5 Boring Money Habits That Trigger Exciting Wealth Gains, From Humphrey Yang
If you want to grow your net worth, it’s easy to think you need to pick the right investment and go all in. But according to personal finance creator Humphrey Yang, you need to compile and enact money habits consistently over time. He calls this the “boring stack,” and if you follow all five layers, he says hitting your net worth goals will be easy.
1. Know Your Number
Vague goals often produce vague results. That’s why the first habit Yang shared in a recent YouTube video is knowing your exact net worth goal and breaking it down into daily, weekly or monthly actions.
“If you’re able to write down goals that are very specific and measurable, you are 42% more likely to hit them,” he said.
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For example, if you want to hit $100,000 in five years, you need to save or invest $55 a day. That's after bills, taxes and expenses. To reach the same amount in three years, you need roughly $91 in daily savings.
Yang recommends having a reasonable timeline. And the right timeline depends on how much you make and your investing returns. Remember that investing returns matter far less than you'd think, especially early on. Your savings rate matters more.
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2. Become Hard To Replace
One obvious way to speed up your wealth accrual is to increase your income. And the best way to do that is by learning a skill that isn't easily replaceable by AI or another person. Then you're in a strong position to negotiate for your worth.
“By being hard to replace, you will make more money,” Yang said.
This comes down to supply and demand. Skills that are hard to automate often command higher pay. Think of trade skills, such as HVAC technicians, electricians and plumbers — you cannot outsource them to a robot yet.
Another skill Yang believes is impervious to AI is excellent communications writing, especially now that AI generates almost similar content for everyone. If you can stand out clearly and concisely with your own voice, you offer what AI can't.
3. Control Your Spending
Earning more can help but knowing how to spend and save more is what drives net worth.
“Every dollar you don’t spend gets you closer to that $100,000 number,” Yang said.
Instead of extreme frugality, he recommends three practical tips:
24-hour rule: Before spending hundreds or thousands on inessential purchases, you need to wait 24 hours. In most cases, you’ll find that you actually don’t need the item and it was an emotional decision.
Alternate swaps: Yang also suggests swapping expensive buys with cheaper alternatives and directing the difference toward your net worth goal. For example, instead of going to Starbucks every day, you can make coffee at home.
Cut costs on the biggest expenses: Most people's biggest chunk of their payment goes to mortgage/rent, groceries and car costs. Think about where your money is going in these three categories and find ways to cut costs. That could mean shopping for cheaper auto insurance or buying groceries in bulk to save money.
Doing all this doesn’t mean you’re too cheap or frugal to a fault.
“If you’re deliberate and intentional with your money, you will be in the right frame of mind to change your financial habits,” he said.
4. Automate the Right Behaviors
Once you have the first three habits in place, you need to automate these behaviors. Yang relates what James Clear said in his book Atomic Habits about designing an environment so that the right behaviors happen automatically.
Yang recommended setting up automatic transfers to both your savings and investing accounts. This often removes the temptation to spend that money. This way, you’ll be paying yourself first — one of the proven habits to build wealth.
5. Give It Time (Even When It Feels Slow)
Exploring your net worth won’t happen overnight. In most cases, it will take years of consistency. Yang said this is the hardest of them all. That’s why many people quit too early. They follow the plan for a few months, don’t see dramatic changes and assume it’s not working.
Wealth-building often takes years to reach meaningful milestones if you stay consistent.
“The boring path does work,” Yang said. “It just requires a lot of time and discipline.”
This article was provided by MoneyLion.com for informational purposes only and should not be construed as financial, legal or tax advice.
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