The Mark of Success: 50 Common Traits of Prosperous People (part 2)

What can we learn from the most successful people in the world? In fact, just about every individual that’s become a leader or icon in their chosen vocation have the same traits in common.

Some of the most successful people in recent history include Bill Gates, Warren Buffet, Jeff Bezos, Richard Branson, Mark Zuckerberg, Oprah, and Elon Musk, establishing important legacies that benefit society. But apart from being ultra-rich and powerful, they have far more in common than you might think.

In part one of this series, we covered 25 traits of the world’s most prosperous people, which was warmly received with your questions, comments, and observations. So, we’ve worked hard to isolate the next 25 common traits of the rich, successful, and powerful here:

26.      Incredible communication skills.

High achievers are almost always great communicators, interacting with others efficiently using simple, clear, and concise messages, whether in person or in writing.  This also includes the ability to actively listen – a vastly undervalued skill.

27.      Masters at conflict resolution.

Industry leaders and icons don’t shy from conflict. Known as straight-shooters, they understand that it’s a healthy and necessary function of growth. That doesn’t mean they’re necessarily aggressive or combative, but let others speak their minds, vent, and advocate for their own opinion, just like they do. By facing conflict head-on, they’re able to work through it, solving problems instead of letting them fester.

28.      They keep their egos in check.

Successful people want to learn from others so that they can constantly grow and improve.  Instead of taking things personally and quickly becoming defensive, maintain perspective and seize the opportunity.

29.      Adopting others’ viewpoints.

The mark of a great mind is that it can consider two opposing viewpoints at the same time.  Leaders and succeed-ers can do the same with people, having empathy for others by adopting their viewpoints. They are always looking to add information to their existing opinion, which remains open and flexible.

30.      They outsource. 

We may think that top producers are control freaks and do everything themselves but, in fact, they actually maximize time, energy, skills, and income by outsourcing whenever possible. They do the math and figure out when it makes sense for them to handle certain tasks, or when to assign it to someone else. 

31.      Teamwork.

Achievers work with the best financial planners, tax professionals, attorneys, and other skilled professional they can find.  They build epic teams, and outsource as much of their systems as possible, understanding their role and focusing on their own strengths.

32.      Focus on interpersonal relationships.

Genuine, personal relationships are invaluable. Prosperous people don’t rely on technology to establish and fosters relationships for them.  They call and talk, set up meetings and take the time to interact – face-to-face whenever possible. They also give you their undivided attention and interest when speaking with you.

33.      Eating right.

Hi-power thinkers, achievers, and do-ers take great care of themselves, and that starts with eating right. The brain won't run optimally without the right fuel, and a healthy routine is essential for the heights they are climbing every day.

34.      They heed their creative/energy time.

It’s fascinating when you look at the creative cycles of geniuses; not only do they understand their optimal thinking and working times, they block that time and protect it fiercely.

35.      Stay active.

Just like with food, exercise is a big piece of staying on top of success. No matter how busy they get, successful people have a very regular exercise routine as well as making their health a priority.

36.      Relaxation.

Successful people are able to breathe, stay calm, and think clearly because they regularly decompress to shed the extreme stress of their day.  Their relaxation ritual can be simple meditation, yoga, getting a massage or going for a walk. 

37.      Stamina.

This trait is usually overlooked, but successful people work long hours and expend incredible amounts of energy day after day. They understand that special achievements take special perseverance over the long haul. 

38.      Quality time.

No matter how busy they are, successful people schedule time off to spend time with their families, see friends, and enjoy their lives. 

39.      Fun!

Likewise, winners embrace the journey, not the destination and have fun as they work, play, or whatever they’re doing. That positive outlook rounds out their lives.

40.      Financial discipline.

The billionaire not-quite-next-door is extremely careful and structured with his or her money.  Even before they achieve wealth, they track all of the income and expenses, whether it’s by inputting them into a spreadsheet, saving receipts, or using tracking software. 

41.      Lack of conspicuous consumption.

Research shows that when people have earned large amounts of money, they still rarely show off their wealth.  In fact, owning things is not really the point of their existence. Instead, they save and reinvest for the long term, using their wealth to pay for experiences, rather than things.

