Investing Money

9 Everyday Habits Of The Average Millionaire

Did you know that there are over 18 million people in the United States who are millionaires? In fact, some of those millionaires probably live in your neighborhood. But, you would never know there’s a millionaire living next door. In this article, we discuss the 9 everyday habits of the average millionaire and how you can adopt these habits to be successful financially.

There’s a popular belief that millionaires attain their money the easy way: inheritance, winning the lottery or through criminal activity. The truth is that the majority of millionaires discovered how to save a million dollars. In the book, “The Millionaire Next Door”, by Dr. Thomas Stanley and Dr. William Danko, it is revealed that most millionaires surveyed were self-made. These men and women started from scratch, with little to no money, and worked hard at saving and investing.


  • Learn 9 Everyday Habits of the Average Millionaire
  • Definition of a Millionaire
  • Learn How to Get Rid of Debt and Live Frugally
  • Learn How to Save and Invest Like Millionaires
  • Develop a Financial Plan and Start Early
  • Develop a Team Who Can Help You Grow Your Wealth

Prior to discussing the things that millionaires do to become millionaires, we should detail the 9 everyday habits of the average millionaire.

9 Everyday Habits of the Average Millionaire

Everyday Habits Of The Average Millionaire
  1. Wake Up Early Every Day
  2. Set Aside Time for Meditation or Quiet Thought
  3. Exercise Daily
  4. Follow a Schedule
  5. Maintain Self-Discipline
  6. Follow a Plan/ Be Consistent
  7. Set Goals
  8. Educate Yourself Through Reading
  9. Get Plenty of Sleep

Wake Up Early Every Day

Most successful people get up early every day. This is a habit that is formed over time and will be something you desire to do when you are passionate about what you do. Getting up early builds discipline into your day and makes the day more productive by setting the tone and getting more done.

Set Aside Time for Meditation or Quiet Thought

Meditation or quiet thought is important for finding balance during each day. During meditation, the mind is directed to a focal point that prevents negative thoughts, fears or worries from infecting the mind. This is critical when millionaires focus on the task at hand and their personal goals.

Exercise Daily

Regular exercise is not only healthy for long term personal health, but it has positive daily effects on the mind and body. Something as simple as going for a 15-20 minute walk can spike brain activity and thought, which is needed for focus, creativity and overall success.

Follow a Schedule

Following a schedule on a daily basis is important because it takes time to build up wealth. Nothing is created in just a day and becoming a millionaire takes time and consistency. Becoming a millionaire is like walking on a long journey. Each step you take brings you one step closer to your destination of wealth.

Maintain Self-Discipline

Discipline is a critical part of any plan for success. Maintaining discipline in your daily schedule, exercise and meditation routine ensures that there can be a successful outcome in your quest to become a millionaire. You must be determined to remain disciplined. Never lose site of what you want.

Habits Of The Average Millionaire

Follow a Plan/Be Consistent

Following a plan and being consistent will allow you to establish a clear road map for what you want to achieve. Being consistent will allow you to implement the plan without fail.

Set Goals

Setting goals goes hand in hand with your plan. Although goals are usually done on an irregular basis, they can be implemented into your daily plan to assist you in achieving millionaire status. Your goals should be clear and should be written down. Re-visit them often to review them so they are clear in your mind.

Educate Yourself Through Reading

Reading books and periodicals is important for several reasons. First, updating your understanding of evolving markets and the financial landscape can help you adjust your plans and goals as you move forward. In addition, reading can help you develop personally, becoming more efficient in what you do and how you do it.

Get Plenty of Sleep

Getting enough rest each night is critically underrated. There are numerous scientific studies that show how important getting a good night’s rest can be on brain and body health. Pay attention to what your body tells you. Rest when you need it and establish a sleeping schedule that will allow you to excel at life.

Definition of a Millionaire

A millionaire is defined as a person who has a net worth of at least one million dollars. Net worth is calculated by subtracting your debt from your assets. For example, if you own a $400,000 home, a stock portfolio of $800,000 and owe $100,000 in debt, then your net worth is $1.1 Million ([$400,000 + $800,000] – $100,000 = $1,100,000).

