8 Ways Ordinary Individuals Become Self-made Millionaires with Tom Corley

0:01Boom! Shake the room, Fire Nation. JLD here and welcome to Entrepreneurs on Fire, the only daily show interviewing the world's top entrepreneurs seven days a week. Today, we'll be breaking down eight ways ordinary individuals become self-made millionaires. To drop these value bombs, I brought to Tom Corley in the EO Fire studios. Tom is a CPA, CFP, and holds a master's degree in taxation and is a best-selling award-winning author for his Rich Habits series of books. And today, we'll talk about the four paths to wealth, good debt versus bad debt, rich habits versus poor habits, frugal spending versus cheap spending, and oh, so much more.

0:35And a big thank for sponsoring today's episode goes to Tom and our sponsors. Over 41 ,000 businesses have future proved their business with NetSuite by Oracle, the number one cloud ERP, bringing accounting, financial management, inventory, and HR into one platform. Download the CFO's guide to AI and machine learning for free at netsuite.com slash fire. Tom, say what's up to Fire Nation and share something that you believe about becoming successful that most people disagree with. Hey, Fire Nation, and thanks, John, for having me back on. I really do appreciate it. There's one thing in all of my rich habits research surrounding entrepreneurs that I found that most people disagree with me on, and unfortunately, I'm right.

1:24And it's that most people don't have the right personality to succeed as an entrepreneur. That bothers the crap out of so many people, particularly people that are coming from big corporate America, which happen to have very similar personality traits to entrepreneurs. But no, that's one that I get a lot of pushback on. Well, I can see why. But hey, sometimes the truth hurts Fire Nation, but you got to hear it. And today we're talking about the eight ways that ordinary individuals become self-made millionaires. And I want to start, Tom, by talking about the four paths to wealth. So, John, this is kind of proprietary and very unique to my research.

2:10I discovered that self-made millionaires, the ones in my study, they focused on just four different paths to building their wealth. The path number one is what I call the saver investor path. But these are the Dave Ramsey people. The path number two is the big company climber path. And they get most of their wealth from stock compensation. 18 % in my study were big company climbers. 49 % were saver investors. Path number three is the virtuoso path. These are like the Tiger Woods. And that's a skill base. And then the knowledge base would be Einstein, something like that. There were only 7 % in my study were virtuosos.

2:52And then the path number four is the dreamer entrepreneur path. This is the path that's near and dear to my heart because I'm an entrepreneur. It was the hardest, but shortest and most lucrative path to wealth. 51 % in my rich habits study were entrepreneurs. And they accumulated in just 12 years, about$7.5 million. Wow. So we're talking saver investor, big company climber, virtuoso, and then the dreamer entrepreneurs. And I can tell you right now, you, Tom, today with Fire Nation are speaking to the dreamer, the entrepreneurs right now. These are people that are looking to solve problems, to create ideas, products, and services to make this world a better place.

3:35So if you had to say just one thing before we move on about these four paths to wealth, what would it be? I would say this. Each path has its own unique personality profile. So for example, John, if you're a saver investor and you, for whatever reason, decide, hey, I'm going to become an entrepreneur. If you have the personality profile of a saver investor, you will 100 % fail as an entrepreneur. And if you're an entrepreneur and you say, hey, you know what, I'm going to go and climb the corporate ladder. You will 100 % fail climbing the corporate ladder because the one thing that differentiates the big company climbers and the entrepreneurs is that entrepreneurs cannot stand office politics.

4:22That was 100 % my experience. I was in the army for eight years and experienced that. And it was some good lessons learned. Then I went into corporate America with John Hancock. And I just saw that corporate ladder, the climb that these people took. And I can so clearly remember sitting in my boss's office one day as he was talking to me about like what he's foresaw his future for me. And I was like, I despise that future. I want nothing to do with that. And there was nothing against him. It was just against what it represented because I just, I could not get excited about that. And of course, I was out the door not too long afterwards, just pursuing the dreams.