42.      Quality of life.

The wealthy do go on adventures, occasionally treat themselves to luxury items, and will go all-out for their families, but they do these things within a larger framework of smart planning and understanding value.

43.      Big picture thinking.

People who live meaningful and comfortable lives don’t buy assets with the exception of quick riches or short-term gains. Instead, they make quality investments and hold them, with the eye toward creating something that will pay them back many times over the decades.

44.      Invest young.

Even in their 20’s, these folks understand the power of compounding.  By putting money into 401k’s, Roth IRA’s and the like early, they benefit from high returns as they get closer to retirement.

45.      Automated savings.

Whatever they earn, successful people break off a tiny piece and stash it, deducting it directly from each paycheck. This is what they mean by “pay yourself first,” as it gives them a solid foundation to invest and grow before they ever touch the rest of the funds for basics or play.

46.      Plan for rainy days.

Successful people may take risks, but they definitely are pragmatic as well, planning and preparing for the unforeseen. They keep a good amount of savings, make sure they are well insured and protected, and generally minimize liability in every aspect of their lives.

47.      They pay off bad debt.

Interest from credit cards, car loans, and other credit is a silent killer for many family budgets. In fact, successful people universally pay off credit cards, car loans, small installment loans, and don’t carry personal debt on a month-to-month basis. While they often pay off their mortgages as well, they distinguish between “good debt” that helps with investment, taxes, and credit, and “bad” debt that just depletes their bank account.

48.      They can be great because they can serve.

These people reach a certain height of success where happiness is measured by how much they can positively impact the world, not just themselves. To do so, they serve on Boards, advise, mentor, attend community meetings, vote, and even support politicians that serve in their civic interests.

49.      A core of altruism.

From Bill Gates to Warren Buffet to the Oprah, just about every notable accomplished person donates significant sums to those in need. But they create the convenient excuse that they’ll become rich first, and then start giving; they make it a part of their life from early on.

50.      They love to work, and never want to quit.  

People who lead truly exceptional lives rarely look forward to a time they can retire and stop working Instead, they are extremely passionate about what they do for a living. Their work brings them joy, so they want to keep being productive as long as they can!

15 Habits of financially successful people.

No matter who you are or where you’re from, you probably have the same financial goals as everyone else – to be comfortable and build wealth.  Lucky for us, we can learn from the habits and traits that successful people all share.  They have a certain relationship with money that allows them to get ahead, no matter what life circumstances, up’s and down’s in business, or fluctuations in the market they may face. Here are 15 habits that people who are well off and live comfortably all have.  They...

1. Diversify.

People who do well financially never put all of their eggs in one basket – they diversify their investments and income streams, whether it’s the stock market, real estate, or investing in their own company.  By diversifying, they minimize their risk and

2. Track and analyze their expenditures.

Financially successful people pay close attention to their financial picture.  They track all of the income and expenses, whether it’s by inputting them into a spreadsheet, saving receipts, or using tracking software.  This allows them to analyze their expenditures every month and reduce unnecessary or impulse purchases.

3. Live below your means.

Research consistently shows that the millionaire next door rarely is interested in showing off their wealth.  They believe in buying quality but then holding on to it for the long term, whether it’s their car or home.  They’re more interested in saving and reinvesting then throwing around “flash” money to impress other people and keep up with the Joneses.

 

4. Make moves for the long term.

People who live comfortably and amass wealth rarely are tempted by get-rich-quick scheme nor chase any shortcuts to wealth.  They don’t buy and sell assets frequently or expect short-term gains – they buy quality investments and hold them, with the eye toward cashing in way in the future or at least based on market fluctuations. 

5. Automatically save.

Not only do wealthy people save, but they save automatically.  Most often, putting a portion of their paycheck into savings is the very first thing they do, followed by funding investments and paying bills.  Savings isn’t an afterthought for the wealthy - it’s automatic.

6. Plan for every eventuality.

Financially comfortable people understand that life will throw them some twists and turns, and sometime tragedy, so they make sure they plan for all of it.  They get life insurance to cover their families, great health insurance locked in when they’re young, disability insurance, and leave a clear will.

