Have you ever driven through the nicest neighborhood in your town and wondered at the secrets to success of the rich individuals that live there? Some may say there are no real secrets, just hard work and luck.

Even so, there certainly are some things all business owners and entrepreneurs, big and small, can do to move forward.

We’ve caught up with many of the most successful entrepreneurs around to learn their secrets to success. Look for ways to put this advice into action, and you may find yourself moving on up!

• How do Millionaire Insure Their Money
• How do You Spot a Millionaire
• How Most Millionaire Get Rich
• What do Rich People Invest in
• 10 Secrets to Success From The Millionaires Next Door

How do Millionaire Insure Their Money

Rich people use “depositor” banks the same way the rest of us use banks; to keep a relatively small store of wealth for monthly expenses and a savings account for a rainy day.

The bulk of a wealthy person’s money is in investments. Money sitting in a bank account is not making you more money, and in fact as Kaushik correctly points out, would be losing value to inflation.

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Now, all investments have risk; that’s why interest exists. If, in some alternate universe, charging interest were illegal across the board, nobody would loan money, because there’s nothing to be gained and a lot to lose. You have to make it worth my while for me to want to loan you my money, because sure as shootin’ you’re going to use my loan to make yourself wealthier.

A wealthy person will choose a set of investments that represent an overall level of risk that he is comfortable with, much like you or I would do the same with our retirement funds. Early in life, we’re willing to take a lot of risk, because there’s a lot of money to be made and time to recover from any losses.

Closer to retirement, we’re much more risk-averse, because if the market takes a sudden downturn, we lose a significant portion of our nest egg with little hope of regaining it before we have to start cashing out.

The very wealthy have similar variances in risk, with the significant difference that they are typically already drawing a living from their investments. As such, they already have some risk aversion, but at the same time they need good returns, and so they must pay more attention to this balancing act between risk and return.

Managing their investments in effect becomes their new job, once they don’t have to work for anyone else anymore. The money does the “real work”, and they make the executive decisions about where best to put it.

The tools they use to make these decisions are the same ones we have; they watch market trends to identify stages of the economic cycle that predicate large movements of money to or from “safe havens” like gold and T-debt, they diversify their investments to shield the bulk of their wealth from a sudden localized loss, they hire investment managers to have a second pair of eyes and additional expertise in navigating the market (you or I can do much the same thing by buying shares in managed investment funds, or simply consulting a broker; the difference is that the wealthy get a more personal touch).

So what’s the difference between the very wealthy and the rest of us? Well first is simple scale. When a person with a net worth in the hundreds of millions makes a phone call or personal visit to the financial institutions handling their money, there’s a lot of money on the line in making sure that person is well looked-after.

If we get screwed over at the teller window and decide to close our acocunts, the teller can often give us our entire account balance in cash without batting an eyelid. Our multimillionaire is at the lower end of being singlehandedly able to alter his banks’ profit/loss statements by his decisions, and so his bank will fight to keep his business.

Second is the level of control. The very wealthy, the upper 1%, have more or less direct ownership and control over many of the major means of production in this country; the factories, mines, timber farms, software houses, power plants, recording studios, etc that generate things of value, and therefore new wealth.

While the average Joe can buy shares in these things through the open market, their investment is typically a drop in the bucket, and their voice in company decisions equally small. Our decision, therefore, is largely to invest or not to invest.

The upper 1%, on the other hand, have controlling interests in their investments, often majority holdings that allow them far more control over the businesses they invest in, who’s running them and what they do.

How do You Spot a Millionaire

Self-made millionaires didn’t get to three-comma club without doing things a little differently than the rest.

Various researchers who studied hundreds of self-made millionaires for several years have found that many tend to practice different habits or display heightened traits that help them build wealth. Many millionaires, for example, allocate their time differently they spend more time focusing on personal growth, thinking, planning for investments, working, and less time sleeping.

They also gravitate toward similar wealth-building strategies , like saving as much as they can and bringing in multiple income streams. And when it comes to investing, millionaires love low-cost index funds and real estate . Millionaires also tend to be frugal, conscientious, and resilient all traits that help amplify their wealth building actions .

While some of the behaviors above may also ring true for non-millionaires, millionaires often exhibit them at a stronger level and with consistency.

