Easy Habits of the Wealthy
I have always been fascinated by rich people. Not because I’m jealous (maybe a little), but because I’m truly curious.
What do the wealthy spend their money on? How did they become rich? What are their habits and hobbies? Do they have super high-paying jobs? Did they receive an inheritance? Did they marry into money?
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Since I don’t personally know any rich people that I can ask these questions to I did my own research.
The Millionaire Next Door is a must-read for anyone who wants insight into the lives of the rich. It reveals a lot of the common characteristics of the rich and even includes some funny anecdotes from the wealthy interviewees.
I am currently reading Rich Dad, Poor Dad and can’t put it down. My favorite quote “The poor and the middle class work for money. The rich have money work for them.”
I don’t expect to be rich in my life-time, at least not in the monetary sense.
However, I am working towards creating a debt-free mortgage-free and stress-free life for my family. A lot of the things that rich people do that many poor people don’t would help facilitate these goals.
Let’s review some of the habits of the wealthy and how we can do them too!
#1 BUDGET
Creating and sticking to a budget is one of the best ways to track your money and save. Rich people create a budget that they stick to WOF, without fail. They know exactly where their money is going each month.
Using a budget planner is a great way to make sure you stay on track. We easily save over $10,000 (now $20,000) a year and hope to increase our savings rate in the near future.
People don’t budget for many reasons. My husband feels budgets are too restricting and make him feel like he’s depriving himself. I just feel that it’s a lot of work and would be hard to stick to if only one of us (myself) is actually willing to follow it. We used the cash envelope system and that helped us reduce our grocery budget even more.
Our lives have been a bit paycheck to paycheck these last few months with the end of the year expenses, holidays, and strong push to be debt-free. Before the end of 2017 I plan to have one more close review of our finances and to start using the envelope system to make next year great. Once our small debts are paid off I will attempt to convince my husband to create and follow a budget that doesn’t feel too restrictive.
Update: We paid off ALL of our debt totaling over $33,000 in February 2018.
An article I read a few months ago had something in it that stuck with me that I want to share with you. It said, people who are wealthy and most prepared for retirement can tell you how much they will have saved not just by the end of the year, but how much they will have saved 10, 20 years from now.
#2 BUY USED WHENEVER POSSIBLE
People think that because rich people have a lot of money they buy everything new. They don’t! They even use coupons and eBates, which is now Rakuten. You can read my full review/tutorial here.
Always use eBates for your online purchases to score cash back. Get a $10 welcome bonus with this special link.
The wealthy have a strong understanding of where and how money should be spent. They typically spend money to make more money.
Take for example a new car. A new car loses 9% of its value as soon as it leaves the lot. By buying a car that is just a year old you can save a few thousand dollars.
Used baby items go for next to nothing. When our daughter was born there were several items I wanted to buy new, such as her car seat, crib, and stroller. Everything else was either gifted to her, purchased at a garage sale, or second-hand shop.
Shop around. If you have to buy new try to get deals or shop online. There are even high-end consignment shops where you can purchase like new items at a fraction of the original price.
#3 READ
Rich people are always reading, but not just any reading material. They read to learn. They read the news, financial papers, self-improvement books, zzzzzzzzzzzzzzz…*just kidding*
Many rich people will purchase the audiobook version of books because multi-tasking means more free time to make more money.
Here are the best personal finance books to read if you really want to change your financial situation.
Amazon currently offers a 30 day free trial to Audible and for a limited time you can 2 free audio books.
I highly recommend I Will Teach You to Be Rich. Even though we are debt-free, it has super easy and actionable steps that have made our saving and investing even easier.
I’ll admit I like reading mysteries and cheesy romance novels, but they aren’t teaching me much. *sigh* I just love happy endings…
I have started reading investment books like I said I would be to hopefully make this year a great year. I spend 2 hours driving to and from work listening to the radio. As a compromise I think I’ll start listening to some self-help audiobooks on the way to work and listening to the top hits on the way home.
#4 DON’T WATCH TV
Rich people believe time is money and therefore spend little to no time watching television. I’m pretty sure they aren’t Keeping Up With the Kardashians. Instead they are doing something productive, like reading.
They also don’t spend time on social media platforms, commenting on your cute dog photos, and leaving emoji-filled birthday messages on Facebook 😉
In the past we replaced our cable with an Amazon Fire TV stick to save money. I finally finished watching Season 2 of Stranger Things, but don’t have much time to peacefully watch TV without the kids.
#5 LEARN NEW SKILLS
It can be fun to learn new skills like speaking a different language, dancing, cooking, blogging, etc. Rich people are always learning new skills that they can make a profit on.
