PDF Summary:Million Dollar Habits, by Brian Tracy

Do you want to achieve greater personal and professional success? In Million Dollar Habits, entrepreneur and motivational speaker Brian Tracy outlines proven strategies and habits that can propel you toward your goals. Whether you're seeking financial independence, a more rewarding career, or a heightened sense of well-being, Tracy's insights offer a clear roadmap to amplify your influence and impact.

In this guide, we’ll explore how a positive mindset and self-concept promote success. We’ll also discuss the role of good habits in building a successful life. Finally, we’ll dive into Tracy’s specific advice for achieving financial and personal success. In our commentary, we’ll look at other perspectives on what it means to be successful and delve deeper into the psychology behind habits.

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Tracy says another habit you should adopt is automatically saving 10% of your income. When you save automatically, you never have to factor that portion of your income into your lifestyle, so you learn to live within the other 90%. You can think of it as money you’re paying to a future you. Put this into action by setting up automatic transfers from your checking account into a dedicated savings account each payday. Treat this like another monthly bill you must pay.

If 10% of your current income feels like too much, consider saving 50% of any future income increases you receive. This gradually increases your savings rate without disrupting your current lifestyle—it’s easier psychologically to devote money you don’t have yet to savings, instead of taking a portion of what you already use. Implement this by calculating 50% of any raises or windfalls and immediately directing that amount into savings or investments.

(Shortform note: While saving 10% of your income is good financial advice, it’s not feasible for many low-income people (who would, in theory, benefit the most from such advice). In Evicted, sociologist Matthew Desmond explains that, to be financially secure, a family’s rent should be no more than 30% of their income. However, low-income families—at least in the US, where Desmond lives and works—often have to spend anywhere from 50% to 70% of their income on rent alone. This mismatch between income and cost of living makes it impossible to save money. Furthermore, people in that situation often aren’t able to accept raises because more income could cause them to lose their welfare benefits and end up in an even worse financial situation than before.)

Tracy adds that carefully considering your investment decisions is also paramount; good investments will grow your wealth year after year, but poor investments can quickly deplete it instead. Thoroughly research potential investments and consult successful investors for advice before committing money.

Finally, having proper insurance coverage is an additional expense, but a crucial one. Insurance safeguards your finances against catastrophic events that could otherwise wipe out your savings. Therefore, Tracy recommends protecting yourself and your family by obtaining appropriate insurance policies for your home, health, vehicles, and any other major assets or liabilities you have.

(Shortform note: In Antifragile, risk analyst Nassim Nicholas Taleb suggests a different approach to protecting and growing your wealth, which he calls the barbell model. Using this approach, you would keep most of your wealth (say, 90% of it) safe in a savings account and protected by insurance. Then, with the majority of your wealth secure, you’d use the rest for high-risk, high-return investments. The barbell model ensures that there’s a limit to how much you can lose—remember, most of your money is safely in the bank and your assets are protected by insurance—but there’s no limit to how much you can make from those volatile investments.)

Achieving Success as an Entrepreneur: Focus on the Customer

Good financial habits are crucial, but of course you need to have income before they’ll do you any good. One route to a steady income is to become an entrepreneur by starting your own business. If this is your preferred method, it’s important to first understand what makes a business successful: satisfying and retaining customers, and continuous improvement.

As a business owner or entrepreneur, Tracy says you must constantly prioritize your customers' needs. Thus, every decision you make should be evaluated through the lens of how it will impact the customer experience.

(Shortform note: Building lasting relationships with customers is crucial because a single customer can lead to many sales over time. In fact, in The Ultimate Sales Machine, marketing coach Chet Holmes says viewing each sale as a simple one-and-done transaction is one of the biggest mistakes that companies make. Instead, he suggests staying in touch with your customers and offering rewards for people who frequent your business. This way, you’re likely to get many more repeat customers—and, just as importantly, people are likely to remember you and recommend you to their friends.)

