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Make Wealth a Habit Andrew Snyder, Editorial Director, The Oxford Club
 We were asked a tough question over the past week. What does it mean to be rich? Tougher yet, what does it take to be truly wealthy?
The first question is far easier to answer. As we've said before, wealth is directly and positively correlated with liberty. The more wealth we have, the more we can take advantage of our innate right to do what we want, when we want. We argue that $2.3 million is the magic number.
But what does it take to be truly wealthy?
Answer however you'd like. There are as many right answers to that question as wrong answers.
Instead of zeroing in on a singular idea, we argue the key to building liberating wealth is becoming a person who consistently makes good decisions. It's not simply deciding to start a business... or investing a certain way. It's continually and habitually making the right decisions.
We can prove this idea by looking at what a series of bad decisions looks like... and what it can do to a person's chances to become wealthy.
Last week, we wrote about the student debt debacle here in the United States. Each year, hundreds of thousands of students are making decisions that will affect the rest of their lives. In many cases, the choice to pay for their school with debt is a bad one.
From an academic standpoint, they may excel... but it's once they get that coveted piece of paper in their hand that things start to go wrong.
The student is likely underemployed right out of school. He's forced to take on more debt. Instead of having money to invest, he barely covers his interest payments. He can't save for a down payment for a house, so he rents.
On and on it goes... until it's time to retire and he's got no hope of putting his feet up.
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One bad choice forced many others. It became habit.
We got a slew of comments (thank you) on last week's piece, but one in particular points out that this problem doesn't necessarily start with a bad decision by a student. No, reader Douglas K. reminds us that the habits of the folks around you can have a huge effect on your own choices.
You overlooked the one major reason for this dilemma; that universities like hospitals have overspent for "assets" and now must charge outrageous fees, tuition, etc., to their students just to pay for the new stuff that few will ever use and most never need.
Said another way, they have themselves broken the rules you just laid down for staying out of debt, or at least having the ability to live on less than one's income. A Cardinal rule for any business and household is to never spend money that must be borrowed on things that cannot create money, whether by appreciation or by the direct ability to earn money.
The reader gets it exactly right. When it comes to higher education, our society has made a habit out of making bad decisions. Sadly, it will cost countless folks their shot at liberating wealth.
Can we turn things around? Absolutely. But we need to break the cycle of habitual bad decision making.
We argue one set of good habits begets another. In other words, you can become a habitually good decision maker by focusing on what I believe are four key behavioral habits.
Follow them and you will be on the path to true financial liberty... even if you're dangling from that oh-so-expensive ivory tower.
Habit No. 1: Read every day - never stop learning. This is why we just spent the past year creating the Investment U bookstore. I'm convinced our student debt issue would evaporate in less than a decade if our schools simply forced students to read about debt and financial planning. But you don't have to read about money or business. Just read for at least 30 minutes each day and aim to learn at least a new idea in each session. Commit to it for a month and watch your decision-making process start to change.
Habit No. 2: Avoid bad decision makers. This is absolutely critical and, hopefully, needs no explanation. If your goal is to be financially liberated, associate with others with the same goal. If your goal is to get out of debt... don't befriend the manager of the local payday loan office.
Habit No. 3: Volunteer. Give your time for free. Wait. What? You're trying to build wealth and I'm telling you to do something for nothing. Absolutely. Even more, I'm telling you to do a whole lot for nothing. I volunteered more than 250 hours last year, and my goal is to donate even more hours this year. Why? One simple reason... doing something for nothing teaches you the value of your time. If you're giving away your time for free, you'll quickly learn what it's worth. You'll work that much harder and smarter when it counts. Remember, we're trying to develop a habit of smart decision making. By better understanding what you're truly working to gain with your wealth (the liberty to do what you want, when you want), you'll make better choices.
Habit No. 4: Know your numbers. Set goals and key benchmarks. If you don't, how can you separate good decisions from bad decisions? It's impossible. If it helps, we believe a net worth of $2.3 million is the benchmark of true financial liberty... and a mere $1,000 a month is the key to reaching that figure.
The rich don't know anything that the poor don't have access to. In today's ultra-connected world, that fact has never been truer. But we argue the rich - the folks who are truly liberated by their wealth - are habitually good decision makers.
If you want to get rich and stay that way... make it habit.
Good investing,
Andrew Snyder
Editorial Director, The Oxford Club
P.S. I am extremely pleased to announce that we launched the first piece of our Liberty Through Wealth series on Friday. It was an incredible project. I worked directly with Alexander Green to create a program that's designed to lead you to that critical $2.3 million goal... even if you're starting from nothing. All the details are here.
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