When people think of what a millionaire is, they imagine people like Leonardo DiCaprio (movie star), Elon Musk (inventor and investor) or Donald Trump (real estate tycoon). However, most millionaires live a simple, quiet life. The road to riches is not necessarily glamorous or exciting; In fact, becoming a millionaire requires sacrifice and discipline.

As a result, we’ve developed some guidelines that will show you 9 everyday habits of the average millionaire. If you are able to follow these guidelines, financial success can be in your future.

Pay Off All Debt

Average Millionaire

Most millionaires did not get rich by borrowing money. In fact, most people with a significant net worth avoid debt. They know that when you have debt, money is working against you. So it’s important to pay down all your debt prior to taking the next steps. Later, you can make your money work for you, not against.

Create a Consistent Source of Income

Put Aside 10-15% of Your Regular Income for Investment

You don’t have to own your own business or be an entrepreneur to be a millionaire. There are many millionaires who are average people who work 9-5 jobs every day, just like you.

One of the keys to their success is having a consistent source of income. Every month, or each paycheck, they divert 10-15% of their earnings to investment(s). An example would be investing in a 401(k), Investment Retirement Account (IRA) or Real Estate. Year after year, your money will grow and work for you to create wealth.

Begin Saving Money

Saving Money teaches you the habit of not spending and allows you to take advantage of opportunities

Saving money is a lost art. Historically, people’s lives depended on saving money. If a natural disaster struck or just bad luck, people could fall back on the money they saved to stay alive. Today, life is easier. Credit is widely available to most people and we frequently borrow money for cars, houses and purchases on credit cards.

But, saving money is critical to becoming a millionaire for several reasons. First, learning to save money requires that you not spend all your money. Legendary investor, Warren Buffet, famously said that the most important rule of investing is “to not lose money.” So, don’t spend all your money. Instead, save some money. Saving money is an excellent habit to learn.

Second, saving money will give you the confidence to seize opportunities when they arise. When people live paycheck-to-paycheck, they waste their time struggling with bills, instead of focusing on future wealth creation.

Create a Budget

It’s important to keep track of your money. And a budget helps you achieve that objective. Having a balanced budget means spending less of your paycheck. Preferably, you will have a significant amount of money left over to pay off debt and for investing. In short, everyone should budget, whether you are a large corporation or just one person.

There are many budget options online, including spreadsheets, mobile apps and even printable budgets. Check out our “Best Budget Apps” article for more information and recommendations.

Live below your means

Millionaires do not spend money on unnecessary expenses, such as eating out, new cars and designer clothing

In many cases, frugal living is the cornerstone of success for millionaires. This simply means spending less than you make. A simple monthly budget can assist you in determining whether you are meeting your goal.

Unfortunately, living frugally is not popular in the 21st century. Popular culture dictates what “normal” consumer behavior looks like. And it’s considered normal to go out and spend money at restaurants, on vacations and the like. In addition, it’s “normal” to buy a big house and drive a new car.

The reality for millionaires is that they don’t ascribe to normal behaviors. People with the millionaire mindset only purchase what is needed. They don’t buy new cars or fancy things. As a result, the extra money saved from this frugal behavior is put to work in investments.

Develop a Financial Plan

The Average Millionaire

Once you’ve developed the millionaire mindset, it’s time to create a financial plan. Write down the details of what you want to achieve. If your goal is to own one million dollars in real estate, then plan accordingly. Include details of how you will acquire money to invest and how it will be allocated. In addition, set a timeframe for when you expect to achieve your goal. Your budget will be an addendum to the plan. Finally, review the financial plan frequently and assess your progress.

Develop Good Habits

Good Habits Include Budget Control, Staying the Course, Investment Knowledge and Discipline

Developing millionaire habits is critical on the path to acquiring wealth. Once you’ve established your goals and your financial plan, you must implement good habits. Good habits include:

  • Budget Control
  • Staying the Course
  • Investment Knowledge
  • Millionaire Habits and Discipline

Budget control means that you operate under a balanced budget. Spending is controlled so that remaining cash flow is routed toward smart investments. Good investments are critical for converting thousands of dollars into millions of dollars.