However, it’s not enough to just offer a great customer experience. Tracy also says you must convince people that your products or services provide more value than what your competitors can offer—this could mean higher quality, lower prices, or both. Doing so requires constantly looking for ways to improve your products or services and enhance your marketing strategies.

Therefore, always be on the lookout for opportunities to innovate, refine your approach, and communicate your unique selling proposition more effectively. Continuous improvement is essential to stay ahead of the competition and meet evolving customer needs.

(Shortform note: Tracy says that the key to a successful product or service is to make it more valuable to customers than what your competitors offer. In Purple Cow, marketing expert Seth Godin suggests a different approach: Instead of just trying to offer a “better” product, you need to offer something remarkable that will get people talking about your business. Godin also says that making constant, incremental improvements is not an effective way to attract and retain customers. Instead, do something extreme and unusual. For example, the Tesla Cybertruck’s extraordinary design attracted a lot of attention—not all of it was positive, but even scorn is better for business than being ignored.)

Habits That Promote Entrepreneurial Success

Tracy discusses several habits that will help you succeed as an entrepreneur:

1. Planning. Meticulously plan your strategy before making any big business decisions. You should be able to articulate what your product or service is, who your target audience is, how your product adds value to your customer’s life, and how you’ll offer more value than your competitors. On a smaller scale, set regular sales goals and make plans for how you’ll reach them.

(Shortform note: In Competing Against Luck, business consultant Clayton Christensen writes that the key to a successful business or product launch is to identify what specific task your customers want to accomplish. For example, elderly people often want to live as independently as possible, so one specific task they want to accomplish might be to get around more easily. Therefore, if you can sell a mobility aid that’s more effective or cheaper than what your competitors offer, your business will likely do well.)

2. Delegating. As the business owner, you should focus on only two or three core tasks that keep your company running smoothly, and delegate everything else to your employees. On that same note, make sure you don’t skimp on hiring or paying staff; your team will make or break your business, so hire the best people you can and do whatever it takes to retain them.

3. Monitoring. To ensure that the tasks you’ve delegated are being done correctly, implement systems to monitor work progress. Additionally, set clear and measurable standards to gauge how well you’re meeting your sales and performance goals.

Delegate, But Don’t Micromanage

Many experts say that, in addition to delegating tasks to your employees, you’ll get the best results if you let them handle those tasks on their own instead of micromanaging their work processes. But how do you balance employees’ autonomy with the need to monitor work progress?

In Humanocracy, business consultants Gary Hamel and Michele Zanini say that your company should promote empowerment and accountability. This means that employees are encouraged to find their own solutions to problems and their own ways to meet the goals you set. However, they must also accept the consequences of their decisions (both positive and negative). This is also why it’s important to hire the best people: You’ll need skilled and conscientious employees who won’t abuse the freedom you give them.

4. Reporting. Regularly report your results to people who have vested interests in your company—including your bank and your employees, not just shareholders—to keep everyone informed and motivated.

(Shortform note: Reporting monthly or quarterly results isn’t just informative, it can also be an opportunity to celebrate what you’ve achieved so far. In Switch, brothers Chip and Dan Heath explain that celebrating small victories along the way to a larger long-term goal is a highly effective way to stay motivated. This is because people’s emotions are generally stronger than their logic, and emotions demand instant gratification instead of sustained effort toward a distant goal. Therefore, these small victories are opportunities to satisfy that need for instant gratification and to motivate them toward the next small goal, when they’ll be able to experience that gratification again.)

Achieving Success as an Employee

Tracy writes that entrepreneurship isn’t a path that suits everyone, and he asserts that you can also achieve financial success and fulfillment by becoming the best employee you can be. If starting a business isn’t for you, instead focus your efforts on finding a job that aligns with your interests and strengths, and on excelling in that role.

The path to high earnings and a sense of fulfillment starts with finding work that you’re both skilled at and passionate about. Therefore, it’s important to take time for self-reflection, keep trying new things, and focus on activities that make you feel energized. Once you’ve figured out what you love to do, you can look for a job that lets you turn that passion into profit.

