5 frugal habits of the rich
Some very wealthy people have retained the spend-less-than-you-earn mindset that got them where they are today.
This post comes from Kyle James at partner site U.S. News & World Report.
Here are five frugal habits many of the upper class have adopted to build long-lasting wealth and financial independence:
Drive a modest car. Your car should serve the purpose of getting you safely and comfortably from point A to point B only, and nothing more. When you pull up to a stoplight in an expensive car, you might impress a stranger. However, don't let the price tag of your car define your character or image, because at the end of the day most people couldn't care less what type of car you drive.
Let Facebook founder Mark Zuckerberg, who drives a modest $30,000 Acura TSX entry-level sedan, be your role model on this one.
Buy a modest house. Warren Buffett famously still lives in the Omaha, Neb., home he bought back in 1958 for $31,500. Take Buffett's cue and don't overwhelm yourself with a large monthly mortgage payment. Buy a modest and comfortable home and use the money you save to build your savings and retirement fund.
Don't carry wads of cash if possible. Try to avoid traveling with a wallet packed with cash. According to Bankrate.com, 86% of people who spend cash on luxuries like expensive cars, jewelry and electronics are non-millionaires trying to act the part by purchasing luxury brands.
Instead, follow the example of oil mogul T. Boone Pickens, who famously shops with a grocery list and carries only the amount of cash he needs to make purchases.
Don't pay full price. A great way to keep more of your money is by not paying full price on anything. Hilary Swank, above, who has an estimated net worth of $40 million, is commonly seen using coupons at the grocery store. Michelle Obama often opts to shop at Target or H&M rather than high-end department stores.
A great way to build wealth is to have a frugal mindset and use the money you save on consumer goods to build your investments and savings accounts.
Have an action mentality. Almost all self-made millionaires have one thing in common: They are people of action. They don't sit around feeling sorry for themselves and waiting for something good to happen to them, as opposed to the people who I would say have the "lottery mentality."
People of action take appropriate risks, are constantly looking to improve themselves, and are addicted to knowledge, as it is the best way to gain a competitive advantage in life's financial endeavors.
Truly rich people are those who take their income and turn it into wealth by investing wisely, saving, and living frugally. People who take their income and try to use it to support an unsustainable lifestyle are those who end up in debt and are unable to retire on their terms.
When it comes to money and finances, it all boils down to choices and personal responsibility. Which road are you going to take?
More from U.S. News & World Report and MSN Money:
What is my opinion of these 5 tips? they are all common sense approaches to life!
You can't buy status or respect. And attempts to do so only impress the people that are also insecure.
Find what makes YOU happy, and make that your focus. Screw impressing anyone else.
When I was in my 20s, I worked at a used furniture store. About once a week the owner would say something like, "That guy that just left - he's worth millions". One day I asked him why all these 'millionaires' shop in a used furniture store. He said, "That's how they got to be millionaires."
I've never forgotten that.
My net worth is above $1 million but I don't consider myself wealthy. My salary has never been above $55K so I got there by being frugal and saving as much as I could. I don't have a mortgage or car payment but I routinely put away the equivalent of a mortgage and car payment every month, and if it so happens that in any month we are low on extra cash to spend we tighten the belt a bit rather than not make those "payments". We just won't go out to eat or to the movies and skip any extra purchases that month.
Most of the advice in the article is common sense. Always shop around for best price when making purchases, we tend to buy more when stuff is on sale, use coupons, etc. Eating out you can get discounts from sites like restaurant.com which saves some money (and also introduces us to new restaurants). Our new house is about 3,000 square feet which we purchased for cash after many years of saving and living in a more modest 1,400 sq. ft. home. I would have had no problem living in the old home forever but we got what we believe is a great deal on a foreclosure for a house that we always dreamed of owning but never thought we could afford. Our two cars were new, one was a showroom model that came with 1,500 miles but also a $6K discount and full warranty, and the other I bought by taking advantage of the clash for clunkers program a few years back by trading in a '96 van. Both new cars' MSRP were under $20K so not fancy, just reliable fuel efficient vehicles that we intend to drive them as long as we can.
The biggest thing is live within your means and have a plan of where you want to be financially in 5, 10, 20 years and then work towards getting there. Save and invest. It can be done but requires sacrifice and the will to do it.
it doesent matter how much money you have it's what you do with it that counts
I to live below my means.I don't ever remember spending all of my paycheck.Years ago sometimes I would go 3,4 or 5 weeks before I deposited the checks in the bank.People can live below their means.But many don't.They want stuff.The smart phone,3 or 4 hdtv's and the service ,cable satellite etc.
They buy to much home.Or make the mistake of buying when really they should only rent.I could go on and on.
"Frugality is a significant increase in income ".Cicero
Michelle Obama...Really?! You HAD to put Michelle Obama in this story...Really!?
Only wish she were so "frugal" with the people's money as she supposedly is with her own!
Nope, you are wrong
the government is craking down on those folks. No more improving your status. Down with the little man. You work and feed us and I will drink hot tea and watch
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