Staying the course requires that you consistently repeat what you are doing, so long as you are successful. If something doesn’t work, it can be changed. But the power of earning from compounding interest is continuously investing money.

Being a good investor requires that you continuously educate yourself. You want to learn as much as possible about your investments. You will accrue knowledge and wisdom on different investment strategies over time.

Learning what has worked for other millionaires is the easiest and most secure strategy for success with money. Millionaires get up early each morning and focus on their goals. Investing money is a priority to them and their focus is on earning and business. Many successful millionaires make time for self-development activities, such as exercise and meditation. And they make these habits part of their daily ritual.

Invest Early

The sooner you can get started on your millionaire journey, the better. Many millionaires credit their success not to windfall earnings, but to incremental investing over long periods. Compounding interest is a powerful tool that can work for you in growing your wealth.

Grow Your Income

Maximize Your Income by Starting a Business or a Side Hustle

Once you’ve mastered budgeting and your debt is settled, you want to maximize the money that you earn. You will find that expenses remain almost the same from year to year, but increasing your income can have significant results. Earning more money means that your contribution to your investments will grow your wealth more rapidly.

There are many ways that you can improve your income. For example, start a small business out of your home. Explore what you like to do in your spare time and determine if you can make money doing it. For example, photography can be a hobby or a business.

Other sources of income can be part time jobs, weekend work, side hustles or even buying and selling things.

Wrap Up: 9 Everyday Habits of the Average Millionaire

Many Millionaires Operate a Business, Network and Work with a Financial Team

First, in our discussion of the 9 everyday habits of the average millionaire, many millionaires reach their goal quicker by operating a small business. Owning a small business allows you to control how the company operates and take more profit for the extra labor you put in.

Second, maximize the networking that you do with others. Participate in conferences or just promote contact with like-minded people in your area. The network effect can have positive financial benefits for you. Don’t isolate yourself.

Finally, surround yourself with a financial team. Seek out a respected tax professional, attorney, business coach, etc. Sometimes an ounce of prevention is worth a pound of cure. Staying in good legal standing with state and federal regulations can help you grow. In addition, these professionals can save you money in the long term.

These guidelines are the 9 everyday habits of the average millionaire. Want to learn more about saving and investing?

Read More:

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10 Things to Know Before Starting a Budget

The Best Budget App

How to Make $200 Fast

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Financial Planning Services

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Wealth Building Cornerstones

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How Much Savings You Should Have at 40

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Debt Elimination

Disclaimer: It is important to note that Piggy Bank Coins does not provide financial advice. We don’t endorse or recommend any financial investments. Instead, we provide information for educational purposes to those seeking knowledge regarding personal finance. However, in the spirit of transparency, note that the author is an investor in cryptocurrencies, precious metals and some equities.

In addition, The Federal Trade Commission (FTC) requires that Piggy Bank Coins disclose to readers that we may receive commissions when you click our links and make purchases. However, this does not impact our reviews and comparisons. Moreover, we try our best to keep things fair and balanced, to help you make the best choice for you.


Option Trading For Dummies

In Option Trading for Dummies,  we detail what options are, their purposes, how options are traded and the risks. We will also define some other terms like calls and puts and provide some real examples of option trading for dummies.

Options Definition

With no Requirement to Buy or Sell, Options are Derivative Contracts Traded on a Limited Time Basis

“Options are financial instruments that are derivatives based on the value of underlying securities such as stocks. An options contract offers the buyer the opportunity to buy or sell—depending on the type of contract they hold—the underlying asset. Unlike futures, the holder is not required to buy or sell the asset if they choose not to.” Investopedia

Although the price of the option is based upon stock value, the option is a contract that is not directly linked to the stock value in the market. Additionally, options are considered derivative investments. Moreover, the option does not represent ownership of stocks or assets until the agreement is finalized.

Equally important, options are commonly traded in denominations of 100 shares of a company. The options contract will be written in a way that allows the buyer or seller to lock in a buy/sell price at some point in the future. However, it’s important to note that when the contract expires at the end of its expiration date, it is worthless.

