9 ½ Habits to Build Wealth (5 Min Read) | Vol. 142

This mirrors the second chapter of a three-part wealth-building series on The ONE Thing podcast. You can follow along on Apple, Spotify, or YouTube. 

March 14, 2025

 “Spending money to show people how much money you have is the fastest way to have less money.” — Morgan Housel

9 ½ Habits to Build Wealth

Understanding frameworks is one thing. Actually doing what it takes to build wealth is another. That’s why this week, we’ll focus on the habits that lead to wealth accumulation.

There’s one habit that makes everything else possible– living within your means. If you can’t live on less than you earn, you’ll never be able to save money. If you can’t save money, you can’t invest money. It’s that simple.

When my wife Wendy and I started our financial journey, we had to be brutally honest with ourselves. Despite both having decent incomes, we struggled with coordinating our spending. We were two people with debit cards and credit cards trying to manage one budget. I still remember the embarrassment of standing at a Target checkout and having my card declined. We weren’t tracking our spending properly. Sometimes we’d have to remove items from our cart or transfer money from savings on the spot. 

It wasn’t easy, but we eventually got it under control. For a while, we lived entirely on debit cards to force ourselves to stay within our means. That simple shift became the foundation for everything that followed. We were able to start saving money. We invested in real estate and businesses. And our net worth started growing. 

9 ½ Habits

1. Live below your means – This is non-negotiable. You cannot out-earn or out-invest poor spending habits. It’s the simplest concept in theory and the hardest in practice.

2. Pay your future self first – Automate your savings. When Wendy and I started, we committed to saving $1,500 a month (about $2,500 in today’s dollars). We knew that this would allow us to buy investment properties every 12-24 months. We had a percentage of every paycheck diverted into an investment savings account. The rest went to our checking for living expenses. You can ask payroll to do this or set it up with your bank. 

3. Pay down high-interest debt – Whether you choose the mathematical approach (highest interest first) or the psychological approach (smallest balance first), eliminating debt frees up resources for investing. This quote from Kent Nerburn says it all: “Debt defines your future, and when your future is defined, hope begins to die. You have committed your life to making money to pay for your past.” Get rid of your high-interest debt and avoid taking on more! 

4. Maintain an emergency fund — Start with $500. This small amount of savings can help you avoid putting small emergencies on a credit card.  Work up to 1 month and then 3 months of living expenses. Three months is enough to ride out most storms. Some prefer up to 6 months. I get it. Whatever helps you sleep at night. Just remember, inthe Path of Money, savings is “dead money.” It actually loses value over time as inflation makes the cost of stuff go up. 

5. Set clear financial goals – Know what you’re aiming for. Our original goal was to achieve $1 million in net worth with $75,000 in passive income in ten years. Those goals shaped our investment strategy. Your goals will evolve, but you need targets to drive your decisions.

6. Invest wisely – This is the twin sister to Habit 5. Make investment choices that align with your financial goals and timeline. Most people are unintentionally too conservative with their investments, putting money in vehicles that won’t get them where they want to go. My 401K was not going to make us millionaires in ten years. We had to choose investment vehicles appropriate for our goals.

7. Learn continuously – My father once told me to start reading the business section of the newspaper every day, even if I didn’t understand it at first. Eventually, it started making sense. Today, I try to read at least 5 books on investing and money each year. Wendy and I also teach wealth-building. Not only have we come to enjoy it, but it also keeps us sharp and our investments smart.

8. Track your net worth – This might be the single most important habit of all after #1. When Wendy and I first calculated our net worth in 2001, it was just $2,200 after a combined 20 years of professional work. Tracking this monthly changed our awareness and behavior in profound ways. You’ve heard it 111 times but I’ll say it again. What you focus on expands. 

9. Pay cash for luxury – If you’re upgrading from functional to luxury, pay cash. Using debt to fund luxury is how many people derail their wealth-building journey. I’m not saying you can’t upgrade to business class for a long trip. If you’re winning the money game, you can treat yourself. I am saying the Aston Martin and the Aspen summer home can wait for you to save and pay cash. 

9.5. Revise and repeat – Periodically check that your habits and systems are still working for you. You will need to pivot occasionally. You may choose to trade up a poorly performing investment for a better one.  If you regularly visit your money, you‘re much less likely to lose it. 

Here is your homework: Go to the1thing.com/networth and download the net worth worksheet. Calculate your current net worth, whether it’s positive or negative, big or small. Put a pin in the ground that says, “This is where I am financially today.” This becomes your footing for all future decisions.

Next week, we’ll wrap up this series by helping you determine your “freedom number” – the passive income you need to support your life without having to work. 

One question to ponder in your thinking time: What’s my biggest financial blind spot that I could change by adopting one of these habits?

Make an Impact!
Jay Papasan
Co-author of The ONE Thing & The Millionaire Real Estate Agent 

PS – As I noted on the podcast, this is for general informational purposes only. The views, thoughts, and opinions should not be construed as financial, economic, legal, tax, or other advice. This newsletter is provided without any warranty or guarantee of its accuracy, completeness, timeliness, or results from using the information.