One of my favorite bloggers and inspirational saver Save, Spend, Splurge recently shared a list of things wealthy people do:
- Don’t own most of their net worth in real estate (e.g. their primary residence)
- Don’t want to be a slave to anyone or any company and have the attitude to boot
- Don’t go into debt for consumer spending (e.g. clothes, electronics, vacations)
- Don’t leave huge chunks of their savings sitting in high-interest savings accounts
- Don’t believe that the only way to go through life is to be in crippling debt for anything, including houses
- Do make more money and look at increasing their net worth (e.g. they negotiate their salaries)
- Do take the time to learn how to manage their money (e.g.budget, invest it in index funds,ETFs, stocks such as dividend paying ones)
- Do take calculated risks
- Do understand that student loans (that lead to dead end jobs), homes and cars are debt traps if they aren’t careful
- Do spend their money and enjoy it, but within reason
Great list! It shows what wealthy people do and then as the opposite of this list goes, shows what unwealthy people do.
Want to be wealthy? Do what the wealthy people do.
A few of my personal notes from the list:
- Don’t own most of their net worth in real estate – In the next year this will probably be true for me as I buy a house, but ultimately the plan is to have my home/real estate be just a fraction of the overall portfolio. My plan is to diversify my portfolio as much as is reasonable.
- Don’t want to be a slave to anyone or any company and have the attitude to boot – I don’t want to work for anyone at a certain point. I watched my parents slave away their lives for one employer and I’d rather climb up and out through my own entrepreneurial endeavors.
- Don’t go into debt for consumer spending (e.g. clothes, electronics, vacations) – This is something I haven’t done since I was young and dumb racking up credit card debt in college. After paying off all my credit card debt and learning to use credit cards responsibly, I realized how dumb it is to buy consumer goods on credit.
- Don’t leave huge chunks of their savings sitting in high-interest savings accounts – This is huge! I invest as much as I can where I’m earning 12-15% on my money. So much better than earning less than 2% or worse, keeping it in checking and earning nothing!
- Don’t believe that the only way to go through life is to be in crippling debt for anything, including houses – Crippling debt is overrated. Be responsible when you borrow money. Choose less house, a cheaper degree, and you’ll be a lot happier without a huge burden of debt.
- Do make more money and look at increasing their net worth (e.g. they negotiate their salaries) – I’m currently making the highest rate per hour I’ve ever made and I’m also investing in a growing business of my own. Growing your salary and saving to grow your net worth is so important!
- Do spend their money and enjoy it, but within reason – I’m currrently learning to do this. I want to save EVERYTHING but friends and my boyfriend are helping me open up a bit and spend without going crazy. It’s a new balanced lifestyle that is reasonable and fun! This is the year of frugal fun after all!
It’s really, really easy to get caught up in the typical advice you hear from most people about how to live your life and spend your money. That means you’ll probably end up in crippling debt and with no escape plan in sight. Wealthy people don’t follow the “normal” advice and they live a bit differently – in a good way.
If you plan to be wealthy, and I certainly do, then you can’t rely on your old habits. You have to adopt a different mindset and different habits. Reading about what the wealthy do is a great way to get started which is why I share posts like this and habits of the wealthiest people and 20 things rich people do every day. Reading about what the wealthy do in their daily lives can help us adopt some of the same habits. Will it automatically make us rich? No, but it will get us a lot closer than the typical spend, spend, spend advice out there!