Many people see wealth as an endgame. When they’ve earned enough for their net worth to require that second comma, they’ve really accomplished something. However, the truly wealthy know that reaching their first million is only a steppingstone. Adopting financial habits that help them continue to grow their wealth is the ultimate goal.
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If there’s one person who knows how to help wealthy people boost their value over time, it’s Malik S. Lee, a financial expert and the founder of Felton & Peel Wealth Management. Lee has nearly 20 years of experience working with affluent people in their prime earning years.
Lee shared his insights about the habits he’s seen his wealthiest clients adopt in an article for Business Insider. There’s a lot that everyday people — whether working toward their first million or trying to grow their existing wealth — can learn from his expertise. Here are three common traits of his wealthiest clients.
While it’s tempting to imagine that the rich spend most of their money on luxurious mansions and cars that would make your eyes pop with envy, that’s just what movies and TV portray. In reality, Lee says most of his wealthy clients prioritize putting as much money as possible into savings.
Despite the common expert suggestion that people save roughly 10% to 15% of their gross income, with adjustments when their financial situation changes, Lee’s wealthier clients aim higher — consistently saving 25% or more of their gross income each year.
“When I look at my most successful clients, they’ve managed to maintain this savings rate even at various income levels, from those with extremely high annual earnings to retirees who don’t receive earned income at all,” he wrote.
Even if you’re not yet at a level where you can put away 25% of your income into savings, Lee recommends starting with at least 10%. The important thing is to begin somewhere and build from there.
Earning wealth is one thing; protecting it is another. Lee cautions his clients to prepare for challenges ranging from market volatility and bad investments to inflation, overspending and even lawsuits. While you might not need to worry about being sued over your brilliant invention, understanding the market and determining your investing style are key to maintaining your wealth.