Long term financial goals

Types of Options Contracts: Call and Put

First, there are two types of options: call options and put options. A call option, also known as an exercise price or strike price, is a contract that determines what price at which the buyer can purchase the option in the future. In contrast, a put option is a contract that determines what price at which the buyer can sell the option in the future.

In addition, call and put options contracts can expire along different time frames. The expiration time frames for contracts can vary from weekly, monthly or several months. Obviously, the longer the length of a contract, the more it costs per stock. Contracts are usually denominated in lots of 100 shares.

Call Option Example

A Call Option is Exercised for a $1,500 Profit

As an example, let’s assume that Tesla is trading at $400 per share. In some cases, the options price will be quoted per stock over a 30-day period. For example, call options might be priced at $5 per share of stock (premium). In this case, the options contract would be $500 (100 shares X $5 per share = $500 contract).

Let’s say that you anticipate the price of Tesla rising to $420. On day 21 of the contract, Tesla meets your expectations and rises to $420. You then exercise your contract and your profit from the trade is $1,500. The math is demonstrated below.

420-$400 = $20 per share increase in value

$420 – ($400 strike price + $5 premium) = $15 realized (nominal) per share profit

$15 per share profit X 100 shares = $1,500 profit

Note: this is a simplified example using estimates to help you easily understand options. There may be other fees/costs involved, such as brokerage fees. As you can see, option trading for dummies is a complicated method of investment.

Why Use Options Trading

Options trading has traditionally been used by Wall Street traders as a hedge against risk. Options contracts can be used as a kind of insurance to counter balance a trader’s portfolio.

History of Options

Options trading has not been around for very long, compared to the history of the New York Stock Exchange. According to, options trading began at the Chicago Board of Options Exchange (CBOE) in 1973. Yet, the New York Stock Exchange was founded in 1792 in New York City.

With the continued movement for deregulation of the financial industry in the past 25 years, options trading has become more popular with retail traders.

Difference Between Options and Futures

Options Contracts Require no Action Upon Expiration; Futures Contracts Require Traders to Buy or Sell Upon Expiration

The primary difference between options contracts and futures contracts is that with options contracts the trader is not required to buy or sell at any time. The trader simply has the “option” to buy or sell shares in a stock. Whereas, futures contracts require the buyer to buy shares of a stock and the seller to sell shares of a stock upon expiration of the contract.

Both Options and Futures can be used to hedge against risk incurred in a portfolio of investments. For example, if you have a portfolio of tech stocks that are considered long investments, then you might purchase options to hedge against a price collapse of the holdings.

The Risks of Option Trading for Dummies

Trading Options can be Highly Volatile and Is Not Recommended for New Investors  

It’s important to understand that trading options is inherently risky. Unlike purchasing assets like stocks or bonds, options contracts are short term derivative instruments that have no real value. In addition, the contract expires in a matter of weeks or months. If the options contract expires and is not exercised, it is worthless.

Legendary investor Peter Lynch of Fidelity Investments had this to say regarding options trading in Once Upon a Time on Wall Street,

“I know that the large potential return is attractive to many small investors who are dissatisfied with getting rich slow. Instead, they opt for getting poor quick. That’s because an option is a contract that’s only good for a month or two, and unlike most stocks, it regularly expires worthless – after which the options player must buy another option, only to lose 100 percent of his or her money once again.”

In case you didn’t follow that quote, Peter Lynch is not a fan of options trading.

Option Trading for Dummies Tragedy

In June 2020, a 20-year-old student named Alexander Kearns who used the Robinhood mobile app to trade options committed suicide. Apparently after entering a trade, Mr. Kearns saw a -$730,000 balance displayed on his account and believed that he had lost a great deal of money. It is believed that he took his own life as a result of the confusion. As a result, Robinhood has allegedly made modifications to the trading app to prevent future confusion among traders.

Investment Wisdom

Thinking and planning for the future are noble activities that we encourage at Piggy Bank Coins. Every adult should learn to budget, save money and invest at some time in their life. If you have a family, it is critical that you begin planning your financial future.

