You’re doing all you can to make sure you’re not in debt, or at least to pay the debts, you are likely owing. You might even be saving some cash just to start something. But what if the money doesn’t come along as planned?
Maybe it’s time to reevaluate how you spend your cash. Stop trying to leave a celebrity lifestyle. People who have achieved real success in business projects or investments and people who have earned millions and billions of dollars have been very practical about how to spend their money.
You probably think rich people enjoy spending money, but as it so happens, nothing could be far from the truth. Below is a list of make believe things that people assume rich people spend money on but they really don’t.
1. Real estate
It is a dubious investment to buy luxury houses at inflated price. This is why rich people would instead buy promising real estate while it is cheap in order to make profits from it later when the property appropriates.
2. Extended warranty
It is known that people with modest income usually settle for extended warranty offers when they are purchasing new equipment. The fear of the possibility that the gadgets may develop some faults and breakdown becomes a reason for them to overpay for a machine just to be on the safe side. In fact, this isn’t necessary at all because, according to the United States New Money, producers warranties are more than enough.
3. Impulse purchases
Most of us are guilty of seeing beautiful but useless things, being sold at a discount price and going for them. We end up having regrets when we realise we actually don’t need most of these items, but then again, we just can’t control the impulse to buy them. Rich people, contrary to popular beliefs, do not get things they do not want. They would rather spend money on things that have value to them.
Warren Buffett, a multi-millionaire, once said: “If you buy things you do not need, soon you would have to sell things you need.” One excellent way to avoid unwarranted spending is to make a list of things you need and make sure those things are essential before you actually go to the store to buy them.
4. Footwear and clothes from high-end designers
We all know that’s rich people can afford expensive clothes from the trendiest and the newest designer collections without a pinch in their bank account. Nonetheless, if they didn’t have to be socially active, most of them would prefer not to make such purchases. Mark Zuckerberg would instead wear a short and a simple plain shirt rather than a “Gucci” designer shirt, and he can afford to buy a whole seasoned designed for himself.
5. Recent versions of gadgets
Do you know how it is that new versions of iPhones keep coming up now and then and you have people rushing to stay up to date with the latest mobile device or PC? Well, guess what? Rich folks aren’t gadget-crazed. Rich people aren’t eager to get the most recent of anything. In fact, they are content with old models of phones and computers. As long as it serves them well, they are right.
Celebrities would instead maintain old devices that they have personal connections with. They usually have a reason why they would really want to venture into buying a piece of expensive equipment, and it is often not just because they want to follow “the trend.”
6. Fees, loans and punishments for a delay in payments
Rich, smart people don’t make the mistake of taking out loans, and they never lose money on penalties, fines and commissions for one primary reason; to make sure there is no delay in payments. Mark Cuban, who is a billionaire investor, makes us understand that “If you use a credit card it means you don’t want to be rich.”
7. Buying kids lots of fancy toys
People with low or average income often believe they need to spoil your kids with gifts and toys. So they go all the way in getting them very fancy and expensive gifts as a show of affection to their children, and they don’t mind taking up the spaces in their children’s room and filling them up with toys just to prove a point.
A rich person might as well buy the whole toy factory. They prefer, however, to purchase simple things that let them save their money. Instead of rushing to buy an item advertised on TV, why not consider this; does my child really need this?
Which people would rather not only eat something simple, but they also ensure the food is healthy as well.
They don’t believe in too much filling their bellies. Average low-income-earner would instead get hamburgers, kabab and French fries with the hope that it fills them faster than foods low in cholesterol and rich in vitamins and minerals. Watch how you eat!
9. Displaying expenses
Ultimately, this encompasses the expense of presenting yourself as successful and prosperous. Just to show off, we don’t mind using our hard-earned money to book a first class ticket to places we have no business going to. We wouldn’t mind buying the latest cars just because you don’t want to join your friend taking public transportation. All this put merely is that people spend more than they have in order to look richer than they are.
Whereas, the rich folks live very modest lives without worrying about impressing anyone. Ingvar Kamprad, the founder of IKEA, was known as the fly economy class and maintained an old Volvo. Queen Elizabeth II saves electricity at her residence in the Buckingham Palace.
10. Extra education for the children
People who make average incomes usually organise various home tutors and extracurricular activities. This is often done to help them see their kid’s full potential; which is supposed to be a ticket to a happier and prosperous life. They also do this to help their children get better grades in school, so they do better than other rich kids in school. While this is a good cause, rich people achieve success differently.
They know from personal experience that too much of everything isn’t right. Excess tutoring has little to do with overall financial success. They merely allow their kids to enjoy their childhood, with the hope that they do what they enjoy and succeed doing just that.
11. Fortune telling, mystics and psychics
According to experts, most fortune teller’s clientele comprises of people with poor analytical skills. Nonetheless, logical thinking might just be the ultimate key to being financially successful.
12. Personal coach
Low-income earners with poor careers are the primary targets of unscrupulous business or life coaches. Many testimonies given from people with bitter experiences from training sessions have been recorded. One clear example is a seminar with Tony Robbins whose program earns him millions of dollars from tickets alone.
Make sure before spending your cash on motivational courses, that you take a quick look at rich and famous people’s biographies. You would discover that it is highly unlikely that any of them sought the help of any motivational speakers or over worshipped Asian guru.
13. Expensive interior decors
Modern furniture, as well as interior designs, are displayed in shops from time to time, and many people are quick to go rushing after these home items in order to stay updated with the new style of living. And a higher percentage of people who do this are the average income earners. The unfortunate aspect is, these designs change almost as quickly as they come and the items got become outdated.
Rich folks, however, like to keep it simple. Simple home decoration and they still happen to get the admiration of guests. Wealthy people often settle for perennial, time-tested options.
Taking the right step toward financial changes and spending habits isn’t easy, but nothing good comes easy right? It is indeed necessary to make some changes no doubt and the earlier, the better, especially if you genuinely want to be as productive as you want people to think you are.
What are those things you think you have but don’t need? Do you think you fall into any of the categories listed above? Share your thoughts in the comments. Thanks!