5 Investing Habits That Changed My Life

Warren Buffett is one of the most famous investors of all time and one of the richest people on the planet.

 Ronald Read was a janitor and gas station attendant from Vermont. 

These two people seemingly couldn’t have less in common…but what if I told you that the stories of these two, very different people, hold the secret of what it takes to become a millionaire and accumulate massive wealth…and it’s actually something that can be implemented by you.  Yes…You! 

Allow me to explain…

Warren Buffett has a net worth of over $120 Billion and is widely regarded as one of the greatest investors of all time. 

But the secret to his massive wealth has nothing to do with how skillful of an investor he is 

Enter, Ronald Read, born just 9 years before Warren Buffet, but into an entirely different world. 

Where Warren Buffet, grew up as the son of a US Congressman Ronald Read grew up poor, as the son of a Farmer.

Warren Buffet went to Wharton and later Columbia Business school and was mentored by Benjamin Graham. An investor so legendary he ACTUALLY wrote the book on investing. 

Ronald Read walked 4 miles every day to school in order to become the first high school graduate in his family. 

Throughout his teenage years, Warren Buffett was involved in owning and operating several small businesses. By the age of 35 Warren Buffett had full control of Berkshire Hathaway the company he continues to run today, over 60 years later. 

Ronald Reid served in World War 2 until he was honorably discharged in 1945. After returning home he worked as a gas station attendant in Vermont for the next 25 years before retiring for a year and then resuming work as a part-time janitor for the 17 years after that. 

Obviously these two had very different upbringings and very different career paths, but there is something that ties them together….they were both very, very wealthy. 

That’s right, Ronald Read, Janitor and Gas Station attendant…was a multi-millionaire. 

When he died in 2014 his neighbors, family and friends were all shocked that Ronald had amassed a fortune of over $8 million dollars. 

Good for him, you say. But what’s that got to do with Warren Buffett…or with me?

Well It’s because Ronald Read accumulated his wealth the same way that Warren Buffett did, and the same way YOU can accumulate wealth for you and your family. 

The truth about Warren Buffett is that 99.7% of Warren Buffett’s wealth has been accumulated after he reached the age of 50.  Over 90% of his wealth has been accumulated after he turned 65, the age most Americans retire and start collecting social security. 

Warren Buffett’s insane wealth has very little to do with his investing skill.

Ronald Read wasn’t an overly skilled investor either…and if we’re honest with ourselves…Neither are you or I. 

The truth is, the most successful investors aren’t the ones you hear of for making flashy trades or timing the market perfectly. For most of us, wealth is built on the foundation of solid habits that stand the test of time. It’s about having simple, repeatable habits that allow you to continue growing your wealth no matter what else is happening in the world.

Here are five investing habits that will help you build wealth and master your money. I can honestly say they helped me change my life.

Five Investing Habits That Will Change Your Life

1. Time Is Your Greatest Ally

Ronald Read probably never made much more than minimum wage, yet he accumulated more than $8million dollars because he invested small amounts of money and left it invested for a long time.

Warren Buffett made his millions early, but the reason he has hundreds of billions is because he started investing at age 10 and is STILL at it in his mid 90s. 

The secret to unlocking wealth and becoming a millionaire isn’t investing skill. It’s time. 

Compound Interest creates a snowball effect where your investments begin to grow exponentially over time. The sooner you get started and the longer you stay invested the greater of an effect this will have on your wealth.

For example: Something as simple as maxing out a Roth IRA for $7000 per year from age 18 to age 60 would help you amass a fortune of nearly $2 million!

If you haven’t started yet, there’s no better time than now.

2. Don’t Time The Market

One of the biggest mistakes investors make is thinking they can predict the perfect time to buy or sell.

On Jan 19th of 2024 the S&P500 hit an all-time high. After 3+ years of a bull market an investor would be perfectly reasonable in thinking that stocks were overvalued, or that a pullback was surely due and holding off on investing any more money until that happened.

The thing is, that investor would have missed out on 56 more all-time highs the S&P500 would go on to set in 2024.

As Ronald Read and Warren Buffett have shown us, the key is consistency. Invest regularly and invest often, regardless of market conditions. Over the long-term the market trends ever upwards, regardless of if you got in “at the best time.”

3. Only Invest In What You Understand

Ronald Read invested in a diversified portfolio of blue chip stocks that he understood. Warren Buffett long avoided investing in tech companies because he simply didn’t understand them.

Whether you’re buying an ETF or the stock of an individual company. Understanding what you’re buying and why you’re buying it is the key to investing success. You don’t have to chase trends or invest in EVERYTHING that becomes the hot investment of the time. You just need to do what works for you and lets you achieve your financial goals.

If you can’t explain why something is a good investment, or what a company does, you probably shouldn’t put your hard earned money into it!

4 Consistency Is Key

One of the best habits you can have as an investor is to invest consistently. Ronald Read likely never made much more than minimum wage, yet he was able to amass an $8 million fortune because he consistently invested small amounts of money for a long period of time.

It doesn’t matter if you can invest $100 or $1000 per month as long as you make it a habit to do it consistently.

A great way to do this is by automating your investing process. It lets you ensure that you’re always investing without you needed to pay it constant attention. M1 Finance makes this easy and convenient, which is why they’re where I choose to invest my money.

5. It’s Not Always Right To Invest

Investing is a long-term endeavor that works best when your money is allowed to work for a long period of time! This means that not every dollar you save or earn is a candidate to be invested.

My general rule of thumb is that any money I could conceivably need to use in the next 5 years is money I shouldn’t invest. The markets can be volatile in the short term and there’s always a risk your investments could be down in value for even a period of a few years.

The last thing you want to happen is to invest money you need for something important in the near term and have had that investment lost value when you need to pull the money out.

During the COVID market crash in 2020 the S&P500 fell over 30% over just a handful of weeks. If you were one of the thousands who also lost their job in this period and had to pull your “emergency fund” out of the stock market to get by you would have been forced to sell at a huge loss.

However if you were able to leave that money invested, you would have been able to enjoy the market recovery and massive upward run it’s been on ever since.

That doesn’t mean you have to sacrifice earning on that money you might need in the near term. I recently posted this video of what I think the best short-term investment options are for your cash in the coming year.

Thanks for reading! As always, feel free to comment or respond with your thoughts, I read them all!

• Jay