- A researcher who has studied more than 600 millionaires found they put more energy toward personal-growth activities, like reading for pleasure and exercising, than the average American.
- But millionaires make a few sacrifices to make the most of their time, like sleeping less and working more.
- Ultimately, a person’s ability to build wealth is related to how they spend their time and energy.
Millionaires do things a little differently from the average person, including how they occupy their minds and time.
According to research conducted by Sarah Stanley Fallaw, the director of research for the Affluent Market Institute and author of the book “The Next Millionaire Next Door: Enduring Strategies for Building Wealth,” in which she surveyed more than 600 millionaires in America, how a person dedicates their activities and thoughts can influence how much wealth they build.
“Focusing on goals is related to building wealth, regardless of age and income,” she wrote. “The decisions we make, particularly related to the allocation of our time, energy, and money, impact our ability to become financially independent.”
Millionaires, for example, seem to put more energy toward personal growth.
They spend roughly 5 1 /2 hours a week reading for pleasure and nearly six hours a week exercising, while the average American spends two hours and 2 1/2 hours on those activities, according to Stanley Fallaw’s research.
Perhaps the average American is allocating more of their time to perusing social media or playing video games, which millionaires tend to spend less time doing – they spend an average of 2 1/2 hours a week on social media, compared with the average American’s 14 hours.
“Successful individuals are keenly aware of how they spend their resources, including their emotional and cognitive resources,” Stanley Fallaw wrote.
But millionaires make a few sacrifices to make the most of their time – they sleep nearly eight hours less a week and work six hours more a week than the average American.
The wealthiest people are better at managing distractions
Stanley Fallaw further classifies American earners using a formula to find expected net worth: age, multiplied by pre-tax annual household income from all sources, divided by 10.
Under-accumulators of wealth, or UAWs, are those whose real net worth is less than one-half of their expected net worth based on age and earnings. Average accumulators of wealth, or AAWs, are on par with their expected net worth. And prodigious accumulators of wealth, or PAWs, have a net worth about twice their expected level.
According to Stanley Fallaw’s research, UAWs work more hours a month (185) than PAWs (nearly 141).
“Our research has shown that under-accumulators must keep the revenue engine turned on to keep up with their consumption lifestyle, leaving little time to plan, read, and contemplate their investments,” she wrote.
They also differ in social-media use. UAWs spend about 14 hours a month on social media, while PAWs spend about nine hours a month on social media.
Ultimately, the more distractions a person adds, the fewer goals they’re likely to accomplish, according to Stanley Fallaw.
“Distractions are a significant reason why many struggle to become financially independent or achieve other goals,” she added. “We know that the more we’re able to focus without distractions, the better we’re able to build wealth long term.”
But that’s not to say all distractions are bad. Another thing that can help lead to wealth building is picking up a hobby, as some of the world’s most successful people do. For instance, Bill Gates plays bridge and Jack Dorsey hikes, and both are billionaires.