Charles Duhigg, author of The Power of Habit: Why We Do What We Do in Life and Business, says “Change might not be fast and it isn't always easy. But with time and effort, almost any habit can be reshaped.” Think of the last time you decided to get fit and went to the gym, you don’t get the results you want by working out 10 hours a day once a month, but you may see results when you work out 30 minutes a day consistently over 20 days a month. I  believe that with consistency and persistence, an average person will be able to achieve great success. Now that we have covered some of the basics of retirement accounts such as 401Ks and IRAs, you may be wondering, how you can save the money to invest in these accounts, let's think of 4 ways we can start building habits that will create a better financial future for you and your family:

1. Increase your income

Have you ever heard that the average millionaire has 7 or more streams of income? Depending on your current situation, you may not be able to start a business or invest in real estate immediately, as it is important to plan ahead for things such as reserves, as well as maintain liquidity in case there are unforeseen life changes. However, there maybe opportunities at your current W-2 job that may result in a salary increase, or a side hustle that you can start (e.g. E-commerce, blogging, driving for Uber, tutoring, etc.) to build a bigger nest egg. By increasing your income and maintaining the same lifestyle, you will be able to re-allocate the excess income into other assets sooner than you thought possible.

2. Decrease your expenses

This advice may seem obvious, but its important to note that if you increase your income and your expenses grow with it, then the net effect is the same, or in some cases, your worse off as our tax system is a progressive bracket, meaning you pay more taxes the more you earn. Don’t take your promotion as sign to “keep up with the joneses” and buy a bigger house, and purchase that newer model car. Although there is a time and place to celebrate your hard work and reward yourself, you have to take time to think if it is worth delaying your financial freedom X more years. Instead of comparing yourself to your peers, look inward and find out what makes you happy. When you identify what makes you truly happy, you will end up using your money with more purpose and be less inclined to buy what you may think will impress your peers.

Alot of financial advisers may say that cutting expenses is a “scarcity mindset” and you should grow and increase your income. While I wholeheartedly agree that growing your income should be emphasized, you also have to review your expenses to ensure that there aren't any holes that are causing leaks in your ship towards financial freedom. By using apps such as Mint or Personal Finance, you should be able to have a birds eye view of where your expenses are being allocated. Check the latest cable bill, phone bill, and other variable expenses such as eating out and clothing to make sure that whatever your spending your after tax dollars on are truly necessary. As investors, we have to have a different mindset. If you cut your phone bill in half from $150 to $75 a month. Not only are you saving $75, you can factor in $22 (assuming 30% tax bracket) and $8 (assuming you are re-investing the funds into an index fund or rental property generating 10% in annual returns). Remember, these small changes in habits will create big changes over a long period of time.

3. Life-long education

Another important piece of building habits for your financial future is to educate yourself. As you may have taken courses throughout your life that will be useful towards your current job, it is crucial that you take ownership of your financial future and not rely solely on other people. I personally like to know enough to be dangerous, and that is when I rely on the advice of experts such as my CPA, lawyer, and real estate partners to help me solve problems and plan my finances. However, if I didn't spend time educating myself through books, courses, podcasts, and meeting other investors, I would have to take people’s word at face value, and would not have the opportunity to ask good questions that may result in further benefit. Remember that this is a long journey and you are the captain of the ship. No one is going to care more about your financial well being than yourself.

4. Start early and often

Continuing with the theme of building habits and maintaining consistency. It is important to start sooner than later. As Albert Einstein was famously quoted for saying, “compound interest is the eighth wonder of the world”, which simply means, time is on your side. Without being attached to the different market cycles and trying to determine if you’re at the bottom of the market before diving in, it's important to start early and often. Going back to my example of hitting the gym once a month for 10 hours at a time, versus going for 30 minutes a day for 20 days a month, with all things equal, you will see that the person with consistent effort will have better results over time.

Good Luck!