you’ve come to this site because you’re interested in FI/RE you probably have, but maybe you are interested in wellbeing and found your way here. If so, do you have a monthly, annual and/or five-year budget plan? Budgeting always sounds very boring, but it can really take the stress out of your life. It doesn’t mean that you have to cut back on everything, but you can spend in the areas that mean a lot to you in the knowledge that you’ll still be able to pay the bills and eat, come the end of the month.

Don’t know where to start, just try tracking your expenses for a few weeks to see where you spend your money – whether it’s on a spreadsheet or good old-fashioned pen and paper. It may come as a surprise when you find out where it’s all going. Then have a look at this post by Radical Fire about creating a budget.

Retirement may seem a long way off, but it might come sooner than you think

Successful people have a retirement plan

In the UK all employers must provide a pension scheme for those employees over 22 who earn at least £10,000 per year and they will enrol you in this automatically. From April 2019 you pay a minimum of 5% of your salary and your employer pays 3%. Unless you choose to opt out the majority of people will therefore already be saving 5% of their income. How this money will increase over the course of your working life is not certain and whether you will get a state pension on top of that in the future is I think debatable. Putting aside just 5% of your salary into a stocks and shares ISA will bring your savings up to that 10% recommended by Tom Corley.

Rich Habits Poor Habits states that in contrast to rich people, poor people have bad habits. They live payday to payday, are poor savers, their credit cards are maxed out. They do not contribute to retirement plans, some gamble excessively and see the lottery as their retirement plan. They are unwilling to alter their lifestyle in order to save.

So which one of these are you? Are you the person who is going to be rich in later life as you’re planning for the future or are you living payday to payday, spending money on frivolous items such as the latest mobile phone or frittering it away on coffees and lunches everyday when you could bring your own? It may seem really boring to think about this and the future may seem a long way away, but your older self will thank your for the good financial decisions that you make today. If you want to learn more about the habits of the rich then don’t forget to have look at Tom Corley’s book.

September Review

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The main event this month was my holiday in Italy with my mum. Although I spent money on the holiday, this all came out of money I had saved throughout the year.

Mr Simple and I continued with the 5:2 diet, although both had a break from it when I was on holiday – Mr Simple put on 1½lbs, but lost it again the following week and then over the last week he lost 2½lbs more.

The Labrador retriever cross that has stayed with us a couple of times came back for another week. He came to the airport with Mr Simple to collect me and Mum. We have now said our final goodbyes to him and have an Alsatian staying with us for a little while. Despite looking slightly scary he is as daft as a brush. Mr Simple his extra weight loss last week as due to all his walking with the dog.

Someone pulled out of a side road and crashed into my car just after I came back from holiday so I had a hire car for a week. It was a Vauxhall Astra, only a year old and just under £20,000’s worth of car. Almost everything was automatic – windscreen wipes, lights – you didn’t have to think for yourself. It also had integrated sat nav and digital radio. Quite a step up from my nine-year-old Toyota Yaris, worth about £2000, but not something that I would chose to money on in the future.

I had my bi-monthly meet up with old colleagues in our usual cheap eatery and spent under a tenner on food – drinking tap water – something I missed in Italy. It was also our village women’s group meet up in the pub and then I went for drinks at a neighbour’s house. Her home is enormous – like a mini-hotel with at least five bedrooms. She is certainly not an example of the frugal lifestyle as only her and her husband live there. I think though that she may be an example of FI/RE as she is probably about my age and yet she doesn’t work. I heard that she had a big redundancy pay out and that is how she affords the house and not to work.

I finally updated my mobile phone as it will stop supporting Whatsapp in December and it crashed the other day – I had to take the battery out to stop it vibrating. The chap in Carphone Warehouse seemed quite amused by the model I had. I was paying £9.50 per month and have increased now to £9.99 so it will hardly break the bank and the phone is much better. I was absolutely gobsmacked at people coming in and asking about the latest phones at £60 a month. I know that it is about deciding what is a priority in your life and spending your money on that, but I struggle to see what an iphone (which I do have for work paid for by my employer) can do that my £9.99 Alcatel can’t – for those of you in the know I would love to be enlightened. As well as the 49p extra per month I have had to spend £7.99 on a new case as my old one won’t fit the new phone.

As well as my phone almost dying the bulb in my sunrise lamp blew this week. You don’t realise how much you miss something until you don’t have it anymore. I had forgotten how horrible it is to wake up in a dark room and have to turn on the bedside lamp, blinding you as you do so. Mr Simple has ordered two new bulbs for me so I will always have one spare in the future and won’t have to be without it again. As an aid to making winter mornings easier I can’t recommend it enough. It may not be cheap, but if you are trying to get up earlier in order to expand your morning routine I think that it is invaluable.

So, let’s look at the figures…

Another good month on progress with the mortgage. The standard monthly payment was £524.30 and then we made an overpayment on the mortgage of £594. This leaves the balance on the mortgage standing at £75,286.14.

Savings are a grand total of £35,725.91. My Vanguard stocks and shares ISA made £58.75.  As usual I saved £185.00 to Vanguard and £250.00 to Nationwide. As I write today is payday and I have found out that I have received a pay rise, which has been backdated to April. It is only £75 per month before tax, but better than nothing and the backpay comes to just under £300. It will probably go into my ISA, but I haven’t decided yet.  

Interest on Marcus account which I am using for stoozing was a grand total of £7.91.

