The attitude of poor and financially successful people to spending is radically different. What the first is willing to take a loan for, the second simply does not need. After all, rich people know very well what expenses are paid off and what are not. Here are 13 things that you don’t have to invest in at all.
A pragmatic approach to money helps people become billionaires is no secret. If you analyze what the world’s most successful businessmen usually spend their money on and what expenses they avoid, you will be very surprised. Some things that have long been considered attributes of luxury life, they do not need at all. But people are not rich, on the contrary, it seems that such a purchase or investment will bring them closer to luxury.
What kind of spending is usually unnecessary?
- Shopping with emotion
Discounts, sales, stocks – all this hypnotically affects some people, forcing them to buy completely unnecessary things. It is unlikely that you will really need another black pants or two packs of chips for the price of one. But this spending will separate you even more from the cherished million. Warren Buffett, a famous billion-dollar investor: “If you buy things you don’t need all the time, one day you’ll have to sell the things you need,” and that’s the whole point of impulsive spending. To avoid them, always make a shopping list for a month or before going to the store.
- Expensive real estate
If you buy real estate at an inflated price, you are likely to just become the owner of a good home. Buying an inexpensive, but promising, in the future you will be able to make good capital on it. That’s what competent investors usually do.
- Extended warranty
Worried that expensive equipment will spoil, owners of modest income often buy extended warranty and overpay. Secured people are confident in the quality of what they buy, and know that the standard warranty from the manufacturer in most cases is sufficient.
- Luxury items in the wardrobe
Daily wear expensive branded clothing and shoes are usually loved by people with not the highest income to improve their status. And famous businessmen, owners of multi-billion-dollar corporations, celebrities and members of royal families feel quite comfortable appearing in public in simple outfits from inexpensive brands.
- The latest smartphone model
The joke about students taking credits for the latest version of the gadget has long ceased to be just a joke. And a wealthy man will think a hundred times whether he needs a new technique right now, whether it will justify its overestimated cost. After all, prices for gadgets are falling rapidly with the release of more and more new models, which allows for good savings.
Speaking of loans. What distinguishes a financially secured person from a less successful one in the first place is the attitude towards accounts. Wealthy people try to plan expenses correctly, to do only with their own funds and pay for everything on time. That is why they do not collect loans, do not overstay their accounts or pay extra fees. As billionaire Mark Cuban remarked: “Using a credit card indicates a reluctance to be rich”.
- All the wishes of children
To indulge your children is not bad, if it does not grow into indulgence of absolutely all childish desires. Kids will always want a new toy, and older kids – a new fashion gadget. A wealthy person and in this situation will weigh everything and decide whether to buy their money, or it’s just another whim.
- Fast food
The main consumers of fast food are people with low incomes. Successful people prefer the right food. After all, it allows you to prepare delicious nourishing dishes from simple, inexpensive ingredients. And to eat properly at McDonald’s, you have to leave a round sum there.
- Expenditures on image
No matter how much middle income people try to raise their status with the attributes of “luxury life”, it never succeeds. Beautiful banquets, business class in an airplane, precious dishes, limited accessories and other optional luxury – if you spend the last money on it, just to dust someone in the eyes, you will not become rich. Even the inhabitants of Buckingham Palace save energy. And many successful businessmen and politicians move around in inexpensive cars or economy class. Modesty, where it is possible, allows them to save huge sums on something more important.
- Luxury design
There is nothing more pointless than investing in an expensive interior space and constantly updating it to follow the latest trends. Especially since all this gilding, monograms and the like are absolutely impractical. Rich people strive for comfort and simplicity. They choose natural materials, quiet colors, textures and practical solutions that will not go out of fashion for years.
It’s not about education in general, of course. And the cost of additional classes and tutors in general subjects for the sake of admission to the best university, education in this very university only because of its prestige (including the purchase of a diploma) and other expenses that allow you to gain knowledge, but not the ability to apply them. After all, “crust” very rarely opens the way to wealth. Children of millionaires study in ordinary schools, and they themselves, as a rule, have graduated from an ordinary university or did not have higher education at all. Therefore, a successful person is more likely to spend on a good narrow profile courses on what he is really interested than trying to learn everything in the world.
- “Higher Powers”
It is difficult to imagine the leader of a leading corporation advising a fortune-teller or an oracle where to invest another million. No, such people rely only on their own analytical skills, their own and someone else’s experience, solid facts. Superstition, belief in predictions and some higher power that should give the right answer – usually it is inherent in insecure people. And uncertainty and financial well-being are incompatible.
- Life and business coaches
All these coaches, who promise to reveal the secret of wealth in just one lesson, really know how to make money. On gullible clients that pay them to listen to the same “water”, retold a thousand times, or the facts lying on the surface. No known billionaire has learned how to multiply capital in such trainings. And truly brilliant individuals share their secrets for free, for example, in interviews. Because they know that it is impossible to repeat someone else’s success, but they can be inspired and find their unique way.
From these seemingly insignificant habits, a whole worldview is formed, which distinguishes successful people from those who all do not manage to make money. To become successful, you need to start with simple changes: abandon unnecessary spending and learn to save money on more important things.