Rich Habits by Tom Corley

Guest: Tom Corley

What does eating less junk food and exercising have to do with being rich? Plenty says my guest Tom Corely who spent five years studying the habits of the wealthy versus those of the poor. His insights resulted in findings published in his book,  Rich Habits - The Daily Success Habits of Wealthy Individuals. Listen to his advice and see what habits you can adopt to improve your financial future! This interview aired live on July 22, 2013.

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Excerpt from this interview

Gerri: My next guest says that eating junk food can make you poor and just in your wallet. Tom Corley is a Certified Public Accountant, Certified Financial Planner and has a Masters in Taxation, and is certified by the Corporation for Long-Term Care. He's President of Cerefice & Co., a CPA firm, but more intriguingly he’s the author of a new book Rich Habits - The Daily Success Habits of Wealthy Individuals, and this book is getting a ton of attention. Dave Ramsey recently reviewed it. It's also on the Amazon bestseller list and people are snapping it up because it's got a unique approach to how to handle your finances.

So Tom, let's talk about the connection between junk food and your wallet, and were not just talking about what you spend your money on?

Tom: You're right. This is something that startled me because I have these 149 data points that I’d analyzed. They’re essentially things that wealthy people do from the minute they wake up to the minute that they go to bed. But I didn’t stop there, I also looked at what poor people do with their day and what I found out with respect to this eating is that 97% of poor people in my study ate more than 300 junk food calories each day whereas 70% of the wealthy didn’t. That was one thing.

The other thing we found that 76% of the wealthy individuals exercise aerobically at least four days a week versus 23% for the poor. Some of your listeners might be thinking what does this have to do with making money, being successful and wealthy? But to wealthy people, health is everything. If they’re healthy, they can work. They have more energy. They work longer hours. They have fewer sick days, it increases productivity and it’s a lot driven by their desire to to be successful.

Gerri: So Tom, you're talking about the research that went into your book, Rich Habits. Just back up and tell us a little bit what kind of research you did to get this information?

Tom: For over a five-year period, I interviewed 233 wealthy individuals and 128 poor individuals. I then took this data which encompassed about 150 activities and then I analyzed it. What I found Gerri was that there was a difference a lot like the size of the Grand Canyon between the daily activities of the wealthy and the daily activities of poor people. And it was an epiphany for me, I realized I had stumbled onto something.

Gerri: Tom, I’m sure education has to be a portion of this and your education is amazing because you’ve passed three very, very difficult tests to get the certifications that you have. Did you look at education? Did that tie into your research?

Tom: Yes. It was a big deal. In fact, one of the stats that I tracked which is really an eye-opener, it's something I stumbled into was that wealthy people, 88% read 30 minutes or more each day for education or for career-related reasons versus 2% for poor people. I even dug a little deeper. I found that 76% of the wealthy read two or more education-related, self-help related books and the poor didn’t. So there's a lot of this emphasis on education, and reading, and self-improvement, improving the vocabulary. It goes on and on, Gerri.

Gerri: So what if you're in the group that you're not wealthy right now? Obviously, you have a bunch of different habits that you've identified and it may feel overwhelming to try to start and change a bunch of habits at once. What would you start with?

Tom: This is the message I want to get across to your listeners is this is not that difficult. It may only take two or three habits that you have to change to get that teeter-tottered of life tipped towards the direction of wealth. Wealthy people have more than 50% of their daily habits are rich habits. Poor people, more than 50% of their habits are poverty habits. And so if you can get one or two or three habits changed and transformed into rich habits from poverty habits, it takes time but it does work. I'm living proof of it and I have three or four other stories of individuals who are going through the same thing that I'm going through.

The first rich habit, I call it the reinvention habit, Gerri. It’s basically, you take a pad of paper and on two columns. The first column is you list, be brutally honest with yourself, you list your bad habits, you’re bad daily habits. And then I showed in the book how you can convert those bad daily habits into rich habits.

Like for example, I smoke cigarettes is a bad habit. Your new rich habit would be I did not smoke a cigarette today. And so you can go through all your poverty habits and that's rich habit number on is the reinvention habit, it shows you how to do that. Then these new daily habits, these new good rich habits, you just track them everyday. Try and follow as many of them as you can and over time you will see that things just start to happen in your life. You see opportunities you didn’t  see before. I call it creating opportunity luck.

