Money Series: Secret habits of the truly wealthy

This is the fifth article in a series on money I’m writing. If you haven’t read the previous articles, start here. The purpose of this series is to maximise your enjoyment of your life’s journey.

In the previous article, we shone a light on some of the surprises we are likely to encounter on our investing journey. Now, let’s discuss identity and how to build the habits of a truly wealthy person.

While compounding works its magic on our ⚙️ automated investments, we’ve given ourselves the grace of a whole lot of time and mental space to figure out how to become wealthy before the numbers catch up.

The way we create wealth in our lives that can’t be measured in dollars and cents is ultimately up to each of us. In my experience, the best way to create this type of deeply meaningful wealth is to decide who you want to be and then build habits to become that person. 😌

Your way of getting there will be different to mine and that’s okay. The point is to decide what a wealthy life means and then start creating that life for yourself today, rather than waiting until you have a certain amount of money.

As investors, we can’t control what the market does, only our behaviour. Taking responsibility for this makes it easier to invest well over a long period of time. The difference this has made to my own wellbeing, let alone my ability to invest well, is truly ridiculous. I’m only one-fifth of the way to my financial goal at the time of writing, but the habits I’ve built over the past couple of years make me feel like I’m there already. 

Building good habits that stick is how we create this money-can’t-buy wealth.

Let’s get ridiculous.

How to be anyone

Our habits determine who we are. So the way to become the person you want to be is:

  1. Decide who you’d like to be (an identity)
  2. Build habits to prove this identity to yourself

Let’s take it step by step.

Step 1: Decide who you’d like to be (an identity)

Deciding who you want to be means choosing an identity. Identity is just a fancy word for who you are.

Have you noticed how happy the world is to decide this for you? This can make it hard to decide for yourself. When your parents have one opinion, your friends have another, your partner has another and your boss has another…no wonder it’s challenging to think for ourselves!

The cost of not choosing an identity is that you never quite truly become who you have the potential to be. Three years ago I had never really put any thought into my identity. My habits showed. I would turn up to work right on the start time of 8:30 a.m., I would sometimes get emotional when things didn’t go my way, and I would often go to bed quite late—getting by on 5 to 7 hours of sleep. After reading James Clear’s bestselling book Atomic Habits, I realised if I was ever going to change my habits, I needed to change my identity first.

When brainstorming identities, find a quiet place. 🔕 This is a conversation between you and yourself. Nobody else is welcome, no matter how much they love you. 

At this point, it’s easy to skip ahead to listing all the good habits you could form. It’s far more productive (though requires more vulnerability) to ask yourself, “Who am I, what do I want and who do I want to be?” The good news is that we’ve already done this in the first article in this series. Our ideal vision for our life contains all the clues we need on what this person looks like.

Write down all your ideas on who you would like to be. It can also be helpful to think of people you know, or people you know of, who already embody the identity you want. There are no wrong answers and you don’t have to do anything on this list. You’re just brainstorming, so put down whatever comes to mind. Blue sky thinking. 🟦

Your list might look something like:
Feel good in my body
Very good at my job
Great partner
Generous with people

Do you notice any themes in your list? These themes are clues. 🔍

Next, describe who we want to become—our identity of choice—in a couple of words.

Thinking about the themes in our list, I can see the identity ‘high performer’. Let’s play with that phrasing. What about ‘generous high performer’? Maybe ‘content all rounder’?

Choose whatever words make sense to you. When I did this for myself, I thought about my less-than-ideal behaviour—turning up to work at the last minute, getting emotional, going to bed late—and arrived at an identity I wanted to forge instead: being a high performer at work. If I continued on the same track, there was no way I’d ever get the opportunities and pay rises I wanted. This was the identity shift that I felt would have the most positive impact on my overall life at that time.

If you have a couple of different identities you like the sound of, pick the one that you think would make the biggest ➕ positive impact. Once you’ve built the habits to become that person, you can move on to the next identity. Piece by piece, we build ourselves up like a Lego minifigure.

Now, let’s build some habits to prove to ourselves we can become the person we aspire to be.

Step 2: Build habits to prove this identity to yourself

In the previous step, you probably thought of one or two people in your life who already embody the identity you want. Muster up the courage now to ask them how they do it. This will give us some excellent clues about what habits we can build to become the person we want. 

Have a chat with them or send them a message along the lines of:

Hi [name],

I’m trying to build some better habits. I’ve always admired how good you are at [insert thing you admire them for]. What do you do behind the scenes that has enabled you to do this so well over a long period of time? Any insights into any habits you’ve built would be incredibly helpful.

When I did this with someone who was the highest performer at the company I used to work at, they gave me lots of clues into the habits I could build to become a ‘high performer at work’. They told me how they get 8 hours of sleep, how they go to the gym, how they like to dress nicely, and so forth.

Another way to gather clues is to Google search ‘best habits to become [insert identity]’. After reading 3-5 of the highest ranking articles on Google, you will notice some patterns about which habits are the most important and therefore, are most likely to help.