They Started Making Money at a Young Age

One of the most common traits that the wealthy have in common is that they began earning money at a young age. For example, a 12-year-old Mark Cuban sold trash bags door-to-door, Warren Buffett sold packets of gum to his neighbors when he was just six years old and Richard Branson bred and sold parakeets as pets at the age of 11.

If you had this entrepreneurial spirit as a child, then that’s a solid indicator that you’ve always been on the lookout for ways to make money.

You’re Attractive

According to research conducted by Daniel Hamermesh, an economics professor at the University of Texas in Austin, “Attractive people are likely to earn an average of 3 percent to 4 percent more than a person with below-average looks.”

That may not sound like a fortune, but it could add up to “$230,000 more over a lifetime for the typical good-looking person.” Hamermesh found that attractive people may be better able to charm interviewers and land more sales.

You Have an Action-Oriented Mindset

“Are you the kind of person who sees an opportunity and then takes action to take advantage of it? If so, congratulations, because it’s that kind of action-oriented mind-set that can propel you to financial freedom,” writes Todd Campbell, author of Your Guide to Better Stock Picks, in a piece for The Motley Fool.

“For example, it’s been proven time and time again that long-term investing can produce significantly more wealth than short term trading, yet many Americans fail to make the most of their best long-term investment vehicle: their workplace retirement plan,” Campbell continues. “Do you contribute to your workplace retirement plan? If so, do you contribute 10 percent of your income? More? Less?

Considering that someone who contributes 10 percent of their $40,000 in income to a 401(k) plan at a 6 percent return has $311,572 more after 35 years than one who contributes 3 percent, under-utilizing retirement plans is a surefire way to derail you on your way to millionaire status.”

You Possess a Sense of Urgency

Millionaires don’t wait for the perfect time to invest or launch their business. Many of them realize that there’s no better time than the present to start making money. Sitting back and waiting is one of the best ways to squash your dreams. Bottom line: Start working towards your goals right now.

You Were Popular in High School

“Moving from the 20th to 80th percentile of the high-school popularity distribution yields a 10 percent wage premium nearly 40 years later,” suggests research by Gabriela Conti (University of Chicago), Gerrit Mueller (Institute of Employment Research), Andrea Gaeotti (University of Essex) and Stephen Pudney (University of Essex).

In other words, if you had a significant number of friends in high school, then you may have a better chance of earning more money in your adult life. 

You Are Able to Live Below Your Means

Another common trait that millionaires have in common is that they’re usually able to live below their means. Instead of flaunting their wealth, many drive practical cars, live in modest homes and don’t spend their hard-earned cash on luxury items. 

For example, you can try and budget at least 50 percent of everything you make into your savings account, which you can put towards investments. These make you a lot more money in the long-term.)

You Have a Mentor

It’s no secret that the people you associate with can affect how successful you’ll be. Think about it: If you’re spending  the majority of your time with people who are negative or don’t have the drive to succeed, then do you think that they’re going to influence you to be more motivated and optimistic?

In other words: If you want to be wealthy, start hanging out with millionaires. This won’t just keep you motivated — you also may be able to find a someone who is willing to become your mentor and show you the ropes. If you don’t personally know any millionaires, don’t be afraid to reach out to them on social media or through an email to start building a rapport.

You have a Thick Skin

Worrying about what others think of you can hold you back, so it’s important to build a thicker skin. Mental toughness can lead to success, since the quality can assist in handling pressure and overcoming challenges.

You Keep up With Current Event

The most successful people in the world kick off their early mornings by catching up on current events. For example, Warren Buffett and Bill Gates reportedly read publications like The Wall Street Journal, The New York Times, USA Today and The Financial Times so that they can make more informed investment decisions based on what’s going on in the world.

You’re Constantly Improving Yourself

While having a college degree can make a difference in determining your net worth, that degree ultimately doesn’t determine if you’ll become a millionaire or not. Bill Gates is one of the most famous college dropouts of all time, and it hasn’t stopped him from continually improving himself by reading and learning new skills.

Here’s to becoming the next millionaire. 

How Most Millionaire Get Rich

Most of today’s millionaires weren’t born into their wealth, research shows.

A study by Fidelity Investments found that 88% of millionaires are self-made millionaires. Overall, the research revealed that current millionaires are, on average, 61 years old with $3.05 million in assets.

