THIS POST MAY CONTAIN AFFILIATE LINKS. PLEASE READ MY DISCLOSURE FOR MORE INFO.
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.