Make a shortlist of at least 10 habits you could form that support your new identity.

If your chosen identity is a happy and healthy person, you might Google ‘best habits to become happy and healthy’. You might even borrow a bestselling book or two from the library about happiness and health. You might send a message to a couple of people along the following lines:

I’m trying to figure out how to be healthier and happier and you’ve always seemed like a pretty happy person. What would you say are the 1-3 things you do every week that have a disproportionate impact on your health and happiness?

Once you have your shortlist of 10 habits, ask yourself: which one or two of these, if I commit, will get me at least 80% of the way towards my new identity?

What we’re doing here is applying the Pareto principle, otherwise known as the 80/20 principle, which is one of the most delightful life principles known to human beings. 🕊️ If you’re a fan of the idea of achieving more by doing less, say hello to the 80/20 principle! In short, it maintains that instead of trying to do everything on our list, we are looking for the 20% of habits—the 1-2 out of the 10 written down—that will get us 80% of our new identity. 

Of course, you won’t know for sure which 1-2 habits on your list will give you 80% of the results until you try them, but for now, just take your best guess. One way I use the 80/20 principle to make decisions about which habits to pursue is I look at my list and I ask myself ‘which habit scares me the most?’ This is usually the habit that I know will have the biggest impact, but it’s typically the one that will require the biggest shift in identity.

Once you’ve selected the 1-2 habits you want to commit to, all other habits in your shortlist can be set aside, ideally in a list titled ‘do not do’. 🚫 You can always come back to them later, but for now, they are just distractions from doing what really matters. 

For me, the one habit that changed things and made all the good habits that came afterwards possible was deciding to get 8 hours of sleep before every workday.

The best habits for you to form will depend on the identity you chose. If the identity you’ve chosen is that of a healthy eater, then consuming 10,000 calories a day would be a bad habit to form. However, if the identity you’ve chosen is a professional sumo wrestler, then consuming 10,000 calories a day would be an excellent habit to form.

Now that we’ve selected at least one keystone habit to build, let’s talk about building habits that last.

How to build habits that stick

There are 4 stages to every habit. Together, we call this a habit loop.

The Cue kick-starts your brain to begin the behaviour. Craving is the motivational force behind everything we want. Response is the actual habit you do—this can be a thought or an action. Reward is the end goal of every habit. 

Since this is a habit loop, the last stage (reward) becomes associated with the first stage (cue) every time the craving is satisfied.

All habits contain all 4 stages of the habit loop. We can adapt these 4 stages into a practical framework to help us change our behaviour, which James Clear refers to as the Four Laws of Behaviour Change. [1]

The four most powerful ways to form good habits are: 

  • The 1st law (Cue): Make it obvious
  • The 2nd law (Craving): Make it attractive
  • The 3rd law (Response): Make it easy
  • The 4th law (Reward): Make it satisfying

The four most powerful ways to break bad habits is the inverse: 

  • The 1st law (Cue): Make it invisible
  • The 2nd law (Craving): Make it unattractive
  • The 3rd law (Response): Make it difficult
  • The 4th law (Reward): Make it unsatisfying

For example, when I was forming a daily meditation habit I made it obvious by writing the word ‘meditation’ on a sticky note and putting it on the bedside drawer I would walk past on my way to the bathroom. To make it easy I put a chair in the bathroom and decided to only meditate for 1 minute per day immediately after I had brushed my teeth.

For an example of the inverse, to break the bad habit of eating sweets at work, I made it invisible by putting any sweets in my backpack instead of on my desk. Then, to form the good habit of eating better snacks during the workday, I made it obvious, by having a piece of fruit next to my computer.

When I was breaking the bad habit of not getting enough sleep each night, I made it unattractive by measuring the amount of sleep I got each night and showing the graph to my partner and boss each week. 

Another way to ‘make it easy’ is to ‘make it small’. Ask yourself, ‘what is the smallest possible version of this habit?’ With sleep, I started by aiming for 8 hours before each workday. This meant on the weekends I could still do whatever I wanted. It’s all about making it easier to get started. Don’t fall into the trap of trying to create a habit for someone who is at Level 10 when you’re at Level 1. Successfully changing your identity means improving bit by bit. We optimise ourselves sustainably by optimising one small step at a time. 🐢

I really love the phrase ‘measure what matters’. Whenever I want to change something, I always measure. 📏 I didn’t do this for the first 30 years of my life and it held me back. The fastest and cheapest way to do this is with a spreadsheet. When I was forming the habit of getting 8 hours of sleep, I would enter the time I went to sleep, the time I woke up, and the total amount of sleep I got into a Google Sheet. After a couple of months of doing this, there was no need to continue writing it down, since the habit was so ingrained. But I kept it up for a year and at the end I had a snazzy graph to show off to anyone that was willing to look! 

My friend Clarissa took a more tech-savvy approach to measuring. 