Despite its growing popularity, Option Trading for Dummies is not recommended for most investors. We recommend a more fiscally conservative approach of slow, incremental saving and wealth building. Read more about what Piggy Bank Coins recommends at the links below.

Option Trading for Dummies Wrap Up

As you can see, option trading for dummies is more complicated than it sounds. In addition, option trading for dummies requires a great amount of skill and necessitates great investing risk. If you decide to attempt option trading for dummies, proceed with great caution.

Learn More About Option Trading for Dummies

If you are truly determined to learn more about Option Trading for Dummies , check out the book “Trading Options for Dummies.”

Read More:

How Does Robinhood Make Money?

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It is important to note that Piggy Bank Coins does not provide financial advice. We do not endorse or recommend any financial investments. Instead, we provide information for educational purposes to those seeking knowledge regarding personal finance. However, in the spirit of transparency, note that the author is an investor in cryptocurrencies, precious metals and some equities.

In addition, The Federal Trade Commission (FTC) requires that Piggy Bank Coins disclose to readers that we may receive commissions when you click our links and make purchases. However, this does not impact our reviews and comparisons. Moreover, we try our best to keep things fair and balanced, to help you make the best choice for you.


4 Stages Of The Business Cycle

There are 4 stages of the business cycle: expansion, peak, contraction and trough. We’ll look at these and other cycles and draw some conclusions about the economy and how you can plan for the future.

Experts Have Discovered That Economic Events Happen in Cycles. The Seasons, the Planets and Human Life Itself Are Cyclical

Before we get to the details of the 4 stages of the business cycle, let’s discuss more about economic catastrophe. Unfortunately, the American Great Depression and the COVID-19 shutdown of 2020 were catastrophic events. Yet, some very intelligent researchers have determined that much of what we experience in our lives revolves around cycles.

The sun and the moon follow a cyclical pattern that is predictable. In addition, the earth’s movement through the universe and its relationship to other stars is part of a greater cycle. But here on earth, there are many more cycles.

The life of a human being is part of a cycle. You are born, you become a youth, then middle aged, followed by elderly life and death. Our season are cyclical: Fall, Winter, Spring and Summer. Researchers have discovered that our economy is cyclical as well. Oddly enough, the 4 stages of the business cycle are closely related.

According to Investopedia, the 4 stages of the business cycle are as follows:

“The four stages of the economic cycle are also referred to as the business cycle. These four stages are expansion, peak, contraction, and trough.” -Investopedia

The 4 Stages of the Business Cycle: Expansion, Peak, Contraction and Trough

Expansion occurs when the economy is growing. Prices begin increasing, more people are working. Businesses grow and make more money, hire more workers and pay better salaries. The workers tend to spend more money, buying cars and houses, passing money along through the economy. Most participants in the economy benefit and see more money in their bank account.

The peak of the business cycle is the highest point. It occurs when expansion reaches its maximum. For example, employment in the economy is considered full, prices increases are beginning to look like inflation. Many people will have borrowed great deals of money for bigger houses or more things. The stock market is usually at an all-time high.

During a contraction economic growth begins to slow down. Inflation (price increases) begin to slow down as well. In addition, unemployment may begin to increase and more people find themselves out of the workforce. The stock market may level off or even begin a correction or retracement. New housing starts may decrease during this time period.

The trough is the low point and may also be called a “recession” or a “depression.” People begin to worry about personal finances. Unemployment is higher, borrowing money is more difficult and people struggle to make ends meet. The stock market may be in a bear market trend either going down or flat. Jobs are scarcer and the real estate market is tight.

Economist Ray Dalio and the Economic Machine

Ray Dalio, an economics expert from Bridgewater Associates, has created some really intelligent free videos on understanding the 4 stages of the business cycle. He also is the author of the book, “Principles.” Dalio is really good at simplifying economic ideas and helping you understand why things happen as the do.

