We all make mistakes, yet there are a few bad habits the super-rich tend to avoid. Here are five money missteps that may be keeping you from getting rich.
1. Doing it yourself
When the stock market drops — as we saw in December, when major indexes all dropped at least 8.7% — you have to know what you are doing or you can get burned. If you don't have time to spend a few hours a day tracking the market, the cost of a good financial advisor is well worth the investment.
Ivory Johnson, founder of Delancey Wealth Management in Washington, D.C., said most wealthy people don't try to manage their money themselves — they hire financial planners, CPAs and attorneys to protect their assets and reduce their risks.
And when are risks the highest? When markets start taking investors on a roller-coaster ride.
"When investors are stressed, the odds of making a bad decision increase," he said. "Wealthy people mitigate that stress by having good advisors."
While some may balk at paying a fee, the returns on that money will, most years, be well above that amount. During the bad years, your advisor can help you mitigate your losses to preserve your wealth for the long haul.
2. Not diversifying
The average investor may have stocks and bonds in their 401(k) savings or investment portfolio. The rich branch out and diversify.
Remember Enron? Many employees of the energy giant bought into the company's sales pitch so much that they put all of their retirement savings in its stock. And when the firm went belly up — so did all of their savings.
In addition to stocks and bonds, the ultra-wealthy invest in things such as real estate, limited partnerships and private markets, according to Tom Corley, author of personal finance tomes such as "Rich Habits." That way, if stocks, for example, are having a really bad year, you may make up the difference with a good year in real estate or vice versa.
Another appealing factor that draws a lot of wealthy investors to real estate: It may provide an extra income stream. In addition to the potential appreciation of that property, if you rent it out you get an immediate source of income, which can give you a nice cushion should you lose your primary job.
And of course, you won't be as worried in a year when stocks are down.
"Most wealthy families have real estate holdings because it offers recurring revenue, tax benefits and creates equity," Johnson said. "It also puts less pressure on their stock portfolios to perform."
3. Fad investing
The ultra-wealthy don't get caught up in the latest fads, pouncing on the next "new" thing.
Take bitcoin, for example. The cryptocurrency took off in 2017, making instant millionaires out of some early investors. That spurred a lot of people to jump in and try their hand at making a fortune.
That could be fine — if you're a professional trader or just want to play around with a little gambling money. Yet fads like bitcoin are risky business: The cryptocurrency has since fallen a stomach-churning 70% in the past year.
Warren Buffett, who is famous for his philosophy of investing in what he knows and then holding on to it for the long haul, told CNBC last year that "in terms of cryptocurrencies, generally, I can say with almost certainty that they will come to a bad ending."
The legendary investor, who is worth $80 billion, according to Forbes, believes you have to know what you know — and stay the course.
"What counts is having a philosophy ... that you stick with, that you understand why you're in it, and then you forget about doing things that you don't know how to do," Buffett said at the Berkshire Hathaway annual meeting in 2018.
Those who are caught up in the "follow the herd" mentality may do so because they are focusing on "one thing they think can make them rich overnight," said Johnson at Delancey Wealth Management. "It doesn't work."
4. Lack of a long-term plan
Wealthy investors are patient and don't necessarily think about short-term returns.
"Most people don't sit down and actually plan out how they are going to invest their savings over the next 20 years," Corey said. "The wealthy do. They just don't wing it."
And it's not just about making money for themselves; it's about creating generational wealth that can benefit their grandchildren and beyond.
"Instead of buying a painting for the living room, they'll spend extra money for art that can appreciate," Johnson said. "They join clubs and organizations so the relationships they make will offset the fees, even if they don't realize it for several years.
"This demands foresight, estate planning and patience."
The volatile stock market may make you want to run for cover. Because the rich are in it for the long term, they don't tend to panic.
They also have a lot of liquidity and financial resources they can lean on when the stock market, real estate market or other investments go south, so they don't "need" to sell, Corley said.
For Johnson, it's also about the world giving us what we give out.
"Anxious investors receive anxiety, and confrontational people are always engaged in some form of conflict," he said. Meanwhile, optimistic people experience more positive outcomes.
"Over a lifetime, this becomes a habit and you'll often find that wealthy people who are happy got that way because they were optimistic, as opposed to becoming optimistic because they got wealthy," Johnson said.
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Disclosure: NBCUniversal and Comcast Ventures are investors in Acorns.