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When you think of the rich, you may think of lavish spending, huge mansions and fancy cars. The reality is that people who spend like that are more likely than not to be broke in a few years.
Most wise people employ some level of good habits along the way to preserve and sustain their wealth throughout their lives.
What are some of these good habits so that the rest of us can adopt them?
They have multiple sources of income.
Rob Gronkowski of the New England Patriots once said, “To this day, I still haven’t touched one dime of my signing bonus or NFL contract money.” Gronkowski exclusively lives off his endorsement money. While still lucrative, he is banking all of the NFL money that he has made over the years.
Jay Leno did the same thing. The comedian is known for not touching his Tonight Show money, which was close to $30 million a year. Instead, he lived off his stand-up comedy shows (around 150 days on the road each year).
Personally, I have been working hard to diversify my revenue streams away from my paycheck alone. I invest in passive index funds that provide dividends, along with running this blog and my Reaching Fire course. I figure while I’m still young, I should try to hustle and let the power of compound interest do its thing.
They don’t upgrade when unnecessary.
Warren Buffett has lived in the same house in Omaha, NE, since 1958, when he bought it for $31,500. Today, Buffett is worth over $84 billion. It almost seems comical that he has not upgraded to a new house. Why hasn’t he? Well, he told BBC, “I’m happy there. I’d move if I thought I’d be happier someplace else.”
Mark Zuckerberg still drives his $30,000 Acura to work. Plus, he is still comfortable wearing a plain old t-shirt and jeans everyday.
Even Bill Gates has gotten into the act. He sports a $10 watch. It works just as well as a much more expensive one, so why upgrade?
I always find it interesting when people that can afford anything opt for the cheaper, more simple options. I’m not sure that I would have the same will power as they do, especially since it wouldn’t affect my net-worth at all. However, I am a big proponent of avoiding lifestyle inflation.
They have a unique financial perspective.
Jose Mujica, the President of Uruguay between 2010 and 2015, is famous for refusing to live in the Presidential residence. Instead, he chose to live on a farm with his wife. Mujica even donated 90% of his $12,000 monthly salary to charity.
In 2010, he also drove a 1987 Volkswagen Beetle valued at $1,800. Someone reportedly offered him $1 million for it. When asked what he would do with that million, he said that he would donate the money to charity.
A reporter followed up and asked him how it felt to be the “poorest President”. Mujica said, “Poor people are those who only work to try to keep an expensive lifestyle and always want more and more.”
I have been trying to employ this mindset recently. I’m pursuing contentment. Honestly, I don’t need anything more than I currently have. I have to regularly remind myself of that in a world driven by materialism.
They look for deals.
Rich people, just like many of us, try to save a buck here and there. Lady Gaga, Hilary Swank, and Carrie Underwood, are all wealthy celebrities who have said that they clip coupons to save money.
It seems like no one wants to pay retail anymore, including the rich. Maybe that is surprising to some, but I think there is a great message here.
Even when you think you have made it, you don’t need to change your lifestyle. Spending for the sake of spending is silly. What made you happy in the past will probably still make you happy in the future. Spending more money won’t necessarily increase your happiness. What worked before to help you get to the top may be the wisest way to remain financially prosperous.
That’s crazyyy! I didn’t know Zuckerberg is driving an old Acura to work. I would think he doesn’t even need to drive to work…(I would be concerned about safety with the public!)
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Hahhaa…I would have thought he’d have a driver as well 🙂 Shows how little I know….
Perfect timing. I will be receiving a large for my company bonus, that will be paid out over biweekly paychecks for a year. A co-worker will be using it as down payment on buying a new car. Another friend wants me to take a fabulous expensive vacation with it. Me? Think I will treat myself to fun money of $50 paycheck and bank the rest in my retirement plan. I already live a good life and no internal need to blow this surprise money on objects and I already save for vacations. Will look for fun community things to do or classes. Odds are the additional money will grow for a while.
Money and things do not bring a satisfying quality life. Friends, family and being involved 1:1 in life does. My co-worker love for the future new car will dim quickly.
That’s so smart Debbie!!! Investing for the future sounds like you may be able to have multiple vacations if you let it grow over time 🙂
I prefer “wealthy” over “rich” personally.
Everyone should read the Millionaire Next Door. It’s quite enlightening.