The author says that if you take this route, you should make a concerted effort to be a model employee: someone who’s hardworking, helpful, and well-liked. Be intentional about working diligently, volunteering for tasks, building positive relationships with colleagues, and consistently striving to provide value to your organization. If your job is something that you’re passionate about and good at, this should all come naturally to you.

Ikigai: Your Reason for Living

What Tracy describes here closely resembles the Japanese concept of ikigai, which roughly means reason for being. If you find your ikigai, you’ll probably also have found a job role that you can be successful in.

Your ikigai combines four elements:

1. Passion: what you love to do

2. Talent: what you’re good at

3. Purpose: what you believe the world needs

4. Profit: what people will pay you to do

One way to start looking for your ikigai is to make separate lists of activities for each of those four elements, then look for what those lists have in common. Anything that appears on all four lists is a strong candidate for your ikigai.

How to Achieve Personal Success

In addition to his advice on achieving financial success, Tracy offers habits to help you achieve your desired level of personal success. In this final section, we’ll explore how you can get the most benefit out of everything you spend your time on. We’ll also look at Tracy’s suggestions for maintaining your physical health and building strong relationships.

Get the Most Out of Everything You Do

Tracy argues that you should organize your life to maximize returns on your energy investments across all areas. Directing your efforts efficiently allows you to reap the greatest material benefits and personal satisfaction, so prioritize activities that yield high returns, and minimize the effort you spend on low-impact tasks.

Tip: Apply the 80/20 Rule

To maximize the results you get from your efforts, as Tracy says, it’s only logical to spend your energy on tasks that produce the biggest positive impacts on your life. Furthermore, there may be fewer of those high-impact tasks than you think.

The 80/20 rule, also known as the Pareto Principle, suggests that roughly 80% of the outcomes you get come from just 20% of what you do. This principle applies across various fields, from economics to personal productivity. For instance, in business, it might mean that 80% of sales come from 20% of customers, or that 20% of your products account for 80% of your profits.

To use this principle to your advantage, identify one to three tasks that have an unusually large impact on your life, and focus your efforts on those tasks as much as possible. For example, exercise might have an unusually large impact because physical fitness gives you more energy—if so, then you could redouble your efforts at the gym in order to maximize that impact.

Set Long-Term Goals to Focus Your Efforts

Having clear long-term goals enables your present actions to be focused and productive in moving you toward what you ultimately want to achieve. Spend time clarifying your biggest goals for what you want your life to look like, and revisit them regularly to stay connected to your vision.

Tracy suggests writing your goals down every day. The act of writing helps to clarify your thinking by activating multiple kinds of processing in your brain: visual, kinesthetic, and auditory. This helps to embed the ideas you’re writing deeper into your subconscious. When your goals are deep in your subconscious, you begin to think and act in ways that attract opportunities and experiences that will bring you closer to your goals.

Tip: Carefully Plan Three Levels of Goals

Regularly writing down your goals is helpful in keeping you focused, but you may find that some of your goals work against each other. For example, if one of your goals is to get enough sleep every night and another is to build your network by regularly attending business conventions and social events, you’re likely to find that it’s impossible to do both—you’ll have to either stay out late sometimes, or skip events to make sure you can get enough sleep.

In Grit, psychologist Angela Duckworth proposes a goal-setting model that helps you avoid this problem. Duckworth’s model starts with a single top-level goal, then cascades down to more specific objectives that get you closer to that goal. Here's how you can apply this approach:

When writing out your goals, start with a long-term goal like Tracy advises. This should be something significant that aligns with your values and aspirations, such as landing your dream job or setting aside enough money for your kids to go to college.

Next, establish mid-level goals that serve as stepping stones toward your long-term objective; these should be substantial milestones that keep you on track toward your main goal. For example, if your top-level goal is to set aside college money for your children, an appropriate mid-level goal might be to put $5,000 into a savings account each year for them.