While nearly three-quarters of millionaires feel rich, those who do not said they would need an average of $5 million of investable assets to begin feeling wealthy.

“Today’s millionaires are multidimensional, and to really understand them, you need to look not only at their outlook but also at their path to wealth and their financial goals for the future,” said Sanjiv Mirchandani, president of National Financial, a Fidelity Investments company.

The study also revealed that self-made millionaires’ top sources of assets were investments/capital appreciation, compensation and employee stock options/profit sharing. Those who were born wealthy were more likely to cite inheritance, entrepreneurship and real estate investment appreciation as asset sources.

The study results showed that even though millionaires have different ways of making money, they often share these traits:

They set ambitious goals and act on them. We all have dreams, but millionaires actually pursue their ideas and passions. They do not let anything hold them back.

They have mentors. Millionaires know that they cannot possibly know how to do everything, so they find someone to guide them through the highs and lows of making money. They lean on others for perspective and insight.

They are not afraid of failure. Millionaires understand the benefits of learning lessons through failure. However, the risks they take are calculated and thought out. Once they commit to something, they give their all.

They understand the value of time. Millionaires quickly learn how to manage their time, and they know that there is no reason to trade time for money.

When it comes to investment strategies, self-made millionaires were more likely to add equity investments, while those who were born wealthy typically had more real estate investments, according to the study. 

Millionaires put their money in a variety of places, including their primary residence, mutual funds, stocks and retirement accounts. Millionaires focus on putting their money where it is going to grow. They are careful not to put a large amount of money into items that will depreciate. A car, for example, will most likely lose value over time.

The key for most millionaires is to save money before spending it. No matter how much their annual salary is, most millionaires put their money where it will grow, usually in stocks and bonds. 

According to a survey by Best Wallet Hacks, the top 10% of U.S. income earners are gaining wealth from business, farm and/or self-employment income. Half of their income comes from wages through business, and the other half comes from interest, dividends and capital gains. Those numbers have not changed much since 1989.

Millionaires suggest several paths to building your wealth and becoming a millionaire. One path to consider is having multiple streams of income. Those who want to earn more money should make sure that all of their income streams continue to grow.

If you want to be a millionaire, you should invest money every day. You should work to make more money so that you can invest more.

Saving is also a great way to become a millionaire. In other words, when you earn money, put it in a savings, retirement or some other investment account. When you get paid, have an automatic deduction go to some type of savings.

The Fidelity study showed that when considering their financial future, 30% of the millionaires surveyed said they were concerned with preserving their wealth, while 20% said they were focused on growing their fortune.

The study found that millionaires’ financial environment outlook continues to improve, with their optimism reaching the highest level since the survey’s inception in 2006.

“One trend has held true throughout the life of this study: The millionaire investor’s outlook has been consistently pragmatic about current market conditions and pervasively optimistic about a future recovery,” said Michael R. Durbin, president of Fidelity Institutional Wealth Services.  “In many ways, what millionaires have been thinking and doing can be a strong indicator for financial trends.”

Once such trend is millionaires’ current interest in the stock market. The millionaires surveyed ranked individual domestic stocks as their top investment added in the past year, followed by certificates of deposit, money market accounts or cash equivalents; equity exchange traded funds; individual domestic bonds; and domestic equity mutual funds.

The study was based on surveys of more than 1,000 millionaire investors. 

What do Rich People Invest in

The ultra-wealthy, known as ultra-high-net-worth individuals (UHNWIs), make up a group of people who have net worths of at least $30 million. The net worth of these individuals consists of shares in private and public companies, real estate, and personal investments, such as art, airplanes, and cars.

When people with lower net worths look at these UHNWIs, many of them believe that the key to becoming ultra wealthy lies in some secret investment strategy. However, this isn’t usually the case. Instead, UHNWIs understand the basics of having their money work for them and know how to take calculated risks.

In the words of Warren Buffett, the No. 1 investing rule is not to lose money. UHNWIs aren’t mystics, and they don’t harbor deep investing secrets. Instead, they know what simple investing blunders to avoid. Many of these mistakes are common knowledge, even among investors who are not particularly wealthy. Here is a list of the biggest investing errors UHNWIs avoid making.