4:57And now speaking of dreams, what is the dream setting process? So dream setting, this is such a cool, fun exercise. It's something I stumbled across from a couple of the self-made millionaires in my study who kept harping on the fact that if you want to become wealthy, you have to have a clear vision of who you want to be or what you want to have. So there's four steps to the process. really step one is is a 500 word script you go out 10 years 20 years into the future like you're writing in your journal today but pretend it's 10 years out into the future and then just describe your ideal perfect future life describe everything about it you know what you do for a living how much you make how much wealth you've accumulated your home vacations and all that stuff and then the second part of this script is describe what you did over the last 10 years to get there and And this is an important one because this describes the journey and it creates a blueprint or a GPS for what you need to do.

5:56It gets your subconscious mind going and the subconscious goes to work while you're sleeping, while you're taking a shower. And it says, hey, you need to do this. You need to do that. You got to pivot if you want to have this dream life of yours. So that's step one, create the script. Step two is then you bullet point each item that represents a dream in your script. Like if you say, like for me, I always had a picture of a house down by the shore in New Jersey. That was on my wall for about 10 years. And four years ago, I moved into a house down by the shore with the Irish pub that I wanted in my backyard.

6:32And so you have to have a very clear vision of all of the dreams that make up your ideal future life. So you just bullet point them from your script. The third step is now you've got to create goals around each dream. You see, the dream is the big picture. The goals are actually your construction crew. They're the action steps you need to take in order to make each dream come alive and be realized. So think about one dream having maybe four or five goals that you've got to achieve, and that's a rung on the ladder. And every time you accomplish the goals and realize a dream, you climb that ladder until you reach the top of the ladder and you're living the life of your dreams.

7:13And so that's the step four is just pursue those dreams and those goals and the goals behind the dream, one dream at a time. Fire Nation, I hope you were kind of mentally going through that process for yourself as Tom was talking. And of course, you want to go and do that the right way afterwards, but such a powerful exercise. Now, Tom, there's good debts, there's bad debts. There are people that believe completely the opposite ends of the spectrum on what good debt is and what bad debt is. And of course, you can just go on YouTube and find a million pros and cons of all kinds of debts. But I want to hear your version of this.

7:46What is your belief when it comes to good debt versus bad debt? Yeah. So I'm a big believer in debt because I'm an entrepreneur. Good debt is debt that creates an asset that generates income. And included as subcategories of this good debt would be college debt, and it's good debt because, but only if it creates some marketable skill that you can take with you when you graduate. Home mortgage is a good debt because the home is an asset and it grows. It doesn't create income on an annual basis, but it does create gains down the road. Debt used to fund a business is always good debt because businesses create, the goal is to create some cash flow and debt used to make you a virtuoso or better at whatever it is you do.

8:39This includes like coaches. I've had like a dozen coaches over the last 20 years. I've hired them and it's good money well spent. So you want to become a virtuoso. It's going to require debt. Sometimes you have to go to get your PhD, graduate school. I did that. You know, all of these things that make up good debt are things that create an asset. Bad debt is debt that is used to finance your standard of living or somebody else's standard of living. I grew up poor, and when anybody in a poor family, anybody who's poor knows this, whenever you make money, you become the banker of the family. So when you're funding somebody else's standard of living using credit card debt, that's bad debt.

9:25Home equity lines of credit, they're generally bad debt if the funds are not used in a way that improves your home or helps create an asset that generates income. And sometimes business bad could be bad debt. If you're using the debt like lines of credit to fund losses, when you have a business loss, that means your business model is broken. You've got to fix it. The processes that you're following aren't working. So a lot of companies, I see this, they build up this line of credit over 20 years and next thing you know, over 10 years. And the next thing you know, the bank is terming their line of credit.