7. Live within a budget.

Being smart with your money isn’t the same thing as being cheap or not having fun.  In fact, wealthy people often spend on vacations, luxury items, and fun for their families, but they plan it.  They budget carefully and exhibit the discipline to follow it, not giving in to impulse purchases.

8. Invest young.

One of the consistent traits of people who are financially comfortable later in life is that they started investing young.  Even in their 20’s or sometimes their teens, they understand the time value of money.  By putting money into 401k’s, Roth IRA’s and the like when they’re young, they benefit from compounding returns and a windfall as they get closer to retirement.  

9. Always have a solid emergency fund.

Financial planners always shake their heads at the lack of savings among Americans these days.  Despite all of our income, wealth, and big purchases like houses, boats, cars, etc., people still do not follow the golden rule of finances – ALWAYS have an emergency fund of at least 6 months expenditures (and a year is much better!)  There are so many people who look like they’re doing well but are one paycheck or a medical emergency or divorce away from losing it all because they don’t have an emergency fund.

10. Pay off bad debt.

One of the most important characteristics of financially stable and savvy people is that they abhor bad debt, which includes credit cards, installment loans, and any other high-interest type of debt (different than mortgages or business loans that serve a purpose.)  They understand that they’re basically renting money at an exorbitant rate, and all of the savings and investments are for naught if they’re giving the money right back through debt payments.  The first thing on any financial To Do list to analyze your debt load and come up with a viable plan to make extra payments, and “stack” or “snowball” principle, allowing you to pay them off aggressively.

11. Pay bills immediately.

People who are smart with their money never wait until the end of the month or the last days before the due date to pay their bills.  Every month, they pay all of their bills immediately, right after they automatically save and invest.  This eliminates interest charges and solidifies the financial discipline to budget carefully with what they have left.

12. Invest in education.

Being good with money doesn’t mean you have to be a financial planner or get a university degree in economics, but everyone should read books, magazines, and do their fair share of research.  No one is going to care about your money more than you will, and trusting slick-talking sales people or following hot financial trends and get-rich-quick infomercials are a surefire way to lose.  Instead, invest time and energy into knowing who to hire, what questions to ask, and the basic principles about the risks and rewards of investments. 

13. Set goals and plan.

Just like any achievements in life, setting tangible goals with concrete timetables and planning the action steps to achieve them is crucial to success.  People who are wealthy never get that way by accident – there’s always a history of goal setting and careful planning, along with consistent reevaluation of their plan based on changing circumstances.

14. Work with the best team.

Truly financially stable individuals want to work with the best financial planners, CPA’s and tax professionals, and attorneys they can find.  They understand that this may cost a little more, but it’s nearly impossible to get ahead with a second-rate team behind you.  They definitely resist the temptation to try and do everything themselves, which is about ego – not financial smarts. 

15. Focus on the right things.

It’s amazing to see a direct correlation with how someone lives their life and what they sow from it.  Financially comfortable people almost always understand that true wealth comes from things you can’t buy – their health, spending time with family, their faith, and giving back to charity and community.  Those are the things they cherish above all else, and somehow it helps the rest fall into place.

The lessons Warren Buffet wants to teach you about real estate.

The world’s third richest man has something he wants to tell you.  He’s practically imploring you to listen as he dispenses a parcel of the wisdom that’s made him the third-richest man in the world.  We hardly need to check his resume to convince us to listen, but the billionaire Chairman of Berkshire Hathaway and Svengali of investing has this message for you:

Buy real estate.

Of course it goes deeper than that, as there’s a right way to buy real estate and a lot of wrong ways.  Thankfully Buffet, always generous with sharing his philosophies, has left enough breadcrumbs for us to decipher his formula.

The biggest breadcrumb recently came in his annual letter to Berkshire Hathaway shareholders; a highly anticipated forum to pick his brain about the year’s fortunes, the market, and always-general advice about money the average person can chew on.  In this year’s letter, Buffet makes no mystery about his thoughts on real estate, "Home ownership makes sense for most Americans, particularly at today's lower prices and bargain interest rates."