How the Economic Machine Works by Ray Dalio

Why You Need to Know About the 4 Stages of the Business Cycle

During the up Cycle the Economy Flourishes; During the Down Cycle the Economy Suffers

It’s important to understand the basic concept of economic cycles because cycles go up and down. The economy bounces back and forth between growth and recession. In down cycles, money is tight, banks are reluctant to lend money, economic growth slows down and people don’t spend as much because they have less money. However, in up cycles, people spend more, banks lend more money, the economy grows and unemployment is low.

There are many investments in the economy that are affected by the economic cycles, such as the stock market, real estate prices and even commodities prices like gold and silver. As a result, financial planners and investors must be proactive in planning for changes during the 4 stages of the business cycle.

The American Economy is in a Down Cycle in 2020

In 2020, the economy is passing through a down cycle. We are probably somewhere between contraction and trough in the 4 stages of the business cycle. As a result, unemployment is high, it is becoming more difficult to borrow money and yet the stock market is at an all-time high. Money managers have to make tough decisions about re-balancing portfolios with stocks, bonds, precious metals and even cryptocurrencies.

stages of the business cycle

What You Can Do to Thrive and Protect Yourself

The Secret to Winning in the 4 Stages of the Business Cycle: Budget, Save Money & Invest

When life is cyclical, it simply means things go up and then they go back down. The pattern repeats itself in a cycle that goes on forever. Moreover, in the natural world, animals are aware of the cycle of the seasons. For example, squirrels have the natural instinct to bury acorns during the summer and build their nests to prepare for the bitter cold of winter.

In many ways, the 4 stages of the business cycle operate much like that in the animal kingdom. Although humans no longer depend on instinct to survive, we can still use our higher brain function to make decisions. If we know that the economic cycle goes up and down, then sometimes we will have more money and other times we may have less money. Following this logic, it makes sense for us to save money during the times that we have more money. When we learn ways to save money on a tight budget, we are better prepared to weather the storm of bitter economic times.

Write Down Your Goals

If you want to be retired, living on a beach in Costa Rica in 20 years, then you need to write that down as part of your goals. We recommend creating a notebook, journal or even a spreadsheet where you list exactly what you have planned for the future. This serves two purposes. Writing down your goals makes what you want explicitly clear. It gives you a starting point and also provides you with the details that you will need to determine how you will reach your goals.

The second purpose of planning out your financial goals on paper (or electronically) is that you are signaling to the universe what you want. History has proven that the psychology of desire and intention is a powerful tool in accomplishing goals. Understanding the 4 stages of the business cycle can help you achieve your financial goals as well.

Review Your Goals Regularly

Once you’ve written down what you plan to accomplish through your goals, you should return to the goals frequently to review them. Some people even find it helpful to place a copy of the written goals in a location near them where they see the goals daily, like on your bathroom mirror or near your workspace. It can also be helpful to visualize your goals through imagery. Is one of your goals to own a beach house? Place a picture of the beach house that you want on your wall. Again, the power of intention is great and tends to help you focus your energy on exactly what you want.

Create a Budget

Now that you have established your goals, it’s time to create a budget. Budgeting requires a great deal of self-discipline, so if you don’t follow your budget, then it can wreck your plans! When you create a budget, start by writing down in detail what your expenses are each month. Spreadsheets are great for budgeting, but not required. There are also budgeting apps to choose from that can be helpful. For now, you need to know where you spend your money. Provide as much detail as possible when listing your expenses. You may find it helpful to review past bank statements and receipts.

Once you have an idea of where you spend your money each month, it’s time to take a hard look at your budget and cut some expenses. Many people find making cuts to spending a difficult task. But making cuts now will help you reach your financial goals quicker.

Living Below Your Means

After cutting your expenses down to the bear minimum, you should be living below your means (hopefully). Unfortunately, living below your means is a philosophy that most people don’t follow these days. Living below your means requires that you spend less than what you make. For example, if your take home pay is $1,500 per month, then living below your means is only spending $1,000 per month.

The extra money that you have from living below your means will serve two purposes. At first the extra money will be used to pay down debts quickly. Getting ahead requires that all debt be paid off first. Secondly, after the debt has been paid off, you will then use the positive cash flow to fund your emergency fund, savings and investments. Each of these is part of your net worth and the buffer between you and poverty. The more you can grow your savings and investment, the simpler and easier life gets.