1. Only Investing in the U.S. and the EU

While developed countries such as the United States and those within the European Union are thought to offer the most investment security, UHNWIs look beyond their borders to frontier and emerging markets.

Some of the top countries that the ultra-wealthy are investing in include Indonesia, Chile, and Singapore. Of course, individual investors should do their research on emerging markets, and decide whether they fit into their investment portfolios and their overall investment strategies.

2. Investing Only in Intangible Assets

When people think of investing and investing strategies, stocks, and bonds normally come to mind. Whether this is due to higher liquidity or a smaller price for entry, it doesn’t mean that these types of investments are always the best.

Instead, UHNWIs understand the value of physical assets, and they allocate their money accordingly. Ultra-wealthy individuals invest in such assets as private and commercial real estate, land, gold, and even artwork.

Real estate continues to be a popular asset class in their portfolios to balance out the volatility of stocks. While it’s important to invest in these physical assets, they often scare away smaller investors because of the lack of liquidity and the higher investment price point.

However, according to the ultra-wealthy, ownership in illiquid assets, especially ones that are uncorrelated with the market, is beneficial to any investment portfolio. These assets aren’t as susceptible to market swings, and they pay off over the long term.

For example, Yale’s endowment fund has implemented a strategy that includes uncorrelated physical assets, and it returned an average of 8.1% per year between June 2006 and June 2016.

3. Allocating 100% of Investments to the Public Markets

UHNWIs understand that real wealth is generated in the private markets rather than the public or common markets. The ultra wealthy may gain a lot of their initial wealth from private businesses, often through business ownership or as an angel investor in private equity.

Additionally, top endowments, such as those run at Yale and Stanford, use private equity investments to generate high returns and add to the funds’ diversification.

4. Keeping up With the Joneses

Many smaller investors are always looking at what their peers are doing, and they try to match or beat their investment strategies. However, not getting caught up in this type of competition is critical to building personal wealth.

The ultra-wealthy know this, and they establish personal investment goals and long-term investment strategies before making investment decisions. UHNWIs envision where they want to be in 10 years, 20 years, and beyond. And they adhere to an investment strategy that will get them there. Instead of trying to chase the competition or becoming scared of the inevitable economic downturn, they stay the course.

Further, the ultra-wealthy are very good at not comparing their wealth to other individuals. This is a trap that many non-wealthy people fall into. UHNWIs stave off the desire to purchase a Lexus just because their neighbors are buying one.

Instead, they invest the money they have to compound their investment returns. Then, when they’ve reached their desired level of wealth, they can cash out and buy the toys they want.

5. Failing to Rebalance a Personal Portfolio

Financial literacy is a big problem in America, but everyone should understand the practice of rebalancing their portfolios. Through consistent rebalancing, investors can ensure their portfolios remain adequately diversified and proportionally allocated.

However, even if some investors have specific allocation goals, they often do not keep up with rebalancing, allowing their portfolios to skew too far one way or the other.

For the ultra-wealthy, rebalancing is a necessity. They can undertake this rebalancing monthly, weekly, or even daily, but all UHNWIs rebalance their portfolios on a regular basis. For the people who don’t have the time to rebalance or the money to pay someone to do it, it’s possible to set rebalancing parameters with investment firms based on asset prices.

6. Omitting a Savings Strategy From a Financial Plan

Investing is essential to becoming ultra-wealthy, but many people forget about the importance of a savings strategy. UHNWIs, on the other hand, understand that a financial plan is a dual strategy: They invest wisely and save wisely.

As a result, the ultra-wealthy can focus on increasing their cash inflows as well as reducing their cash outflows, thus increasing overall wealth. While it might not be common to think of the ultra-wealthy as savers, UHNWIs know that living below their means will allow them to achieve their desired level of wealth in a shorter amount of time.

10 Secrets to Success From The Millionaires Next Door

1. Find a Mentor

Surrounding yourself with supportive people that you can learn from is invaluable, according to Nancy Brook. Brook is a Nurse Practitioner, educator and career mentor who founded Glass Slipper Consulting agency.

“Work with a mentor. Surround yourself with others who can support you on your journey to entrepreneurship.”

2. Hire the Right People

Brian Sharples co-founded HomeAway in 2005 and has since raised earned $400 million dollars, leading the world in the marketplace of online vacation rentals. However, success would not have been possible if Sharples didn’t take the time to hire the right people. Having good employees at the start is essential to finding success.

