495. The 9½ Habits of Wealth Building (Wealth Series Part 2)
Mar 10, 2025
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True wealth is built on daily habits rather than just numbers. The podcast delves into nine key practices for financial independence, such as living below your means and automating savings. It highlights the importance of tracking your net worth for better decision-making. Continuous learning and reassessing financial goals play a vital role in wealth-building. Personal stories from experts add depth to the advice, making it relatable and actionable. Listeners are encouraged to take charge of their finances and invest wisely.
Building wealth requires practical habits like living below your means and automating savings, rather than just financial knowledge.
Regularly tracking net worth enhances financial awareness and decision-making, helping individuals understand their financial health better.
Deep dives
Building Wealth Through Habits
Developing effective wealth-building habits is essential for financial success. The concept begins with understanding financial wealth as having unearned income that allows individuals to pursue their passions without the pressure of needing to work. Establishing habits focuses on practical actions that lead to saving and investing, rather than just acquiring knowledge. Small, consistent actions over time can lead to significant changes, emphasizing the importance of adopting habits that promote financial health.
Live Below Your Means
The foundation of building wealth lies in the habit of living below your means, where spending is less than income. This principle emphasizes that without saving, there can be no investment, making it critical to control spending behaviors. Many people struggle with this due to overspending or debt accumulation, often exacerbated by poor financial education early in life. By committing to live on less than what is earned, individuals can create a surplus that can be allocated toward savings and investments.
Automate Savings and Payments
Paying your future self first through automated savings is a crucial strategy in wealth building. Automating a portion of each paycheck into savings or investment accounts ensures that funds are set aside before they can be spent. This approach helps individuals align their spending with their financial goals, preventing the common pitfall of spending the entirety of one’s income. Leveraging payroll or banking systems for automatic transfers can simplify this process, fostering consistency in savings habits.
The Importance of Tracking Progress
Tracking your net worth is an essential habit that allows for better financial decision-making. This practice involves regularly calculating assets versus liabilities to get a clear picture of one's financial health. By updating this figure, individuals can learn how their financial decisions impact their overall wealth and recognize the need for adjustments. Gamifying the tracking process can motivate individuals to improve their financial situation and maintain awareness of their goals.
Wealth isn’t built in spreadsheets. It isn’t just about understanding finance books or listening to podcasts. True wealth is built in habits—the actions we take (and the ones we avoid) every single day.
In part two of our special wealth-building series, Jay Papasan shares nine and a half habits that can put you on the path to financial independence. From living below your means to investing wisely, Jay explains the foundational steps that allow you to accumulate and grow wealth over time. He shares his personal experiences, lessons learned the hard way, and insights from financial experts like Dave Ramsey and Morgan Housel.
Those nine habits are:
Live below your means
Automate your savings
Pay down your debt
Maintain an emergency fund
Have clear financial goals
Invest wisely
Learn continuously
Track your net worth
Pay cash for luxury items
If you’re looking to take control of your finances and make your money work for you, this episode gives you the step-by-step habits to get started.
Challenge of the Week:
Go to the1thing.com/networth and download the net worth tracking worksheet. Whether your net worth is big, small, positive, or negative—just calculate it. This will serve as your foundation for all future financial decisions.
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To learn more, and for the complete show notes, visit: the1thing.com/pods.
We talk about:
The power of automating savings and paying your future self first
How tracking your net worth creates awareness and better decision-making
Why building small financial habits compounds into long-term wealth