10:05And so that would be a bad debt. Fire Nation, a lot of good things here. I wanna actually talk about the good debt side before we move on. Something that Tom said that I loved is good debt is an asset that generates income. So think about that. You can look at any potential debt you're about to take on and say, hey, is this going to generate income? If the answer is yes, then it's potentially good debt. If it's no, then you've got to think about that twice. But now the other thing that he shared, which I loved, is debt used to become a successful virtuoso slash, in my opinion, I'm going to put in the word here as well, entrepreneur.

10:39Because I went back to my early days and I said, man, I had to go into debt. I had to sit there back in 2012 and say, I believe in this podcast. I know that I can launch the first daily show interviewing the world's most successful entrepreneurs, but I don't have any equipment. I got to buy the equipment. I don't have the knowledge. I hired a mentor. I don't have the community, the support. I joined a very expensive mastermind. I went into debt for those things because what I wanted to do was give myself the absolute best chance to succeed as an entrepreneur. Could I have failed? Absolutely. But I would have failed knowing I gave myself the best chance to succeed and that debt in my mind would have still been really great debt because I was giving myself a chance to create something special, which of course I worked my little booty off and Entrepreneur's on Fire still here 12 years later, 4 ,500 episodes later, loving life.

11:33So think about that when you're going through your life because man, every dollar that you spend that's towards bad debt, it is so painful in the longterm. It's almost unspeakable. And we have so much more to talk about when we get back from thanking our sponsors. It would be really nice if we could predict what the future holds for our business. Talk about saving a lot of time and frustration, but predictions are just that, predictions. Rates will rise or fall, inflation's up or down. Can someone please invent a crystal ball? Until we can actually see into the future, over 41 ,000 businesses have future-proofed their business with NetSuite by Oracle, the number one cloud ERP, bringing accounting, financial management, inventory, and HR into one fluid platform.

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12:48netsuite.com slash fire. The job market is constantly fluctuating. Did you know that according to a recent ZipRecruiter survey, 76 % of employers plan to expand headcount for 2025? That's great news. And it's also a lot of time that will be spent hiring. If you're one of these employers who's ramping up hiring this year, don't miss out on this advice. Add ZipRecruiter's latest feature, ZipIntro, to your hiring plan. It lets you post jobs today and talk to qualified candidates tomorrow. Best of all, it does most of the work for you, so you save time. And right now, you can try ZipIntro for free at ZipRecruiter.com.

13:26ZipIntro gives you the power to quickly assess excellent candidates for your job. Jump on back-to-back video calls quickly to determine who is the best fit. All you have to do is pick a time, and ZipIntro does all the work of finding and scheduling qualified candidates for you. Save time hiring for 2025 with new Zip Intro. Just go to ziprecruiter.com slash fire right now to try Zip Intro for free. Again, that's ziprecruiter.com slash fire. Zip Intro. Post jobs today. Talk to qualified candidates tomorrow. Tom, there are rich habits and there are poor habits. Break down both of these for us. Yeah, so this is probably what got me most well-known is the rich habits versus the poor habits and the data behind it.

14:11What I found in my research, which is proprietary and unique, I think, I haven't really seen this articulated in the media anywhere else until I started talking about it, is the difference between the daily habits of the rich and the poor. I'm telling you, John, it's as wide as the Grand Canyon. And that shocked me because I grew up poor and I had a lot of these bad habits. So let's just go through a few of them. A rich habit would be I make time to exercise every day. A poor habit is I really exercise. A good habit would be a rich habit would be I maintain a daily to do list. And a poor habit would be you don't.

14:48And here's one that that was very popular and got me in a little bit of trouble on CNN is I said, you know, poor people have a habit of gossiping too much. Rich, rich people have a rich habit where they if they do gossip, it's only saying positive, upbeat things. So as a general rule, rich people don't gossip negatively and poor people do. The other thing I found is rich people build relationships. I like to call them power relationships with other successful people. They're relationship builders. And I like to say that relationships are the currency of the wealthy. It's the true currency of the wealthy.

