You've probably seen articles detailing what Warren Buffett does every day, or what Elon Musk eats before noon, or that "one trait" rich people have that poor people don't. It's interesting, but when it comes to building wealth and success, these habits don't teach you anything about what it really takes to get there. In fact, they're kind of counterproductive. Illustration by Fruzsina Kuhári.
The Correlation-Causation Problem
Here are a few things I've learned rich people do:
- Wake up extra early
- Keep a to-do list
- Make birthday calls
- Network frequently
- Read a lot of books or articles
These are all great habits. Suggesting they cause a person to acquire wealth, though, is a huge stretch. Even worse, most of these habits are backwards. When you're already rich, you have flexibility so you can do things like get up early for some "me time".
It's one thing to read up on the habits of the rich and successful because they're interesting. Hell, we've written about the daily habits of famous creative people ourselves. It's fun! And those habits can be inspiring. However, suggesting that those habits will help you get rich is backwards, and, ultimately, not very helpful. Not only is there no established causal relationship between a habit and more money, there's not even necessarily any correlation either. Plenty of poor people make birthday calls, too.
Personal Finance Is Personal
Ultimately, these profiles suggest that if you adopt the same habits as a wealthy business mogul or silicon valley VC, you'll get rich, too. Habits are important to manage your money, sure. So are rules. The thing is, though, personal finance isn't about copying someone else's habits or even following those rules. It's about figuring out what works for you -- and then taking action.
When we suggest that there's a simple blueprint for acquiring success and wealth, we take away from the very thing that makes people actually successful: resourcefulness. I like how Chris Guillebeau put it in an episode of the Smart Passive Income podcast:
There are always these profiles of famous business leaders. And it's like, "Hey, here's what Warren Buffett does every day. If you do the same thing, you'll be like Warren Buffett."...and that's totally unrealistic. Because most people don't have the resources that those people have. We don't have tens of thousands of people reporting to us that we can boss around. We don't have the billions of dollars that Warren Buffett has. We can't just ask, "What works for Warren Buffett? What works for Mark Zuckerberg?"... We have to say, "What works for us?"
This isn't to say you shouldn't adopt good habits. It's not to say you shouldn't have a to-do list or call people on their birthday or wake up early, just like rich people do. You may even be happier or more productive. Following those random habits won't make you rich and successful, though. If it were that easy, we'd all be rich. Focusing on how to take control of your own unique situation is what ultimately builds wealth.
Most "Habit Profiles" Offer Random, Oversimplified Advice
Perhaps the main problem with most habit profiles is that the habits are absolutely random.
For example, yes, Warren Buffett's investing habits are worth learning about, since he's considered the world's greatest investor. His financial mindset habits are useful, too. The fact that he reads 500 pages per week? That's great for him, but it doesn't have anything to do with anything. We all know reading is a good thing, but reading is not Buffett's secret to success. According to him, he built his wealth with passive investing. And that's actually useful for someone looking to get rich like Buffett. The takeaway that you can adopt one random habit to be financially successful is a massive oversimplification of wealth advice.
Also, as Guillebeau points out, if you're going to look at habits, it's probably better to look at the habits of regular, everyday people like you who are making headway and improving their finances. And not just general headway, but progress in a way that matters to you, whether it's investing, finding more time in your day or learning how to manage money. That's precisely why personal finance blogs are so popular (and often a great source of info). They're written by real people with realistic lifestyles who document what actually works.
In short, consider the context, not just the behaviour. Take into account the complete relationship between the source, the habit and the takeaway.
None of this is to suggest that these habits are useless. I read these habit profiles and enjoy them.
They're just not useful when it comes to learning how to get rich and accomplish things in your career. Those habits may have helped them specifically, but there's a lot of hard work, effort and action that goes into building wealth. It's not as easy as waking up early, watching less TV and keeping a journal.