And the other thing that I like about the rich habits is it not only creates opportunity luck or this process of studying your bad habits and converting them to rich habits but it also gets rid of something that I call detrimental luck. You get rid of some of this detrimental bad luck like if you have bad habits you for example eat too much, don’t exercise, that can manifest itself years down the road in the form of diabetes or a heart disease. And so if you exercise properly you eliminate or minimize that risk of poor health. So you get rid of some of the detrimental luck and you also build some opportunity luck along the way.

Gerri: Tom, in your research did you take a look at how people actually can adopt new habits? There's this saying that you have to do something for 21 days or maybe 30 days, do you have any sense of what it takes to really change somebody's habits?

Tom: It's a good point to bring up because habits which I’ve studied, I had no choice, I had to understand habit formation and how to break a habit, and how that works. There’s a great book called The Habit Loop that talks about this. 40% of our activities every single day are habits so 40% of the time Gerri, we’re on autopilot. And if you have good daily success habits which you probably were taught by your parents, seems to be the predominant way you learn these habits, if you have more than 50% of these rich habits, 40% of the time while you’re on autopilot your life is successful.

And that’s why some people who are rich sometimes they call it the secret to success, it’s a secret even to rich people because they don’t realize that these habits, these specific habits that I talk about in my book that are responsible for your success. 40% of the time if you have poverty habits, you’re scratching your head and you’re wondering why am I doing so badly in life? So I teach with the book reinvention habit is a 30-day process of finding out what it is that you’re doing wrong, creating  your new good daily habits, your new rich habits, and then just following them for the first 30 days.

What will happen? What every reader has been telling me is that the first thing that happens is a mindset change. It's almost as if they feel like they're being pulled out of the abyss and they start thinking differently. They become a little bit more optimistic. They feel better about themselves which is like a domino effect so it's just one good thing after another and then it perpetuates over time, and eventually you have this avalanche of success event. It might be a bonus, a raise. It might be a new job, a promotion, any number of things that happens. It might take six months, it might take a year, it might take two years. But it happens.

Gerri: It’s interesting because one of my guests recently, she had dug out of I want to say over $20,000 maybe $30,000 in debt and she said what happened the month before she made her commitment to get out of debt was she started to floss her teeth everyday. That’s just a good habit but it got her into the mindset of setting new habits and that’s what was able to prompt her into this new habit that helped her get out of a lot of debt. So it’s interesting how these habits can tie into that.

Tom, you claim in your book that wealthy people achieve nearly 100% of their goals which is a pretty good batting average and you say it's because they know the secret of goal setting strategies. Can you give us a couple of strategies?

Tom: Gerri you have to remember I was doing this research, I finished it up in 2008 and I started analyzing it. And so at that time, I was about 47 years of age. At 47, I learned that I didn’t know the definition of a goal because from my research I found out that to wealthy people, a goal is only a goal when it has two things. One is 100% achievability and two, it has to have some physical activity.

Now an example of this is and I quote the “artichoke strategy.” You start out with a wish which we've been taught is a goal. For example, in one of my seminars a very successful insurance agent was trying to achieve a goal of an additional 100,000 in life insurance commissions. He had failed for four years in a row so he came to my seminar because it was on goal-setting and he was just hoping someone would have something different.

In the seminar, I talk about the difference, that a wish is not a goal and a goal is not a wish. And so he came up to me after and hes said I’ve been failing at this goal-setting and now I realize I’ve been making a wish and not setting a goal. What we did is we spent about an hour and I took the artichoke, his wish, I peeled the leaves apart and we got down to the goal which was making an additional ten telemarketing phone calls a day. That's what I told him he needed to do.

He went out and did that, in fact he had such a success in the early going that he increased it to twenty and then to thirty, and in the first six months he blew past his 100,000. And by the year end, he was past 200,000 but the more important thing is he had enough business in his pipeline for the next year so he stopped doing the telemarketing phone calls. Then he called me to tell me I can’t believe how this works. You’ve got to write a book about this. And so he’s one of the reasons I wrote Rich Habits.

Gerri: And here we are with a terrific new book, Rich Habits by Tom Corley.

About My Guest

Tom Corley understands the difference between being rich and poor. At age 9, his family went from being multi-millionaires to broke in just one night.

For five years, Tom studied the daily activities of 233 wealthy people and 128 people living in poverty. He discovered there is a difference the size of the Grand Canyon between the daily habits of the wealthy and the poor.

During his research he identified over 200 daily activities that separated the “haves” from the “have nots.” The culmination of his research can be found in his #1 bestselling book, Rich Habits – The Daily Success Habits of Wealthy Individuals.

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