Hopefully, you’ve read our original article on habits of the wealthy. Here are five more things that wealthy people do. Do people do these because they are wealthy, or are they wealthy because they do these? It’s probably some of both but these are some tips that can help you manage your money better no matter what.
1. Always look for ways to pay less. Simply put, the wealthy don’t spend more than they need to on anything. Knowing how to negotiate price when buying big-ticket items means getting the same product and keeping more money in your pocket. For small purchases, research prices and shop around before you buy to find the best price on the item. For some items you intend to buy, first consider if borrowing, renting or repurposing something you already have might do the same job.
2. There is no “get rich quick.” In the world of investment, getting returns on your money requires taking risks with it. Any investment, whether savings, bonds or shares of a company, takes time to grow in value. If someone offers you a deal with great returns and little risk, likely there’s a part of the story that’s missing. “Get rich quick” schemes are often scams that part people from their money quick.
3. Network. Business owners know how to make connections in order to learn and grow their business, but informal networking is just as beneficial to individuals and families. A close-knit neighborhood is the simplest network, where neighbors can swap babysitting nights. If you are willing to share your talents and resources, others will share theirs, and everyone saves money and time. For example, if you know someone with skill in carpentry and a few more who know how to use power tools, you can add a deck to your home and owe some favors to your friends instead of debt to a contractor. If you know car repair, computer skills, organic gardening or anything you have to offer, everyone benefits and builds goodwill, a different kind of wealth more valuable than cash.
4. Don’t spend ostentatiously. Having money doesn’t mean buying a new car every two years or getting the most expensive car on the lot. In fact, 86 percent of the luxury cars in the US are sold to people who are not millionaires. People who want to look rich buy luxury cars. People who are rich may own luxury cars, but more often they own something more modest that they have had for years. They recognize that the value of a car is its function, not its prestige, and their sensible Honda Civic gets them around just as well as a Porsche 911. The same principle applies to houses; not all wealthy Americans have difficulty remembering how many houses they own. Sixty-seven percent of millionaires own just one, and 90 percent live in homes worth less than one million. An expensive home means higher mortgage payments, more property taxes and greater upkeep expenses. From an investment viewpoint, that’s a liability, not an asset.
5. Treat everyone equally. A loss of wealth can be rebuilt; a loss of reputation is not so easy. Word-of-mouth can lift or sink a business. Keep in mind what you want your legacy to be.
Have any successful habits that you want to share? Leave us a comment.