“I find using a smartwatch, which I initially bought for the sole purpose of motivating myself to get more daily steps in, super helpful. Because I could look down at my watch during the day and see exactly how many steps I’d done, the data motivated me to keep going. I also use it to track my sleep, so every morning I wake up and can see how many sleep cycles I went through and it gives me a score out of 100 as to the sleep quality. This has also been really helpful in improving my sleep.” [2]

I think the reason measuring what we do is so powerful is because raw data is humbling. The numbers never lie! This and having accountability buddies—friends, colleagues, partners, family who hold you accountable to a habit you’re trying to form—are the best positive reinforcement methods I’ve used for helping form and maintain any habit.

Why change now?

If not now, when? ⏳

This is an incredible time in human history to be learning about habits, because one of the best-selling and most actionable books in the world of the past five years is a book about habits: Atomic Habits by James Clear. I’d highly recommend grabbing a copy from the library or book shop, otherwise, I’ve summarised many of its teachings in this article.

Clear writes, “Every action you take is a vote for the type of person you wish to become.” He continues, “No single instance will transform your beliefs, but as the votes build up, so does the evidence of your new identity. This is one reason why meaningful change does not require radical change. Small habits can make a meaningful difference by providing evidence of a new identity. And if a change is meaningful, it is actually big. That’s the paradox of making small improvements.

A final word on being gentle with yourself

When changing your identity, be gentle. Self-kindness is key. Do not beat yourself up if you miss a day. If you were helping a friend build good habits and they missed a day, would you tell them they’re useless and that there’s no point in even trying? No. You would instead be understanding, help them face the fact they missed a day and encourage them to get back on the horse tomorrow and keep going. 🫂 Zoom out and see the bigger picture. In the grand scheme of things, one day doesn’t matter that much.

For me, getting 8 hours of sleep before each workday was the 20% of habits on my list that gave me 80% of the results. Combined with other identity-shifting habits, like doing 5 minutes of daily meditation and investing a portion of my income each week, it changed my life and made me wealthy beyond my wildest dreams—in energy, mood, decision making and general overall performance.

Proactively deciding who you want to be and then building that person, habit by habit, is the ultimate definition of a money-can’t-buy wealthy life. Now that you’re in on the secret, who do you want to be?

Quick summaries

Steps to form any habit immediately

1. Choose an identity, e.g. I want to be an energetic person. 
2. List as many habits associated with this identity as you can think of: aim for at least 10.
3. Apply the 80/20 principle. What are the 20% of habits on your list that will give you 80% of your new identity, e.g. getting 8 hours of sleep each night.
4. Form the habit, measure progress, and find an accountability buddy or two. Your approach can include a combination of making it obvious, making it attractive, making it easy, or making it satisfying.
5. Be kind to yourself. Changing identities takes time, but is so worth it!

Best habits to form to become a truly wealthy person (in no particular order)

This ultimately depends on the identity you choose, but here are some all-time classics that have had a massive impact on my own life.

  • 🛏️ Get 8 hours of sleep per night
  • 🏃 Get 30 minutes of moderate exercise per day
  • 📖 Read 30 minutes per day
  • 🧘 Meditate for 5 minutes per day
  • 🎁 Spend 30 minutes per day giving to others without expecting anything in return
  • 💸 Invest a portion of your income into assets such as index funds every time you get paid
  • 🎩 Dress in a way that makes you feel good every day
  • 🏦 Create sinking funds when you want to save up for something. Instead of saving for many things with one giant pot of money, have specific bank accounts for specific short to medium-term expenses.
  • ✍️ Journal first thing in the morning and at the end of the day
  • 👩‍❤️‍💋‍👨 Schedule a ‘couple review’ with your partner every month where you talk about your relationship—what the other person is doing well, what you appreciated, what you’re doing well as a team, what was hard and what you would like more of

Best resources on habits

1. Atomic Habits by James Clear 
2. The Power of Habit by Charles Duhigg 
3. 3-2-1 newsletter, an email newsletter by James Clear (one of the world’s most popular email newsletters)

Related resources

A Few Laws Of Getting Rich by Morgan Housel
Your Money And Your Health by Mad Fientist and Parker Hewes, which provides an excellent framework on how to manage the relationship between your money and your health.

Next steps

Once you have chosen an identity and are building the keystone habits to prove it, the next step is to learn how to give. This is the topic of the next article in this Money Series. Click here to continue learning.



[1] In this generous excerpt from his bestselling book Atomic Habits, James Clear lays out his legendary breakdown of how to start new habits that actually stick.
[2] Speaking from experience, Clarissa also happens to be an outstanding personal coach.

Art by Sierra Truong

Thanks to Hamish Bulsara, Christine Chow, Cynthia Gao, Clarissa Hirst and Emily Zhu for reading drafts of this.

Also to Dave Cameron, Sierra Truong, Claire Twyman, Adam Walmsley and Pippa McCormack Wolf for reading a very early draft of this.

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Disclaimer: Like your all-knowing uncle telling you the latest stock tip, this should not be considered financial advice.

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