Pay Off All Debts

Before you can start saving money, you must pay off all debts. Now that you’ve established your budget, cut personal spending to the bare minimum. You will take extra money that you have leftover in your budget and use it to pay down debts. Create a list or accounting of your debts, the corresponding balances and interest rates that you maintain. Use this information to help you keep track of your progress as you pay down debts.

If you are young and just starting out, hopefully your debts are minimal. Having minimal or no debt when you begin your journey toward wealth creation is a huge advantage. Paying off debt can take years and a great deal of sacrifice. So, if you have little or no debt, congratulations! For the rest of us, it’s time to get to work paying off debt.  

The Shocking Truth About Saving Money

According to a December 2019 article by GoBankingRates, approximately 70% of Americans have less than $1,000 in savings!

This is a shocking statistic that shows how access to credit cards and lending have dominated our society. Unfortunately, Americans have adopted the idea that borrowing money for most things is normal. Yet, just a few generations ago in the early 20th century, people learned the hard way during the Great Depression that borrowing can lead to financial ruin. Having no savings puts you in a dangerous financial place.

Make Saving a Habit

Saving is a habit that can be learned over time and simply requires discipline. Become determined to reach your financial goals. Your personal determination to win at the money game will help you develop the discipline to save.

In addition, develop good habits of saving money. In the classic personal finance book, “The Richest Man in Babylon” by George Clason, the author implores the reader to set aside at least 10% of your earnings. This is a great rule of thumb for saving and investing because removing only a fraction of your income each month will likely not even be noticed or missed. Yet, this small amount of money is the seed needed to grow wealth.

Create an Emergency Fund

The first thing to do when you have paid off debt is to start saving for an emergency. Many people think that saving for an emergency is not necessary, until life proves them wrong and an unexpected event happens. Unfortunately, we all have emergencies during life: job loss, medical issues, natural disasters, home repairs, car problems, etc. Life is expensive and it pays to be prepared.

At a minimum, you want to have at least $1,000 in your emergency fund. In reality, your emergency fund should cover 3-6 months of expenses. For most people this number should probably be between $5,000 – $20,000. Keep in mind that in the worst case scenario you want to be able to pay all your bills and eat for 3-6 months, in the event that you lose your job.

Invest 10-15% of Income

Once you’ve fully funded your emergency fund, you can start investing. And if you have made it this far, then congratulations! You are ahead of the pack and well on your way to wealth building.

As stated previously, we recommend that you invest 10-15% of your income monthly. The earlier that you get started saving and investing, the better off you will be in the long run. In fact, the most powerful tool that will be working for you during investing is compounding interest, and it works like magic. How do you turn $1,000 into $62,000? The answer may be simpler than you think.

Wrap Up: the 4 Stages of the Business Cycle

As you can see, understanding the 4 stages of the business cycle is critical in understanding how investing works. Knowing the parts of the business cycle makes investing and managing money clearer and reduces the chances that you lose money over time.

Read more:

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10 Things to Know Before Starting a Budget

Best Investing Books of All Time

How to Become a Millionaire from Nothing

Questions to Ask a Financial Advisor

Why Saving Money is Important

The Best Budget App

US Dollar History: How the Dollar Became the World Reserve Currency

How Much Savings You Should Have at 40

Ways to Save Money on a Tight Budget

Real Estate Market Predictions

Options Trading for Dummies


It is important to note that Piggy Bank Coins does not provide financial advice. We don’t endorse or recommend any financial investments. Instead, we provide information for educational purposes to those seeking knowledge regarding personal finance. However, in the spirit of transparency, note that the author is an investor in cryptocurrencies, precious metals and some equities.

In addition, The Federal Trade Commission (FTC) requires that Piggy Bank Coins disclose to readers that we may receive commissions when you click our links and make purchases. However, this does not impact our reviews and comparisons. Moreover, we try our best to keep things fair and balanced, to help you make the best choice for you.