A financial blogger, Mr. Money Mustache wrote about how his wife turned her soap making hobby into a 5 figure business. One of my co-workers bakes and sells his own dog treats and does especially well around the holidays.
I’ve dabbled in jewelry making, knitting, crocheting, and other crafts. I’ve thought about starting an Etsy shop, but am focused on other endeavors at the moment.
#6 INVEST
Rich people invest. They invest in stocks, real estate, artwork, gold. They invest in both tangible and intangible items.
All my life I have been a saver. I paid for my car in cash so that I wouldn’t have a car payment. I used most of my savings to pay off my student loan debt. I used the cash I saved after college for a down payment on our home.
Other than my deferred compensation plan I do not have much saved. All the cash I had was kept in savings accounts earning little to no interest. Had I invested that money who knows how much I would have now.
Once I feel knowledgeable enough I will begin exploring different investment outlets.
#7 BUY TO LAST
When the rich make purchases they buy high quality items that will last. For example, let’s say you buy yourself a faux-leather jacket. Now this jacket may last you 2 to 3 years. A real leather jacket is significantly more money, but will last a lifetime.
This is what you would call smart shopping. Buy clothing items that both last and can be used interchangeably within your wardrobe.
Related posts on saving money:
*Things we stopped buying to save money
*6 Bank accounts you should have
I enjoy some great savings by purchasing these items at the end of the season. E.g. Last year I scored a great deal on winter boots, $8! However, I know these boots won’t last me forever.
#8 NETWORK/SURROUND SELF WITH SUCCESSFUL PEOPLE
You are the sum of the 5 people closest to you. That’s probably not a good thing for me since it includes 2 toddlers. Though I have to say my cupcake decorating and play-do sculpting skills are on point.
The rich surround themselves with people who are successful, which provides them with new opportunities for growth. By networking they can even meet potential new business clients.
I have been trying to surround myself with successful bloggers in hopes to also gain blogging success. Next I would like to meet some money gurus/entrepreneurs to expand my financial knowledge, which I could then share with all of you.
#9 SET LONG TERM GOALS
Rich people set long term goals. People who set long term goals tend to save significantly more for retirement than people who look ahead only a few years.
Rich people can look ahead 20 to 30 years and tell you exactly how much they will have saved.
Financial goals to accomplish in your lifetime.
I know that I want to have money saved for retirement, but have not even begun to figure out how much I need to be saving to retire comfortably because it is such a long ways away.
My parents are at the age that they should be retiring and they have very little saved. They are investing in stocks when they should be investing in areas of less risk, such as bonds.
Because I don’t want to be like my parents I am going to force myself to write down and create long term goals for myself. They will include budgeting and setting aside a specific amount each month for retirement.
Write down your goals. By writing them down and visualizing them you are more likely to achieve them. Here are 11 easy tips to ensure you accomplish your goals.
#10 LEARN FROM OTHERS’ MISTAKES
Why make a mistake if you don’t have to? The rich are very calculated in nature, hence all the planning and budgeting they do. They educate themselves as much as possible so they can reduce the risk factor in their decision making.
When the rich make mistakes they learn from them. By networking with other successful rich people they can also learn from mistakes that their peers make too.
My family and I do things a bit differently compared to the majority of the people we surround ourselves with. Therefore we are prone to certain types of mistakes with regards to side hustling.
Our latest endeavor was purchasing a car to flip for a profit. Instead we ended up losing money. This was a costly mistake, but one we won’t make again. Gotta stick to what you know until you know something else.
#11 DON’T LOOK RICH
One year I was inside a Tiffany’s jewelry store. Now they aren’t the highest end jewelry store, but they do attract a certain type of crowd.
I noticed that the sales people would rush to help the men and women who were dressed the fanciest assuming they had the most money to spend.
While browsing around I saw a woman with sneakers and sweatpants on. She was purchasing multiple pieces of jewelry, more than anyone else in the store. She actually had to call someone over to help her because the sales people were too busy striking up conversations with the “fancy” folk.
Rich people don’t look rich. They don’t live in mansions or drive expensive cars. They live in a modest home and invest the money they save. Read my husband’s interview with a real-life interview with a millionaire for more tips.
No problem for me here.
Read on for additional daily habits of the wealthy. If you’re enjoying this post don’t forget to pin it so tower’s can check it out! thanks 🙂
BONUS “RICH” PEOPLE HABITS
As my mortgage-free journey continues I’ve learned more and more ways to make my money grow and keep a debt-free life.