So let’s pretend we had Warren Buffet in front of us and could ask him the basic questions about real estate and finance most Americans have.  I’ve assembled his answers from his annual letters but also interviews and articles.

Why buy now?
He’s oft quoted as to why now is a great time to buy, "It's a way, in effect, to short the dollar because you can take a 30-year mortgage and if it turns out your interest rate's too high, next week you refinance lower. And if it turns out it's too low, the other guy's stuck with it for 30 years. So it's a very attractive asset class now."

Is it better to buy real estate now or stocks?
"If I knew where I was going to want to live the next five or 10 years I would buy a home and I'd finance it with a 30-year mortgage... It's a terrific deal."

How about buying rental properties?
"If I was an investor that was a handy type and I could buy a couple of them at distressed prices and find renters, I think it's a leveraged way of owning a very cheap asset now and I think that's probably as an attractive an investment as you can make now." He’s also said, "If I had a way of buying a couple hundred thousand single-family homes I would load up on them."

What should we be cautious of when buying rental properties?
In this year’s shareholder letter, Buffet tells the story when he was a young man and bought a recently foreclosed 400-acre farm in north Nebraska.  He knew absolutely nothing about farming but had a family member who did ready to step in, and he did know about money.  What he understood was that there was value to the property as an asset because of the goods it could produce, and that those goods would increase in value as time went on.  He factored a humble 10% profit but the real boon was long term.  Now, the property is worth 5 times what he paid and profits have been much higher than expected.

So “focus on the future productivity of the asset,” Buffet advises.  In terms of real estate, that equates to the inherent value of the property in the market, not how much the property price will change in the short term.  “I thought only of what the properties would produce and cared not at all about their daily valuations,” Buffett said. “Games are won by players who focus on the playing field — not by those whose eyes are glued to the scoreboard."

With all the changes in the economy and the recession, is real estate still a sound investment?
Buffet still lauds home ownership as delivering on its basic benefit: that homes increase in value over time, and insists that still applies, in fact, more than ever.  "It's a totally sound premise that houses will become worth more over time because the dollar becomes worth less," he said at a Congressional hearing on the financial crisis.  But that doesn’t mean there won’t be fluctuations, and the recent real estate bubble was caused by overconfidence that prices would never go down, the ease of getting multiple homes, loans without proper income documentation, and no-money down loans, leading to greed in every sector that eventually serves as the pin that popped the bubble.

Is it better to wait cautiously for the perfect time to buy real estate?
If there is one thing Buffet teaches us it’s that there are micro markets within any market, and always deals to be had so there is no wrong time to buy, but there’s definitely a right time to buy.  Starting back in 2008 he admitted that buying when prices are low always feels risky and unpredictable because no one can tell what prices will do in the short term, but that’s exactly the best time to get in.  Once consumers wait until there’s some stability and predictably to the price curve, the bottom – and the best deals - are already over.  Luckily, we’re still in an ideal buying environment as prices are still low and interest rates are great, but that won’t last for long.

"If you wait for the robins, spring will be over," says Buffet.

Should people stretch to buy their dream home?
That’s the perfect formula for failure, according to Buffet.  Too often during the financial crisis homeowners spent more than they could afford, with volatile adjustable payments and stretched to every dollar of their income just hoping for short-term gain.  That’s the recipe to lose money.
"A house can be a nightmare if the buyer's eyes are bigger than his wallet and if a lender -- often protected by a government guarantee -- facilitates his fantasy. Our country's social goal should not be to put families into the house of their dreams, but rather to put them into a house they can afford."

So what three factors are most important when buying real estate?
Warren Buffet believes the three most important elements to buying a home as a great investment are: a fixed mortgage, affordable payments, and holding on to it for the long-term.  By keeping payments affordable (and stable) and looking to keep it for the long haul, you basically allow the asset to bear fruit for you.  "If home buyers throughout the country had behaved like our buyers,” Buffet says, “America would not have had the crisis that it did."

Does he practice what he preach?  
Warren Buffet, The Oracle of Omaha, is worth around $50 billion dollars according to recent Forbes estimates, but still lives in the 5-bedroom home in Nebraska he bought 52 years ago for $31,500.  That sounds to me like a he takes his own advice!