Finally, create short-term, low-level goals for each of those mid-level objectives. These are specific tasks that you can work on daily, weekly, or monthly. For instance, to support a mid-level goal of setting aside $5,000 a year, a logical low-level goal would be to put $450 into that account each month—if you meet that short-term goal every month, you’ll end up surpassing your mid-level goal and be well on your way toward your ultimate long-term goal of paying for your children’s college education.

As you write down your goals each day like Tracy suggests, evaluate whether each goal supports a higher-level goal. If not, to reconsider whether that’s actually a worthwhile goal to set for yourself. For example, maybe you always wanted to write a book, but you realize that won’t get you any closer to your dream job. You can then recognize that writing a book takes an enormous amount of time and effort, which would be better spent on different mid-level goals that do support your top-level goal of getting that job.

Maintain Optimal Physical Health

Keeping your body in optimal physical health is another aspect of personal success and well-being, and the sooner you start building healthy habits, the better off you’ll be. Let’s look at three of Tracy’s tips for living a healthy life:

Tip #1: Avoid Salt, Sugar, and White Flour

Tracy argues that you should eliminate salt, sugar, and white flour from your diet as much as possible.

• Excess salt causes water retention, bloating, and potentially high blood pressure.
• Sugar spikes your blood glucose and insulin levels, leading to energy crashes.
• White flour is difficult to digest and lacks nutrients.

Avoiding these ingredients stabilizes your energy, helps to prevent diseases, and promotes healthy digestion. Swap processed snacks for fruits, vegetables, nuts, and whole grains to get the nutrients your body needs without the drawbacks.

(Shortform note: A diet rich in whole foods and low on processed salt, sugar, and flour isn’t just good for your metabolism—it's also advantageous for your oral health. In Jaws, orthodontist Sandra Kahn and biologist Paul R. Ehrlich explain that ancient humans actually had healthier mouths than modern humans do. The authors say this is because ancient humans used their teeth for rigorous tasks like tearing raw meat and grinding up uncooked vegetables. This intensive use led to the development of larger jaws and stronger teeth, which naturally protected them from many of the dental issues we face today, such as malocclusion and tooth decay. Conversely, our modern diets of soft, processed foods leave us with underdeveloped jaws and weak teeth.)

Tip #2: Get Enough Sleep

According to Tracy, you need seven to eight hours of sleep nightly for optimal cognitive and physical health. Adequate sleep makes you more productive and happier by keeping your mind clear and your body strong. When you go to sleep around 10 p.m. and wake up around 6 a.m., you also have time for relaxing morning habits like meditation and reading.

(Shortform note: One suggestion to fall asleep and stay asleep more effectively is to keep your bedroom quiet, dark, at a comfortable temperature, and free from electronic devices that keep you awake such as computers or smartphones. Experts also recommend avoiding caffeine and alcohol use close to bedtime—both chemicals disrupt your sleep cycles and are likely to prevent you from getting restful sleep. They also say you shouldn’t eat large meals late at night, as doing so can cause digestive discomfort that interferes with your sleep.)

Tip #3: Exercise Regularly

Finally, Tracy states that no list of healthy habits is complete without regular exercise—ideally at least 200 minutes weekly.

Exercise keeps your muscles and joints healthy while reducing pain and improving balance and mobility. You'll also feel more energetic in your daily life when you stick to an exercise practice. For optimal health benefits, focus in particular on aerobic activities that exercise your heart and lungs as well as your muscles.

Start Exercising Now to Stay Healthier Longer

The benefits of regular exercise are numerous and well-documented, but one of the more surprising benefits is that, to some extent, exercise directly counters the effects of aging. Furthermore, the anti-aging effects of aerobic exercise continue to work no matter how old you are. With that said, seniors may find it difficult to exercise regularly without injuring themselves, thereby doing more harm than good. To help avoid that problem, there are many exercise programs geared toward older adults, such as aquatic yoga classes.

To highlight how effectively exercise slows the aging process, studies have found that doing moderately intense exercise for 300-600 minutes per week reduces the risk of death at any particular age by about a third. In simpler terms, the more you exercise—and the sooner you start—the longer you’ll live.