KNOW WHEN TO SAY “NO”
Stop worrying about what others will think of you when you say no. Will they think you’re cheap, frugal, or poor? Who cares? It won’t always be the case.
I have had to say no to events, purchases, and outings a few times and don’t regret it at all.
Making some sacrifices back them meant I am now able to go on vacation with the hubby and my 2 kids with NO credit card debt. #winning
WAKE UP EARLY
Okay, I’m sure there are some rich people out there who like sleeping in, I mean who doesn’t.
The only way I get things done is when the kids are sleeping or out. When I get home from work I work on my blog. This means I get more posts done and make more money.
This past December I made OVER $1,000 blogging (in 1 month)! I couldn’t have done it without putting in the extra hours and sacrificing some sleep.
If you want to make more money you need to put in the time.
CRUSH YOUR “TO DO” LISTS
I have sticky notes all over the place my husband thinks I’m a crazy person. It’s just I am constantly writing down things I want to accomplish, my money goals, fitness goals, blogging goals.
I am proud to say that I have accomplished a ton of goals even if they are small.
The rich will keep their eye on the prize so to speak. Do not be discouraged.
UNDERSTANDING WHAT THE RICH DO TO IMPROVE YOUR OWN FINANCIAL WELFARE
Being rich may not be a goal of yours, but if you’re reading my money posts you probably want to at least live a more financially stable life.
Be frugal, educate yourself, invest, surround yourself with successful and like-minded people, and write down your long-term goals.
How many of these habit of the rich do you do now? If you have any money making and saving tips please share in the comments below.
11 Simple Ways to Go From Poor to Rich
I love this post! It’s a great reminder that you can control your own wealth by making simple, yet thoughtful, budgeting and buying decisions.
Rich people go to thrift stores and food stores where they can buy items for 50% off normal pricing. That means your money goes twice as far as an average buying customer. Oh, and they DO watch TV.
Good point Pam. And I’m sure rich people do watch tv, the news, and probably even bad tv shows. Maybe just not as frequently lol
Thrift stores, YES! I absolutely LOVE shopping the thrift stores in my area. I actually get nicer quality items there than at the big box stores. Name brand labels (though I don’t have to have name brands) that last longer than the clothing that shrinks up after just one time in the washer and dryer.
Yes! I haven’t been to one in awhile because I’m trying to save up just a little more investing cash. Going to go through my closet and sell the stuff I haven’t worn in awhile and hopefully score so nice name brand stuff at thrift store prices.
Good luck with your savings plans. It sounds like you are on the right track.
Thank you. We’re struggling right now after all the holiday spending, but we’re getting there.
Remember to pay yourself first. 10% goes into savings plan.
Don’t charge more than you can pay off at the end of the month. Just look at your charge bills. Add it up. How much are you spending to use someone else’s money?
I do all of these things… I should be rich then hahahaha. Maybe I’m on my way to becoming rich?…….
LOL!!!!! I hope so
This is great! Ironically, I’ve never come close to being “rich”, but I employ many of these practices (except invest- no money to invest, lol). I’ll keep at it, and maybe one day…
I was rich until I bought a house and had 2 kids 🙂 Going to try again and learn from my mistakes this time around.
I love everything on this list! Such a very thorough and inspiring article. Investing is so critical. I try to teach my kids about it so that they start at a young age.
thank you! I wish my parents did the same thing. Hoping to encourage my kids to be great savers.
Have a plan and stick to it – that’s how I was raised. These are great reminders and hopefully better financial health to us all in 2018!
Yes I agree. I think I need to be more realistic in my planning. Cheers!
I read this aloud to my partner just now. We both found it interesting. We like the “buy to last ” and “learning new skills” in particular. Thanks for sharing.
You’re welcome!
Great tips. I definitely need to make a lot of changes to be where I want to be. The thing is, I know a lot of these things, but don’t actually DO them. DOING them is what counts.
I hear you on that. I know we have a lot to work on still, but hoping 2018 is our year.
This actually made me laugh when I got to the part about rich people reading because I have a friend that whenever he asks me what I am doing and I say reading he always say…reading is for rich people. lol
that’s hilarious! so maybe there is truth in it. Are you rich? lol
This article is spot on! I’ve never been rich, but growing up in SoCal you can’t help but rub shoulders with the wealthy. One of my closest friends comes from substantial wealth that her father earned through shrewd real estate investments in the 1960’s (think, whole city blocks in Los Angeles that he purchased for next to nothing and later sold for astronomical amounts). You would never, ever know it meeting the family. They all drive cars that are purchased for cash and driven into the ground, shop thrift stores for clothes and estate sales for furniture, and maintain a humble life. They are pure GOALS for me.