General spending

Food £151.66 – slightly over budget. Mr Simple spent some money at Waitrose when I was away. We also did a big Tesco shop and so this included cleaning items, which all come under the umbrella of food. I am hoping that I won’t have to do another large shop until November.

Petrol £88.52- under budget again this month, which is expected as I was on holiday for a week.

Pilates £8.00 – missed two sessions due to being on holiday and then the teacher was on leave last week.

Toiletries £32.57 – I spent over budget this month, although only slightly as the budget is £30.00 and I bought loads – two tubes of hair removal cream, shampoo, conditioner, two deodorants, intersticial dental brushes, four bottles of shower gel, body lotion, two tubes of toothpaste, moisturiser and facial wash. Many of the products were from the Tesco essentials range so extremely cheap e.g. shower gel at 28p a bottle.

Social £42.40 – two meals out with friends, a drink in the local pub, theatre tickets for a play next month and a ticket for the community cinema which is starting next month in the village.

Miscellaneous £59.45 – as usual this was items bought by Mr Simple, including a new digital radio for the kitchen as the last one finally gave up the ghost, mobile phone case and two bulbs for my sunrise lamp.

Expenses from bills account – expected annual/regular expenses

Physio session £32.00 – again only one session this month mainly due to being on holiday.

Gifts – £10.00 towards a leaving present

Spending money for Italy holiday – £176.53, which went on the extra trips and lunches

Car insurance £211.17

So that’s it. I’ve got some money left in my current account so I’ll probably treat myself to a couple of books and then transfer the rest to my ISA.

How was your September? I’d love to know.

The Power of Positive Thinking

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As you know I’ve been working my way through Tom Corley’s book Rich Habits Poor Habits. His eighth habit focuses on positive thinking, or as he calls it, rich thinking, which he suggests you should engage in every day.

In order to cultivate a positive attitude he says that successful people use the tool of gratitude. He believes that gratitude is the gateway to optimism and a positive mental outlook. You can simply think about the things in life which many of us take for granted and yet lots of people in the world don’t have e.g. I have a home, I can put food on the table. By recognising the things in your life that you are grateful for this shifts your outlook on life from negative to positive.

For me it is about changing your view from a ‘glass half empty’ one to a ‘glass half full’ one. You always need to try to look at the positives in a situation. One thing that I didn’t share with you about my recently holiday in Italy was that my mum fell over a couple of days before we were due to leave. Unfortunately she had a lot of bruising to her face and we ended up having to use the Italian health service (which was excellent I have to say). This was obviously all extremely upsetting and we ended up missing the trip on the last day.

Understandably Mum didn’t want to go down to the restaurant to have our meals and so instead we ended up taking them on the balcony of our hotel room. Up until that point we had had to share a table each evening with a couple who would not have been our first choice to spend our holiday with. The events which happened meant that we no longer had to do so and we enjoyed an evening meal, a picnic lunch and our last breakfast in Italy, on the balcony. Now, I’m not saying that what happened to my mum was a good thing, but I have to say that I really enjoyed those meals sitting and chatting together looking out at the glorious view. Part of the reason for going away on holiday together each year is that it is a chance to catch up as we don’t see each other very often. This enabled us to do just that. A very difficult situation had a positive spin off.

As well as gratitude another tool recommended by Tom Corley to alter your mindset is positive affirmations. These represent the picture of the individual you hope to be. For example, I am confident, I live my life in moderation, I am successful, I accomplish my goals.

He recommends making a list of positive affirmations and keeping them with you. These should be reviewed once in the morning, once in the afternoon and right before you go to sleep. Eventually they will take root. Events and circumstances will begin to manifest themselves round your positive thinking and opportunities will appear seemingly out of thin air.

One of my favourite life coaching podcasters, Natalie Bacon, also talks about affirmations. She believes that the trick with them is to make sure you believe them. Ones she uses are, ‘bad things are supposed to happen’, ‘nothing has gone wrong’. For me her ones are more like things that you would say to yourself in difficult situations rather than morning, midday and evening.

For example, a couple of weeks ago someone crashed into my car. Fortunately the accident wasn’t too bad, but I had to drive a hire car for a couple of weeks whilst mine was repaired. I am not a confident driver and having a large, fairly new and technologically advanced car to drive freaked me out a little. The handbrake was a button rather than a lever and I was so nervous about doing hill starts. I was also worried about having to park it in a multi-storey car park. Despite my fears I did manage to drive it without incident for the time that I had it, but for the first couple of days I would talk to myself, telling myself that I just needed to remain calm, that I can do this, that I am a competent driver. It’s the things that your best friend might say to you in the same situation.

Returning to the idea of positive affirmations to read each day, I’ve tried to think about what mine should be. It’s something that I’ve not tried before. I remember being at a training event at work last year and one of my colleagues said that she does this every morning. One that came to mind initially was, ‘I enjoy my work’. On the whole this is true, but sometimes I feel that I lose my way and see it as a chore. Reminding myself that I have a career that I chose and that has the potential to make me happy, even if the day has been tough, is no bad thing. This is definitely an area that I need to work on and I may just make it one of my October intentions to come up with some daily positive affirmations to consider.

So, do you have any suggestions for cultivating a more positive outlook in life? What tools do you use to help you manage stressful situations? Please let me know in the comments below and don’t forget to check out Tom Corley’s book.