ASA Nwsltr0514

Adam Smith Advisors
A Cherry Tree Affiliate

May 2014
Published by Keith Tufte, President of Adam Smith Advisors, LLC,

ADAM SMITH INSIGHTS:
with insights on investing and wealth management.
INVESTING QUOTE OF THE MONTH: “Wealth is often the result of a lifestyle of hard work, perseverance,
planning, and, most of all, self-discipline.”–Thomas Stanley (author of “The Millionaire Next Door”)
DAILY HABITS OF WEALTHY PEOPLE

What do rich people do on a daily basis that is different from other people? Can people’s positive daily habits lead to financial
success over time? A study (and book) by Thomas Corley suggests that daily behavior can be one factor that contributes to
economic outcomes.
DAILY HABITS OF WEALTHY PEOPLE:

1. They get up early. 44% of wealthy people wake up 3 hours or more before work starts
vs. only 3% of poor people.
2. They set goals. 80% of wealthy people are focused on accomplishing some single goal.
Only 12% of the poor do this. In addition, 67% of wealthy people write down their goals.
3. They have daily to-do lists. 81% of wealth people maintain “to-do” lists vs 19% of the poor.
4. They read. 88% of the wealthy read for 30 minutes or more each day for education or
career reasons. Only 2% of the poor do so. In addition, 63% of rich people listen to audio
books during their commute.
5. They network. 79% of wealthy people network five hours a month or more.
6. They exercise. 76% of wealth people exercise aerobically several days a week.
7. They avoid junk food. 70% of rich people eat less than 300 calories of junk food per day,
while 97% of poor people eat more than 300 junk food calories per day.
8. They don’t gamble. Only 6% of the wealthy play the lottery vs. 77% of low income people.
9. They limit their TV time. 67% of wealthy people watch one hour or less of television per
day vs. 23% of the poor. Only 6% of wealthy people watch reality TV vs. 78% of the poor.
10. They are constantly improving their skills. 86% of high income people believe in lifelong
educational self-improvement.
11. They believe hard work and good habits lead to success. 84% of rich people believe that
good habits create opportunity and luck. Only 8% of the wealthy believe that wealth comes
from random good luck vs. 79% of low-income people.
Source: Thomas Corley. “Rich Habits: The daily success habits of wealthy individuals”. Corley looked at hundreds of wealthy and poor
people in the U.S. and examined their daily habits. Wealthy people were defined as people with incomes over $160,000 and assets of more
than $3.2 million. Poor people were defined as incomes under $30,000 and assets of less than $5,000.
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It is interesting how different some of the daily habit statistics are for wealthy and low income people. Personally, I don’t pass the
test on many of these daily habits of wealthy people. I eat too much junk food, watch reality TV (House Hunters), and I watch too
much television during football season. It seems that individual daily habits and choices can cause different results in terms of
financial success and wealth. People who work hard and are constantly learning and improving their skills often, but not always,
end up having increased financial success. Some of these significant habit differences between the rich and poor raise the ques-
tion of what came first, the financial success or the positive daily habits? We believe many of these daily habits came before the
financial success for most people, and are one factor in helping cause their financial success. Most of our clients are successful
financially, and most of their success is self-created (not inherited). Younger people (the children of our clients) who are interested
in increased financial success may want to adopt some of these daily habits.
Of course, there are many reasons beyond these daily habits that can lead to financial success. Other factors might include luck,
inheritance, having good parents, having access to good schools, being in the right place at the right time, career choice, and where
you live, to name a few. Improving or changing your daily habits may have less of a positive impact on the wealth of people who live
in a third world country or an impoverished neighborhood in a large U.S. city, for
“We are what we repeatedly example. You may be a teacher or a social worker and have all of these positive
daily habits, but because of your career choice you are unlikely to become fabu-
do. Excellence, then, is not an
lously wealthy. Adopting the positive daily habits of financially successful people
act, but a habit.” — Aristotle
will not necessarily make you rich, but it may aim you in the right direction for a
healthier life and increased success (however you define success). Many people
are not interested in increased financial success, do not think it is possible for them, or do not believe it would make them happier.
That is OK. They may still find these positive daily habits valuable.
THE MILLIONAIRE NEXT DOOR

Another excellent source of information on this topic is the book “The Millionaire Next Door” by Thomas
Stanley. Stanley has studied hundreds of millionaires and has similar findings. He says most millionaires
live below their means. They are frugal, and their spouse is equally or more frugal. 50% of the millionaires
he surveyed have never spent more than $29,000 on a motor vehicle. One of the most popular vehicles
owned by millionaires is the Ford F150 pickup truck. 80% of America’s millionaires are first generation
rich, meaning they earned it themselves. Wealth is what you accumulate, not what you spend. Stanley
says one of the most common denominators among those who successfully build wealth is that they
allocate their time, energy, and money efficiently, in ways conducive to building wealth. Millionaires
believe financial independence is more important than displaying financial status. Stanley concludes
that building wealth takes discipline, sacrifice, and hard work.
Adam Smith Advisors, LLC (ASA) provides unique wealth management services for a select group of client families to help give them
peace of mind. Author Keith Tufte, (CIO of ASA) has over 25 years of successful investment management experience as a Wall Street
Analyst, Mutual Fund Portfolio Manager, Director of Equity Research for a major mutual fund firm, Hedge Fund Portfolio Manager, and
Wealth Management Advisor. Please FORWARD this e-mail to friends/relatives/business associates that you think may have an inter-
est. Please see our website at http://www.cherrytree.com.
ADAM SMITH ADVISORS, LLC
Keith N Tufte, CFA, MBA • ktufte@cherrytree.com • Cell (952) 465-1785 • Office (952) 253-6006
Legal Disclaimer: These materials do not constitute an offer or recommendation to buy or sell any securities or instruments or to
participate in any particular investment or trading strategy. They are for informational purposes only. ASA gathers its data from
sources it considers reliable. However, ASA makes no express or implied warranties regarding the accuracy of this information
or any opinions expressed by the author and may update or change them without prior notification.

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Adam Smith Advisors

A Cherry Tree Affiliate

Published by Keith Tufte, President of Adam Smith Advisors, LLC,

DAILY HABITS OF WEALTHY PEOPLE

DAILY HABITS OF WEALTHY PEOPLE:

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THE MILLIONAIRE NEXT DOOR

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