Even though they are worth billions, some of the wealthiest people in the world spend less on certain things than those who make less than six figures. They’ve built a life on frugality where it matters.
This is not to say that if you are worth millions, you shouldn’t spend your money on luxurious vehicles and waterfront mansions; it means having those things doesn’t make you wealthy.
On your path to building wealth, it’s helpful to understand where it’s important to spend and save. Because one major rule to build wealth is to spend less than you earn, and keeping up with the Jones’s never made anyone wealthy. So, here are some habits the wealthy still live by…
Modest transportation
The 2017 Ferrari 488 is worth about $245,000. Most extremely wealthy people can easily afford this, but just because you can, doesn’t mean you should. Mark Zuckerberg, who has a net worth of $66.7 billion could buy 12 ferraris if he wanted, but he still drives a 5-speed Volkswagen. And according to research from Dave Ramsey, “61% of wealthy people actually drive Hondas and Toyotas and Fords, just like all the rest of us.”
Flying Coach
Economy tickets are still considered a huge chunk of change, and many believe that the extra cost to fly business or first class is just too exorbitant. Jim Koch, founder of Boston Beer Company flies coach, as well as everyone else in his company. Ikea founder, Ingvar Kamprad also flies coach. This could be an instance where the destination is more important than the journey — spend your money on the vacation and not the ride there.
Living modestly
A palatial estate is usually considered a sign of wealth. But not everybody sees it that way. Carlos Slim, who surpassed Bill Gates as richest man in the world, has lived in the same home for 40 years. Warren Buffett also lives in the same home he bought for $31,00 50 years ago.
They don’t play the lottery
You’re actually more likely to die falling out of bed than you are to win the lottery. Getting the jackpot is not building wealth. You’re spending money on something that will very likely never get a return. Instead, put that lottery ticket money away and invest it in real estate, stocks, retirement — something with a better guarantee to make you money.
Analyze and Reevaluate your financial goals
The wealthy became that way for many reasons, one important factor is having a firm grasp on your financial status. Whether it’s every week, every month, or every year, revisit your financial situation; see if you need to restructure your budget. Analyze your investments and discover where improvements need to be made. Someone who knows their money, is earning more money.
To learn more about building wealth, read Wealth Can’t Wait! Available at Amazon.com!