What are the top-secret tips and tricks millionaires know that you might not?

No matter what some seem to think these days, most millionaires didn’t start a high-tech company in their garage. They haven’t written a mind-numbing song that has been viewed 6 bazillion times on YouTube. And they can’t throw a ball in a tiny basket from 50 feet away, thanks to their $5,000 tennis shoes.

As described in a recent article* I read, most millionaires became that way through hard work (boring), compulsive saving (boring) and meticulous investing (boring) over several decades (boring).

These time-tested habits are summarized below.

  1. They live within their means

It’s not exactly rocket science. To retire, you need to invest. To invest, you need money. To have more money, you need to make more and save more.

Without opening a can of rabid worms, production-based pay typically allows you to earn more than on salary.

Living within your means is a simple rule that means you need to spend less than you make, and save part of your income. It seems that most smart financial gurus now recommend saving 15 or 20% of your income, rather than the good old 10%.

Of course, if you are starting out in life, it’s reasonable to save 5% and slowly but surely inch your way higher as your income increases.

  1. They own their homes instead of renting

This is very common advice. It’s based on the premise that “real estate always goes up” and “paying rent is stupid.”

I have to disagree with this blanket advice.

Buying a house is not always the best strategy.

It depends on a number of factors.

In some areas of the US (for example, colleagues who live on the coasts), you may have to spend 2/3 of your income to afford an average house.

As a reminder, most banks won’t lend you more than 1/3 of your income to pay for a mortgage.

Those who do that might struggle quite a bit to go on a vacation, save 20% of their income or pay their student debt.

The math just doesn’t work.

Besides this extreme situation, and in a normal economic climate, and in the right location, and at the right price, and with the right mortgage, it might make sense to own your house.

3. They take calculated risks

Storing money under your mattress (who does that anyway?), in CDs or a money market account is a sure way to lose money in a high-inflation environment.

So the only way to grow your nest egg is to invest it – wisely.

All investments carry some degree of risk, from limited to extreme.

The whole art of investing requires finding the right vehicle that fits your risk tolerance and will help you reach your goals.

4. They asset allocate

Asset allocation is a critical requirement of successful investing.

It means that you need to allocate, or divide, your portfolio among a variety of assets: stocks, bonds, collectible baseball cards, cash, fine wines, oil and gas, real estate, gold and precious metals, rare stamps, Bitcoin, antique cars etc.**

“Stocks” is of course a very general term. Within stocks, you can allocate money to small or large cap, growth or value, domestic, international etc.**

Within “real estate”, you can own rental properties, office buildings or raw land.**

  1. They are disciplined

Buying an asset is typically the easy part. The harder part is to know how long to hold and when to sell, or when to rebalance your portfolio. This is an art as much as a science.

Letting your emotions in the way is a sure way to leave money on the table… or lose your shirt.

  1. They lower investment costs

Fees, often well hidden, erode your capital, so your mission as an investor is to avoid them like COVID.

Some are unavoidable. For example, if you use the 401(k) offered at your practice, you have no control over the fees charged by the plan and the funds offered.

Other fees are avoidable. Using low-cost ETFs (Exchange Traded Funds) rather than high-cost mutual funds is one option to decrease your costs.

Yet other fees have recently been eliminated in many taxable accounts, such as commissions to buy and sell individual stocks.

7. They tax-manage their portfolios

Knowing the tax consequences of your different investment vehicles is critical to your financial health.

You should not invest the same way in a taxable account, a tax-deferred IRA, a Roth IRA, a self-directed IRA and a 401(k).

We cannot offer personal tax or investment advice, but generally speaking:

  • High-yield bonds, REITs (Real Estate Investment Trusts) and high-dividend stocks are considered tax-inefficient and are better held in retirement accounts.
  • By contrast, tax-free municipal bonds can be held in a taxable account.


Understanding the power of these time-proven habits is just the beginning.

Following them is sometimes a bit tougher.

Embracing them over the long term is the greater challenge.

Of course, no human is perfect. We all will make mistakes. We all will slip at times. We all will experience hardships.

The goal is not to be perfect 100% of the time.

Even if you’re right 80 or 90% of the time, you still can be extremely successful.

These 7 habits are an excellent start.

We could have listed others that are also critically important:

  • Don’t be a commodity. Acquire sought-after skills that differentiate you from your colleagues: be stellar in surgery, or proficient at ultrasound, or excellent at extracting teeth.
  • Don’t play the lottery.
  • Don’t count on a mythical knight on a white horse or the debt-slashing fairy to rescue you.
  • Use every possible (legal) deduction to lower your taxes.
  • Don’t gamble.

You get the idea. The rules are not all that mysterious: to retire comfortably, you need to make more, save more, and lose less.

Follow the rules, and you will predictably join the ranks of Silicon Valley techies, TikTok ninjas, and sport goddesses.

I will leave you with a brilliant quote from best-selling author Jim Rohn: “Become a millionaire not for the million dollars, but for what it will make of you to achieve it.” 

Phil Zeltzman, DVM, DACVS, CVJ, Fear Free Certified

* This blog is loosely inspired by Alexander Green, Chief Investment Strategist at the Oxford Club. Some of his tips are likely inspired by real-life observations and the best-seller “The Millionaire Next Door.”

** These are random examples, not investment recommendations.