Build Positive Relationships

According to Tracy, a major part of your happiness stems from your relationships with others, so developing strong relationship skills is crucial. Humans are social creatures who thrive on positive connections and a sense of belonging. When you have fulfilling relationships, you feel valued, supported, and happier overall. To apply this, nurture the important relationships in your life through caring behaviors that make others feel good.

Making others feel important and good about themselves is foundational for positive relationships because every person craves approval, respect, and encouragement. When you make people feel better about themselves, they associate those positive feelings with you and want to connect more.

(Shortform note: People are hardwired for connection and cooperation, since those were crucial survival strategies for our ancient ancestors. Because we’ve evolved to live and work together, we tend to find great satisfaction in connecting with each other. Conversely, social isolation can seriously damage our emotional, mental, and even physical well-being. To illustrate this point, psychologist Abraham Maslow’s famous Hierarchy of Needs asserts that people start seeking connection as soon as their safety and security needs are met, and even before they concern themselves with building self-esteem. In other words, Maslow taught that feeling connected with other people is an even more fundamental human need than feeling good about yourself.)

Tracy offers several tips to help you accomplish this:

Tip #1: Express Gratitude

Tracy states that one way to build positive relationships is by showing gratitude for the people in your life. Expressing thankfulness makes others feel appreciated and boosts their self-esteem. Additionally, when you focus your thoughts on the things you appreciate in your life, you’ll draw more positive experiences to you (remember the Law of Attraction).

To apply this tip, the author suggests that you simply get in the habit of thanking people sincerely, and as often as possible.

(Shortform note: One effective way to remember what you’re thankful for—and to remember to thank people—is to keep a gratitude log. In The Happiness Project, Gretchen Rubin suggests taking a few minutes each day to write down three things that you’re grateful for. While Rubin suggests this as a way to boost your own happiness, it’s also an effective way to find opportunities to offer sincere thanks to others. For example, if you write down that you’re grateful for the dinner your spouse cooked that day, that’s a clear reminder that you should thank them for it.)

Tip #2: Be a Good Listener

Tracy also suggests becoming an excellent listener to form strong bonds. Listening well shows people that you value what they have to say, and it makes them feel understood. To demonstrate that you’re really listening, you can focus intently without interrupting, ask questions to make sure that you’re understanding the other person correctly, and repeat back what you heard to demonstrate comprehension.

(Shortform note: Active listening skills like Tracy describes here are beneficial to both parties in a conversation. For the listener, these skills enhance understanding, build empathy, and improve information retention. By fully engaging with the speaker, the listener gains deeper insights and can respond more effectively. For the speaker, being actively listened to creates a sense of validation and importance. This mutual engagement fosters stronger relationships, reduces misunderstandings, and creates a more positive and productive interaction overall. In professional settings, active listening can lead to better problem-solving and decision-making, while in personal relationships, it can deepen emotional connections and trust.)

Tip #3: Offer Praise Frequently

Finally, Tracy suggests frequently offering praise for good behaviors and actions. In addition to boosting the recipient’s self-esteem, praise is a type of positive reinforcement, meaning the person receiving praise will be more likely to keep doing whatever they were praised for. Therefore, offering praise benefits both you and the other person: They feel good about themselves, and they keep doing things that you appreciate.

It’s best to praise people immediately after catching them doing something praiseworthy to maximize their positive emotional association with the good behavior. Additionally, be specific about what they did well, and continue to praise them every time they repeat the behavior to continue reinforcing it.

(Shortform note: To highlight how valuable regular praise can be, Gallup has reported that positive recognition (which is to say, praise) in the workplace is one of the most important factors in employee engagement. Workers who get frequent, specific, and sincere recognition from their bosses are generally happier and more productive than workers who don’t. In this report, recognition also included rewards such as bonus pay, awards, and promotions; clearly, such things don’t apply to interpersonal relationships, but you may find it helpful to show your appreciation through small gestures like buying someone a drink at the bar.)