You see a friend pull up in a brand new shiny truck. He eagerly lists all of the bells and whistles. The best part, he financed it with 0 down at 5% APR. What a deal! You find yourself thinking, “Hey, I could afford those payments.” Unless you want to work for the rest of your life paying for things you can’t afford, you need to stop emulating the broke, and start learning from the wealthy. Don’t let your broke friends influence your financial decisions. As you watch your savings grow, your thinking will completely change. You won’t envy the guy driving the BMW, and long for the day you can get behind the wheel. You don’t want those car payments, and you’re perfectly happy in your 6-year old Honda. You do what the rich do, and you leave your hard-earned dollars invested. The media has lied to you. They air these reality TV shows that depict the wealthy in flashy cars, huge mansions, and designer clothing. The reality is that this only accurately depicts a small fraction of millionaires. A lot of self-made millionaires live modest lifestyles, and don’t flash their millionaire status around. They could be your co-worker. They could be your friend, or your neighbor. Here are 4 things you could learn from the rich.
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1.) They Pay Cash
Most of them use credit cards, but they never pay a penny in interest. They reap the rewards by making purchases they would normally make with cash. They usually pay cash for their vehicles, and buy pre-owned. They live within their means, and spend less than what they earn.
2.) They Invest
Not only do they spend less than what they earn, but they take that savings and grow it. They invest in appreciating over depreciating assets. They make their hard-earned dollars work, so that they don’t have to.
3.) They Budget
They budget and carefully plan their expenses. They have savings goals, and pay themselves first. They tend to be frugal and conservative spenders.
4.) They Don’t Keep up With the Joneses
They don’t value status symbols. They aren’t driving luxury brand new vehicles, wearing expensive designer clothing, or flashing that Rolex on their wrist. They know that the majority of these status symbols are of little value, and they won’t invest their money in them.
Want to learn more about the spending habits of the wealthy? Check out the book “The Millionaire Next Door” by Thomas J Stanley.