Brad – Financial Life Planning recently posted…How To Crush Your Debt With the Debt Snowball Method
It’s such a wonderful book. It should be a required reading in high schools 🙂
I love hearing stories like this. Knowing that there are wealthy people out there that are being responsible with their money should be highlighted more. There are the real examples for people, instead of trying to keep up with the ones that spend their money frivolously.
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I totally agree with you!!! If the wealthy don’t need it. Why do we NEED it 🙂
I’m over buying material things. I’ve been there done that.
I seek out experiences like going on trips and vacations. And spending time with loved ones and pets. Sometimes the best things in life are free
Good read.
CJ recently posted…The Best Home Security Camera for Your Money
Yes, memories are some of the best things that you can spend money on. I totally agree with you!!!
I fully agree that poorest people are the ones who seek to live a lavish lifestyle and always want more and more. I admit that I like luxury things but it comes to a point where it becomes unsustainable. I’m appreciate with what I have. If anything, I feel like the happiest moment is when life is simple and nothing to worry about. When you keep things simple, you don’t need to fork out as much money.
Great post!
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Haha…I like comfortable things in life that somehow are luxurious 🙂 That’s at least what I tell myself…
Living lavishly and spending a lot of money on useless stuff don’t necessarily have to go hand in hand like you mentioned.
Even expensive hobbies can be done cheaply!
Great post MSM
Erik @ The Mastermind Within recently posted…The #1 Financial Mindset for Wealth: Track Your Income and Expenses!
Hahahah…I totally agree with you Erik!!! Stuff is just stuff at the end of the day 🙂
I agree with a previous comment. I am thinking wealthy is a better term, in some respects, and that is what I really want for my wife…wealth. Now we can define that in different ways, but I want to take those four steps and more and become one of the wealthy (of course wealthy for me might be a little different than others).
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Thanks for sharing Jason!!! Wealthy is probably the right term and I definitely wouldn’t mind being wealthy in life!!!
There are definitely commonalities that you can find in the behaviors and mindset of wealthy persons vs poor ones. I agree with the list, but especially the first one in terms of having multiple sources of income. I think that’s super important and one of the reasons why I pursue other strategies other than dividend growth investing. Thanks for sharing MSM.
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Glad you enjoyed the article 🙂 Multiple streams of income is so important. Savings is definitely not enough alone!!!
Some good role models there, thanks for the reminders.
I really do believe spending big is the preserve of the poor, the wealthy buy assets.
Ms ZiYou recently posted…Why I love running (ok jogging then)
I totally agree. If you try to keep up with the Joneses you’ll most likely be poor and unhappy 🙁
The upgrading one is hard for me. I try to buy less often and enjoy the things I already have. I love multiple streams of income, it really makes you feel like a boss!
Lady Dividend recently posted…Fast-Track Your Goals
Yeah having multiple streams of income is definitely the way to go 🙂
It’s surprising how “normal” many of their lives are. And I think because of that they are able to succeed over and over again. I’m trying to adopt a simple wardrobe like Mark myself. 🙂
SMM recently posted…Money Personality: What’s The Downside Of Yours?
If my wife would let me I would wear my uniform of a white tshirt and blue jeans everyday 🙂 I don’t think she’ll go for it but I’d love for that to be my retirement uniform…hahaha
WOW thats crazy about the celebs cutting out coupons! You’d expect them to be more interested in investing!
Fab Post!
I would have never guessed it either. It’s interesting what successful people do, especially when it’s least expected.
This is so interesting and really great points! I love that celebrities cut coupons, too! Haha and I like to think that if I ever became one of the richest of the rich, that I wouldn’t upgrade too much either, but I would totally have to splurge every now and then. 🙂 I mean, I’m sure Bill Gates has more than one watch, right?!
Hahhaha…I would think that he would have more than one watch but maybe he’s making a fashion statement with just the one 🙂
Not all super-wealthy people have multiple sources of income. They tend to diversify after they become insanely wealthy. But while they were building their wealth, they focused on building one stream of income (usually their business).
Troy Bombardia @ Bull Market recently posted…Why I’m medium-long term bullish on the stock market
That’s a great point Troy!!! Look at Bill Gates, Jeff Bezos and Warren Buffett. They definitely had high concentrations in wealth in one area to start their fortunes. Thanks for sharing!!!