Now if I can just get the hubs on board with budgeting!
thank you for sharing. This is great. I’m having the same issue trying to get my husband on board too. Trying to find the right inspiration.
This is a great list! I definitely need to do more of the audiobooks bc I love to read and always have 5 books going, finding it hard to finish just bc of life and all things that need to get done in a day!
Such great tips! There is wisdom in these tips. I wholeheartedly agree too about buying quality over quantity too. 🙂
These are all very true. I have seen things such as the jewelry store episode in person.
Very interesting list…I wouldn’t have guessed that rich people do most of these. Thanks for sharing.
Interesting! I love that all of these are things that anyone can do. I would love to create a debt free and stress-free life too. Those are things we can all get behind. Great article.
thank you! Well cheers to all of us to doing better in 2018.
What a great list! I agree budgeting is our family’s down fall, but I want to get started!
I’m going to try the envelope method and see if that helps us.
Great post. I read that book many years ago. After reading your synopsis I’m thinking that i might need to do a re-read. Thanks!
Thank you. Yes I like that it’s such an easy read and easy to understand. A lot of common sense stuff, but still ones that we don’t all do.
Awesome tips and really interesting!
My very well-heeled grandmother LOVED to brag about the thrift store deals she found!
yea I have noticed a lot of these qualities in people with wealth. Especially: invest and buy to last.
Yes! There are a lot of ideas here that people don’t think about. The thought is the here & now, and how good can I make myself look today? I’ve often thought that some of the people driving the nicest cars are quite possibly some of the people most heavily in debt.
I wonder that myself, but at the end of the day as long as we’re happy it should be all that matters.
I often wonder that myself. One of the best commercials was one where a middle class guy in a suit was being seen off by his wife and happy kids from their suburban home. He got into his shiny car and it looked like a typical yuppy morning… then as he drives out of his driveway he turns to the camera and says I’m up to my eyeballs in debt. It was Saturday and the rest of the panned out picture showed others at leisure. Sometimes you have to “pan out” and look at the big picture. That one should be played daily…
Good luck on the journey – these tips are good reminders. We’re on our way but it really works when both are onboard.
I am a huge supporter of budgeting. Even if you have all your debt paid and have more than enough money to cover the bills, budgeting is still the best thing families can do to make sure they know where every dollar is going.
I wish I had budgeted better when we were debt free then we wouldn’t be in the situation we are in now. Live and learn.
I do a few of these but struggle with networking. I want to but I am such an introvert it terrifies me lol.
I know what you mean. Me too! I am part of a mom group on Facebook and hoping I can make some new friends that way.
I started volunteering a few years ago. Its very rewarding and helps networking and getting to see different friendly faces.
I really want to spend more time volunteering and teaching my kids how to give back to the community. Networking would be a great plus as well.
One of my goals for 2018 is to get my finances together! It makes sense that the wealthy will watch their money more closely, that must be why they still have it haha!
Good luck!
This article is not about when I suspected when I read the title. I like it. Your notes are very positive and encouraging. Thank you for sharing this list.
So glad you liked it!
Those are really good thoughts! I especially need to work on sticking to a budget again and setting out long-term goals.
I know we are working on the budgeting too. Hoping once we get the envelope system started we can really start saving.
Love this list! We buy a lot of used things especially cars and books!
Thank you! I used to love buying books on half.com (eBay for books) for school and that saved me a few hundred dollars every semester. Buying used cars has saved us thousands. The key is getting one with a warranty/in good condition despite age.
These are great tips! I have always preferred reading to watching TV, though I do have a must watch show. And with the Olympics starting, I will probably be watching more TV than normal for the next two weeks. 🙂
Thank you. I have my few guilty pleasure shows too lol
You are right on when you said rich people budget. I have two accounts
Because I am rich. I am also frugal and with the computer I can get online to my accounts and see what my money balance is that day.
I have a set amount I can spend each day and I invest the rest. Reinvestment is how the rich get richer. Thanks.
This is great advice. I only recently started investing and wish I had started many years ago rather than just saved a little here and there. Something to start doing ASAP and teach my kids. thanks!
Great post and advise! The habits of living on less than you make and investing money on a consistent basis can truly change people’s lives. Keep up the good work.
Thanks! I wish I had learned this lesson 10 years ago, but I’m working hard at it now and see it paying off already.