15:29Well, poor people, they don't build relationships like the rich people do. They only call upon their relationships when they have a need. You know, they might not talk to somebody for a year and they say, hey, I need some money. The other thing is a positive mental outlook. Like, boy, I never knew I had such a negative outlook towards wealth and towards rich people growing up poor until I started doing my rich habits study. And so now I have this I use gratitude every day to keep my my mindset positive and upbeat and optimistic. I'm grateful for everything that I have, even the stupid car that I have that that I just love.

16:12it's it's not a big deal but it's it gets me from point a to point b and i love it so i express gratitude every day for that car and now the rich the poor people i found in my study they had this negative pessimistic outlook and quite frankly john you couldn't blame them i mean their life sucked they felt hopeless so but i you know i looked at it i said well you've got to change your mindset because in my study almost 90 of the successful entrepreneurs had a positive upbeat mindset. And that's, that's critical because you're trying to solve so many problems, John, when you're an entrepreneur, every day is adversity day.

16:49It's not once a week or it's not, you know, once a month, it's every single day you're trying to solve some problem and pivot. And I, and I found that the, the entrepreneurs, because of their positive mental outlook, they looked at and they said, this isn't a problem I can't solve. I, I will solve this problem. And by the way, there's probably something that I'm going to learn from this, and that's going to be an opportunity. Here's one that's very important. You have to control your thoughts and your emotions. You know, you can't just, a thought can't just come into your head and out your mouth.

17:22I found that the 88 % of the wealthy people in my study vetted their thoughts before anything came out of their mouth. They were very cautious about how they communicated to people because they're trying to build these relationships. And you spend five years building relationship with someone like John Lee Dumas. And then you go off and say something stupid, and you just destroy that relationship. I found that the poor people in my study, they just, they allowed their emotions and their feelings to dictate, you know, their life. They, it was just, they were in total control of their lives. So those are, you know, some of the things, There's many more.

18:02I have 366 of these habit data points in my rich habits study that I summarized into something called the rich habits summary. So if any of your subscribers or listeners want it, just shoot me an email. I'll get it right out to you. Oh, we will definitely get that contact information. So stick around Fire Nation. A couple of things. Warren Buffett's famous to say it takes 20 years to build your reputation and five minutes to ruin it. So make sure that everything you do is to build a positive reputation and nothing is worth ruining it for anything. And going back to what you were sharing earlier, Tom, about the gossip.

18:41I mean, that's why I literally end every single episode of Entrepreneurs on Fire with a Jim Rohn quote. You're the average of the five people you spend the most time with. You spend time with gossipers, you're not going to be successful because they're wasting their time. They're whining, they're complaining, they're pessimistic attitudes. Walk away. You need to surround yourself with the right people. And who are you surrounding yourself right now with? Tom and JLD here. So you've already got two great people of your five, Fire Nation. So keep up the flipping heat. And I want to end by talking about some of the top poor spending habits.

19:12Take it away. Yeah. So there's, I found in my research is primarily for what I call poor spending habits. The first one is want spending. This is when, you know, your neighbor puts in a pool and you and then your spouse says, I want a pool. That's want spending. How many of us who are married have been through that? Number two is spontaneous or emotional spending. Now, spontaneous spending is different from emotional spending in the sense that like spontaneous spending is something that's done after you have depleted your willpower, like shopping at a grocery store and then you're done and you get to this the reason why they have all this candy and junk food at the counter when you're checking out uh you know they want you they know that your your willpower has been depleted and so you're gonna spontaneously buy something emotional spending is something that you just get caught up with now my my i have a sister-in-law who you who had the bad habit of love to watch these tv shows where you could buy stuff on like she got into a little bit of trouble her husband had to shut her down but she got into like the emotional spending right it's uh you know another thing is you can walk into a car dealership i'm going in to get a a you know a a 25 30 000 car and i walk out with an 80 000 that's emotional spending you know uh the third one is supersizing your life spending this is uh conor mcgregor i saw him do this after he he had a fight back in i think it was 2018 remember of that fight with the boxer legendary yeah oh my god what a great fight and anyway he got a guarantee of 30 million dollars and you know he lives in ireland they have like a 55 percent income tax rate one of the first things he did was he bought a 17 million dollar yacht john and i said oh my god he's he's violating you know the number three poor spending habits supersizing your life.