“It’s critical to spend the time early on to hire the right people. If you are disciplined in finding the best and brightest people who are also team players, then management is easy.”

3. Track Your Finances From the Beginning

Rounding out a 30-year career as the owner of Texas-based Providence Homes, builder and entrepreneur Michael Wood has plenty of hard-won lessons to share. His biggest piece of your advice? Keep tabs on your finances from the beginning—even if that means hiring a professional.

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“Hire an accountant from the very beginning! Seriously, that’s my biggest piece of financial advice. I can’t tell you how many times I’ve seen businesses fail because their owners couldn’t stay on top of their cash reserves.”

4. Ask for Help

Dennis “Chip” Wilson is a Canadian businessman and philanthropist who has founded several retail apparel companies, most notably the popular apparel company Lululemon. Wilson learned that to be successful, you don’t have to be a know-it-all. People want to help—if you’re willing to ask.

“It took me a long time to understand it, but [the advice was] to ask for help and that I don’t know it all. People love to help. I don’t have to be insecure and know it all.”

5. Keep Your Competitive Edge

When Ron Shaich founded the casual eatery Panera in 1981 back in Kirkwood, MO, he knew that he had to remain competitive to succeed. He believed that if you can’t convince customers to come to your establishment and not your competitors, you should get out of the game. Figure out what gets people excited, and then you’ve got something.

“Losing competitive advantage is the greatest risk in business.”

6. But Focus on Yourself

When Hayley Barna met Katia Beauchamp at Harvard Business School, it was the start of a partnership that would set the beauty industry on its head. Their joint venture, Birchbox, launched in 2010 and grew into a Fortune 500 company.

While Birchbox was the first of its kind, others have come along since. According to Barna, spending all your energy focusing on the competition is a waste of time. Instead, focus on your company and what makes you unique.

“While comparisons are tempting—especially for competitive, ambitious people—it’s always important to focus on your own special talents. That’s how you can make a real impact. And it’s the coordination of everyone’s unique skills that can make magic happen.”

7. There’s No Room for Ego

Wally Amos, founder of the addictive bite-sized Famous Amos cookies, didn’t find success until later in life. He worked in a mailroom until he was 40 and he finally opened his own bakery. Within a few years he was bringing in over $12 million annually, but he realized that success doesn’t come without some humility. Otherwise, you’re bound for failure.

“Realize that the only thing you can do by yourself is fail. If you’re going to succeed, you’ll need help and should be prepared to share the credit. Keep your ego in your pocket.”

8. Keep An Eye On Your Spending

Darrow Kirkpatrick makes his living offering financial advice to baby boomers headed for retirement, so he knows a thing or two about financial independence. Though he’s been fortunate in his business dealings, Kirkpatrick asserts that the secret to millionaire status has more to do with spending than earnings.

For years, he and his family owned only one modest home in Tennessee, and they’ve always paid cash for their vehicles. Practicing what he preaches, Kirkpatrick’s best advice to aspiring retirees comes down to conservative spending:

“If your income is greater than the $75,000 or so that researchers say is necessary to optimize happiness, then you probably don’t need to spend all of it. Call that discipline, call it a safety cushion, call it conservation. But it’s good for you and good for others.”

9. Do What You Love

When you’ve written a best-selling book-turned-blockbuster starring Will Smith, it’s easy to dole out advice about doing what you love. But it wasn’t always easy for entrepreneur and philanthropist Chris Gardner, who spent time homeless on the streets of San Francisco with his 2-year-old son.

Gardner eventually found success as a stockbroker at Dean Witter Reynolds and went on to start his own firm. Once he found what was going to make him happen, he did whatever he had to to make it work.

“Find something you love to do so much you can’t wait for the sun to rise to do it all over again.”

10. It’s Up to You

Author and self-made millionaire Steve Siebold hasn’t just experienced How Rich People Think, he actually wrote the book on this subject! Having studied the philosophies and practices of affluent people, he’s convinced that success requires taking responsibility into your own hands.

“You’re not going to be discovered, saved, or made rich by an outside force,” Siebold says. “If you want a lot of money, build your own ship. No one is coming to the rescue.”