Some wealthy folks hail from a long line of aristocrats and industrial magnates. A lucky few win the lottery. But about 80% of the millionaires in America are "first generation" rich. They're the first in their families to have attained a high net worth through traditional means. How did they do it? Many of these folks developed small businesses over decades; others earned advanced degrees in demanding fields. Most followed simple principles that the rest of us can apply, including the following.

  • Avoid debt. If you can pay cash for an item, do so. Only take out loans for items that will likely generate a return on investment, like a house or an education. Paying interest leaves less money in your pocket for building wealth.
  • Invest in equities. With the volatility of the stock market in recent months, many people are pumping their money into bank accounts, certificates of deposit, and Treasury notes. If you have a long term horizon (say, five years or more until you'll need the funds), a well-diversified portfolio of stock mutual funds is still likely to be a wise choice.
  • Value education. Especially in certain professional fields (such as business, engineering, healthcare, and law), you can expect a college degree to pay off over time.
  • Live within your means. As the old saying goes, "You can't get ahead if you're always behind." Curbing your spending habits requires discipline. Watching your neighbor park his latest toy in the driveway (often purchased on the installment plan) may be irritating. But building long-term wealth isn't about keeping up with the Joneses.
  • Pay yourself first. If your company offers a 401(k) plan, contribute as much as possible directly from your paycheck. If you're in business for yourself or work for a company that doesn't offer a retirement plan, investigate other retirement plan options and make annual contributions.
  • Work hard. Never underestimate the value of your own labor. Life isn't always fair, and some lazy people have risen to the top. But most folks who have developed profitable businesses or found success in their professions have earned that position by focusing their energies over long periods.
  • Don't give up. Along the way, you're certain to encounter obstacles — unanticipated expenses, job losses, market setbacks, unappreciative bosses. Don't let them sidetrack you from your financial goals.
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