The rich are not the people you see driving brand new high end cars. A car is to get you from point A to point B. Any car in good running condition can do that. Sixteen years ago I paid $20,000 cash for a new Toyota Camry. I didn”t finance it because I wanted to save paying interest. I bought it because they said I could put upwards of 300,000 miles on it and maybe even 400,000 miles if I keep up with regular oil changes. Well, it now has 220,000 miles and it is 16 years old. I figure I’ll still be driving it 10 years from now. That’s 26 years with no car payments. I can easily afford to pay cash for a new high end vehicle, but why?
Thanks so much for sharing Doris. I’m like you. Why pay interest and have a car payment if you don’t have to. My car is still running strong, but when it goes I’ll probably get another Toyota.
I am rich. Now…finally. Here is one more important characteristic to add to this list — Live long enough to let compound interest work.
Each dollar I put away at age 25 in a tax-sheltered retirement account (in an index mutual fund) is now worth over $100, forty years later.
The lesson — Save when you are young, and then stay alive.
These are great words of advice and ones I wish someone taught me when I was younger, but now I am doing just that. I plan on teaching my kids the same. I know a lot of people don’t invest out of fear, but index funds are must if one wants to have enough money to retire. thank you so much for sharing!
Investing isn’t this complex mysterious thing. Reading and learning is important but you also have to learn by doing. I started with 2 thousand dollars ten years ago. I made plenty of mistakes along the way. It has grown and I try to add $100 every month but I don’t always manage to do that. Warren Buffett says don’t invest in things you don’t understand. So I stuck to what I did understand. (Not much in the beginning). I own mostly stocks and do not think they are necessarily riskier than bonds. When I end up with a lot of profit , I set a bottom end on the stock so it sells if it drops a certain amount, retaining most of my profit. This year the amount of profit I made made in the market is pretty close to my working income. You might choose real estate or bonds. The point is, start small and learn as your money grows.
Thank you so much for this. I started investing late and still have so much to learn. Everything I have learned thus far has been on my own. Setting a bottom dollar on stocks is a great tip and one I need to start doing. I see I have a lot more to learn, but your words are very inspiring. thank you!
First of all, only buy what you truly need. We buy things with a credit card that offers the best benefit (points, air miles, whatever) and pay it off at the end of the month–our credit rating is extremely high; We also review our insurance policies annually and see if there is a less expensive one, or a way to lower our premiums; we track ALL of our assets quarterly on a spreadsheet and review to help determine changes in investments, etc, that are in order. The total each quarter should be increasing, and if not, there should be a reasonable explanation why it is not. Limit the “Stuff” you buy–buy mostly what you need, not what you want. For years, as we built our nest egg, we camped and hiked for vacations–now we could travel the world, but we prefer to guess what–camp and hike! Our vacations are still frugal in cost, but rich in experience. Finally, maintain a healthy weight and stay healthy–you will lower your health care insurance premiums, & health care excess charges. This one is HUGE (forgive the pun)
This is such valuable information and I really appreciate you taking the time to share it with us! Just this year we paid off all of our credit card debt, but I know we have a long way to go. Reviewing our insurance policies and tracking our assets have been on my to do list for awhile. With our kids we enjoy giving them experiences instead of material things. Thanks again for all this great information and I hope our assets start increasing each quarter in the near future 😉
Some people make money but are never truly wealthy. Wealthy people spend their money wisely and invest and are not necessarily into the latest craze or have to have the lasted phone model or brand name item to prove their wealth.
This is a very informative blog post with things that make sense to me because I have even been one of the people to look at a wealthy person wonder why they look like the average person. I wonder why they have on a plain white shirt or busted sneakers. The truth is wealthy people are not concerned about how they appear to others or they do not have to prove that they are wealthy.
Thank you so much for commenting. This made me so happy because I know this post may seem overly simplified or to some even disappointing, but you hit the nail on the head. I am not “rich”, but I have gone from being in debt, to now 6 (positive) figures in net worth. I have stopped caring about what others think of me (financially and physically) less and less and it’s very freeing.
This was truly inspiring to me, I really appreciate you sharing this with us. I too wish someone would have taught me when I was younger about saving and investing, this is why I teach my kids. Well i started late and through the years I have added most of my money I have spent and I can’t believe I have spent so much unnecessary money, then to top it off I spend over $1500.00 a month on rent and i do not own the house it’s a rental. If I had started saving in my twenties or even early I would have been more stable by now, but hey you learn from your mistakes which makes us wise. I’m now saving and i’m working on goal to invest my money.
Thank you so much for your kind words. Many of us make these mistakes, but it’s how you choose to fix them and move forward. I hope teaching my kids and those around me will at least make their lives easier. Best of luck!