21:05The last one is lifestyle creep. And this is something that a lot of us in the middle class are victims of. We, you know, we don't necessarily supersize our life immediately, but lifestyle creep is building, you know, increasing your standard of living and therefore your cost of living, you know, every year at a time. Oh, let's get this. Let's get a boat. Let's buy a, you know, an RV, a small RV. Let's, you know, you just start spending money incrementally. And when you look at it over the course of your lifetime, it's, it actually pushes up your cost of living, you know, twofold or threefold.

21:47And, and guess what? I can't retire. And one thing that you start to realize fire nation, when you start generating disposable income and a lot of revenue is that money makes money. Like investments that I've made sometimes far outweigh the revenue that I generate from year to year. I mean, sometimes in a couple of days, I'm like, wow, that was a huge investment. That was a huge return. And of course it can go the other way with investments as well, but money makes money when you're investing it in the right ways and for the longterm as well. So Tom, you had mentioned that you were going to give Fire Nation a way to contact you via email, any other call to action that you have for Fire Nation.

22:25And when they do contact you, what are they going to get? I'll send them my research summary, which is, I'm telling you, I must have gotten a million requests for it because it's not just in the United States, all over the place. So people love the research summary because it breaks down the habits between the rich, poor. And also I broke down the rich to self-made rich because some people inherit well. So you want to see, you really, what you want to focus on is the self-made rich. And I have my rich habits, which is giving me the limited notoriety that I do have. We just came out. Entrepreneur Magazine has a sister company, Entrepreneur Press, coming out with an expanded version of rich habits.

23:05It's awesome. It's my opus. It's my to me. It's what I've been waiting for my whole life to create. So so I'm very happy about that. And the last thing I'll say is if you want to. I write almost every day and my articles are always tied to my research. And there are things that relate to entrepreneurs, a lot of it, because I'm an entrepreneur. So, you know, I'm just kind of obsessed with it. So richhabits.net, you can go there. And if you want to subscribe to the website, fine. This doesn't, no charge. And I'm not interested in making money. So I don't have any advertising on it. And now you did say your email.

23:39Are you going to share that? Tom at richhabits.net. Wow. Well, I can tell you, Fire Nation, that's the email that I communicate with him on. So it's legit. It's going to Tom. Tom, I actually just sent you an email. You can check your inbox requesting that because you need that information, Fire Nation. You need that intel in your brain. When somebody like this offers to send you something, to reply to you with something, take advantage of it. So one more time, what was that email, Tom? Tom at richhabits.net. Fire Nation, you're the average of the five people you spend the most time with. You've been hanging out with TC and JLD today, so keep up the heat.

24:13And for links to everything we talked about, visit eofire.com, type Tom, T-O-M, in the search bar and the show notes page will pop right up. And Tom, I want to say thank you, brother, for sharing your truth, your knowledge, your value with Fire Nation. For that, we salute you and we'll catch you on the flip side. Thank you, John. Hey, Fire Nation, a huge thank you to our sponsors and Tom for sponsoring today's episode. And Fire Nation, over the last decade, I've interviewed more than 4 ,000 of the world's most successful entrepreneurs and I've created a revolutionary 17-step roadmap to your financial freedom and fulfillment.

24:45I put it all into my first traditionally published book, The Common Path to Uncommon Success, personally endorsed by Seth Godin and Gary Vaynerchuk. The Common Path to Uncommon Success is the step-by-step guidance that you need to achieve the lifestyle of your dreams. Visit UncommonSuccessBook.com. I'll catch you there or on the flippity-flip side. Over 41 ,000 businesses have future-proofed their business with NetSuite by Oracle, the number one cloud ERP, bringing accounting, financial management, inventory, and HR into one platform. Download the CFO's Guide to AI and Machine Learning for free at netsuite.com slash fire.