Most Americans don’t make it to February 1 without abandoning their well-intentioned New Year’s resolutions whether it’s due to a lack of discipline, societal/peer pressure or a busy schedule. The financially successful, however, practice certain habits and avoid making uncharacteristic decisions or changes when the year turns over.
With some exceptions, the majority of people don’t become rich by accident and aren’t born into wealth. Rather, they make their fortunes through hard work and sticking to consistent spending and saving strategies. As such, the rich — when they make resolutions at all — tend to avoid pointless New Year’s declarations and concentrate on achievable result-driven financial goals as they slide into a new year.
If you are looking for ways to stick to your resolutions, try avoiding these eight resolutions wealthy people never make and focus instead on small, realizable goals. If you’re patient, you’ll soon start to see sustainable monetary life improvements in 2024.
1. Setting Vague New Year Goals
Rich individuals are meticulous about what goes out of their accounts and avoid unclear and unrealistic financial goals. Vagueness tends to imply a lack of commitment and can be a waste of time when applied to a New Year’s resolution.
Just as a vague business plan will rarely succeed in securing investor financing, pie-in-the-sky planning won’t bring constructive wealth-building results. As Money.com points out, “That means vague plans to ‘save more money’ or ‘make more money’ are out. Instead, aim for ‘save $X every month’ or ‘get an X% raise.'”
2. Avoiding Research
Having specific, measurable objectives will put you in good stead to succeed financially in 2024. Still, the wealthy are also typically wise when it comes to their financial investments, and most take time to research the best options for their hard-earned cash.
According to Ramsey Solutions, there is a lack of personal finance education in the U.S. which has had lasting effects on Americans even years after they leave high school. Rich people make themselves financially literate early and are continually learning about ways to grow their wealth.
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3. Exceeding Their Risk Tolerance
An investor with a high risk tolerance is willing to chance financial loss for better results. The fact is that risk and reward go hand in hand when it comes to investing, and the wealthy can typically invest aggressively in stocks, bonds or mutual funds because they can afford to lose more.
It’s no secret that a certain degree of risk is required to make money, and if you can afford it, it’s smart to set aside a portion of one’s wealth — perhaps up to 35% — for risk-taking. By budgeting a certain amount of money for investing in less-certain ventures, you can protect the bulk of your wealth and avoid stressing over short-term movements.
But overstepping your risk threshold, or falling for the unresearched “sure thing,” is a risk in itself. If it’s viable, it might be a good idea to consult a financial advisor in 2024. A good advisor can determine your risk tolerance — or the amount you can afford to lose — and help you take steps to grow your portfolio or nest egg.
4. Keeping Resolutions to Yourself
Wealthy people have a habit of setting themselves up for financial success by establishing a strong support network. Sharing your financial goals, especially if you’re struggling to make changes, will make you more accountable and will garner support from close ones and colleagues. “Everyone has problems with money, and yet it’s something that we’ve refused to talk about, which is nuts,” says Berna Adat, author of “Money Out Loud.”
5. Gambling in Life and on Investments
When Tom Corley spent five years interviewing 233 millionaires to find out their common habits, he found that 94% of those surveyed said they never gamble on games of chance or on their finances. Millionaires find creative solutions to obstacles or economic downturns and never rely on random luck or take unnecessary chances on their wealth.
6. Ditching the Contingency Plan
According to a 2016 study on pursuing goals, backup plans can actually hurt primary goals. However, wealthy people rarely decide on a financial course of action without having a Plan B in mind. In fact, business and money decisions are constantly hedged and adjusted based on interest rates and other economic indicators. Regardless of income level, if you want to achieve financial success in 2024, you should always be ready for the unexpected. “Staying the course” without regard to outside forces is a big mistake.
7. Wasting Money on Memberships and Subscriptions
Getting in shape is a noble New Year’s endeavor, but if it’s something you’re not going to follow through with, then ditch the dream and any other memberships to clubs and services that pile up as quickly as your guilt. The same goes for helpful financial apps and subscriptions, which might seem like a good idea at the time, but quickly become a waste of money if you don’t use them.
Instead, invest time and money in yourself by taking a class, learning a new skill or even planning a trip with money that was earmarked for these types of purchases. According to Corley’s study, 49% of millionaires spend a few minutes each day to learn new words, 61% shared that they practiced new skills for a minimum of two hours, 63% said they listened to audiobooks and 71% said they often read self-help books and motivational biographies. Not only do people who invest in themselves add exciting facets to their lives, but they might even find new and lucrative career options along the way.
8. Giving Up Before They’ve Even Begun
Have you already given up on your financial goals for 2024 because you made a spending mistake or set an unrealistic target? You’re not alone. Many of us judge success by the day, which plants the seed of failure right off the bat. Improving your financial status and changing poor habits takes time, and results come from learned skills.
Failure is nothing more than a lesson in disguise, but recognizing it at the time isn’t easy. Achieving financial success and building sound habits for 2024 will take discipline, a willingness to compromise and a belief in yourself. Don’t give up yet!
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.