Always know what your end goal is.Andrew Burton/Getty ImagesSo much about the process of building wealth has to do with cultivating smart habits from the start. These are the behaviors and activities you practice every day, even the littlest ones, that bring you one step closer to your goal.
In their new book "Wealth Can't Wait," entrepreneurs, real estate investors, and self-made millionaires David Osborn and Paul Morris outline how to build sustainable wealth by cultivating smart habits, or disciplines.
Osborn is the operating partner of Keller Williams Realty and managing partner at private equity group Align Capital. Morris is the CEO of the second-largest Keller Williams franchise, located in Beverly Hills, California.
Below, check out their seven strategies to help you build more wealth.
1. Constantly revisit your plan
Andrew Burton/Getty Images "Nothing is more powerful than creating a vision of the near-term, mid-term, and long-term future," the authors write. It's important to "design your life" knowing exactly how you'd like it to end up.
But because life is filled with unexpected bumps and changes in course, it's imperative to revisit your plan constantly. Osborn heads to a coffee shop or juice bar once a week to sit and consider recent accomplishments or setbacks, check in on his progress, and adjust his plan accordingly.
2. Become your own expert
Just because someone is labeled an "expert" at something doesn't mean they can predict the future. Consider the numerous economists who were calling mortgage-backed securities safe "right up until they were nearly worthless," write Morris and Osborn. Or the 2016 presidential election, which Moody's — and nearly every other "expert" under the sun — predicted would be a runaway victory for Hillary Clinton.
Instead of listening to guesses about what will happen in the future, base your investments and business decisions on what works for you now, the authors advise.
"Invest in things that will stand up if circumstances stay the same for a long time or get worse. Have a plan that will create a predictable value-add. Then go for it."
3. Stay in your lane
This tip is simple: Stick with what you know. "Great wealth isn't built by diversifying into a million different things. ... get really good at something that generates revenue and stick with it," Morris and Osborn write.
For these two entrepreneurs, that's real estate. They each have a target annual rate of return of 15%, and as they pay off more of the mortgage on a property every year they add principal growth.
"Compare that to the long-term rate of a diversified portfolio of assets and you'll see why we say don't diversify," they write. That said, once you've built wealth, get in touch with a financial adviser who can help you strategically diversify that earned wealth into new investments.
4. Never stop learning
Notre Dame Admissions/Facebook While using and reusing a proven recipe for success is a smart strategy, it shouldn't invite you to stop learning about ways to improve — whether it's reading books, networking, or studying your industry.
"Knowledge leads directly to a financial outcome," Morris and Osborn write. "That is one of the reasons the entrepreneurs who never quit learning build so much wealth. They keep learning so much that they outpace their peers who take less risk, and receive less reward ... If you keep learning, you will keep earning."
5. Break down your big goals
Sebastiaan ter Burg/Flickr Tackling big goals, like earning a degree, hitting a revenue mark, or selling your business, can often feel overwhelming. Morris and Osborn advise you to break those goals down, because building wealth is not an event, but a process.
"Create chunked-down accountability. Break big projects and big goals into bite-sized pieces with the help and support of strong accountability. To make it stick, throw in a healthy dose of major celebration for hitting each step," the authors write.
6. Put your money to work
It's a great feeling when you start earning more money. But if you're also spending more money, you're not going to get anywhere in the way of building wealth. Rather, Morris and Osborn suggest, live below your means and invest the extra money.
"The wealthy live off cash flow from their investments (or invested cash). Learn from them. Put your money to work," they write. "Think of your extra dollars as employees, and if you put them to work for you, they will one day pay you all you need to live and more."
7. Dismiss the small stuff
"You can't grow big if you work small and manage small," the authors write. Indeed, if you're obsessed with managing every detail, or solving every problem, in your business and in life, you're going to have a hard time staying on track.
Morris and Osborn suggest a strategy: Pretend your hand is a Ginsu knife. Close your eyes and envision all the swirling thoughts in your head, from your agenda for the day to your the calls you need to make to that guy who cut you off on the way to work. Then karate chop your hands around and "unhook" yourself from all the issues that inhibit you from being present and purposeful.
"Sure, it might look silly or seem stupid, but it is less silly and stupid than getting hooked and pulled off your game," they write. "Once you're unhooked, you can be more objective and open when you evaluate your life's path."
