Showing posts with label rich people. Show all posts
Showing posts with label rich people. Show all posts

Thursday, September 24, 2015

5 Frugal Habits of the World's Richest People




Just because someone has accumulated a bank account that rivals that of Bill Gates doesn’t mean they spend like there is no tomorrow. Research and anecdote teaches that wealthy people, including the very wealthiest, are surprisingly frugal.
That’s not saying they're cheap. After all, there is a difference between being cheap and frugal. Frugal means being smarter and wiser at prioritizing your funds, finding the best value and making solid investments, traits that have fattened the bank accounts of the richest people in the world. They have so much wealth because they realize the real value of money.
Here are some of the frugal habits of the wealthy you adapt to build up your own hefty bank account.

1. They use coupons.

Surprisingly, households with average incomes of $100,000 or moreuse more coupons than those that bring in under $35,000. Celebrities including Carrie Underwood, Lady Gaga, Kristen Bell and Hilary Swank are just a few examples of wealthy individuals who are fans of coupons.

2. They live below their means.

The super rich are also known for living well below their means - even as far as cutting their own hair. One example of this is that they don’t see a vehicle as a status symbol. Instead, they realize that a car serves just one purpose; to get from Point A to Point B.
Sam Walton, the founder of Wal-Mart, famously drove around in a 1979 Ford F150 pickup truck. Walton’s son, Jim drove an older Dodge Dakota despite being worth over $16 billion. Mark Zuckerberg owns a modest $30,000 Acura TSX entry-level sedan, the 61st richest person in the world Azim Premji drove a Toyota Corolla, and Warren Buffett recently sold his 2006 Cadillac, which was noted for not being anything special, for a new model.
Many very rich people live in modest homes. Warren Buffett still resides in the house he bought bought for $31,500 in Omaha, Nebraska in 1958. Mark Zuckerberg, Tim Cook and Christy Walton all live in modest homes.
Ikea founder Ingvar Kamprad, Hobby Lobby founder David Green and former Microsoft CEO Steve Ballmer prefer to fly commercial, and even coach. Bill Gates was known to fly commercial for years. Azim Premji usually stays at company guest houses.
Finally, the wealthy don’t spend money on only luxury clothing. John Caudwell, an auto-shop owner who entered the cell phone business in 1987 and is now worth $2.6 billion, has stated "I don't need Saville Row suits” and "I don't need to spend money to bolster my own esteem.''
In fact, 74 percent of the super rich shop at Wal-Mart, while only 6 percent shop at Brooks Brothers.

3. They are charitable.

One of the more interesting habits that the rich have in common is their willingness to donate a vast majority of their wealth to a charitable cause. Zappos’ Tony Hsieh personally invested $350 million in theDowntown Project to improve downtown Las Vegas. Chuck Feeney, the co-founder of Duty Free Shops, has donated more than $4 billion to disadvantaged children and public health initiatives. Other wealthy individuals including Bill Gates, Warren Buffett, George Soros, Mark Zuckerberg, and Michael Bloomberg have donated huge chunks of their fortunes.

4. They value quality over quantity.

Wealthy individuals aren’t cheap, and certainly are not against enjoying themselves, but they put more thought into their purchases. For example, T. Boone Pickens has said,  “I don’t go cheap on anything, but I’m not a shopper. If I want something, I look at it, decide what it is, but it will usually be the best product. I’ve got a pair of loafers that I still wear that I got in 1957.”

5. They don’t carry wads of cash.

It’s been found that “86 percent of people who spend cash on luxuries like expensive cars, jewelry, and electronics are non-millionaires trying to act the part by purchasing luxury brands.”
Take the advice of oil mogul T. Boone Pickens and carry around only the cash that you need for what you intend to buy. According to Brad Klontz, a CFP professional and associate professor of personal financial planning at Kansas State University, the rich are often "money vigilant.” They avoid credit debt, and “are more anxious about making sure they have enough money and are managing it well.
Murray Newlands

Wednesday, April 22, 2015

9 things rich people choose to do that poor people don't

                                        Rich people think differently

The richest 1% of the world currently control 48% of the world's wealth.
The top 80 wealthiest people in the world control approximately $1.9 trillion, which just so happens to be the amount controlled by 3.5 billion people on the other end of the spectrum.
Can you believe that? There are 80 people in this world that collectively share the same amount of money as 3.5 billion people!
Global inequality continues to be a hot-button issue with many of us as we realize that we're in the bottom 99%. In fact, the Occupy Movement originated in 2011 for this very reason.
Many individuals who did not have wealth were disgusted by the richest 1% who "are writing the rules of an unfair global economy that is foreclosing our future."  
Is this true? Are we victims? Or are we all just too chicken to create wealth on our own, and therefore demand a handout from those that earned it with their blood, sweat, and tears?
While many of us would like to believe that each one of these 80 wealthiest people inherited their wealth, in actuality only 11 did.
The other 69 have built their immense wealth from very little. Look at Warren Buffett, for example. He grew up as a middle class child, but got addicted to the world of business and investing at a very young age.
Today, he is worth $72.3 billion (with a "b"). Nobody gave him this money. He earned it because he has always taken actions like the rich would and avoided the actions of the poor.
Since he has so much wealth, should he be required to give his money to the rest of us just because we haven't become as successful? I don't think so.
Instead, we should all be studying the things the rich do and should be actively doing them ourselves!

Rich people believe they deserve to be rewarded for their achievements.


1. The rich believe in the law of income.

The rich believe that they will be paid in direct proportion to the value that they deliver to the marketplace. In other words, if they are integral in forming a product that nearly everyone in the world wants/needs, then they should be compensated accordingly.
I personally know the inventor of the self-dimming rear-view mirror, which is now in almost every car in America. Do you think it would be fair to only pay him $15 an hour for the time he put into this invention? Or, since his product has been an amazing success, perhaps he should receive a portion of the proceeds from each sale? I believe in capitalism and am a big fan of the latter.
Poor people believe that we should all be paid the same amount, regardless of the outcome that we produce. With this mentality, innovation would likely cease to exist and the poor would still be poor, and on top of this everyone else would be poor along with them. I don't know about you, but this is not the future I want for my children.
assassins creed obstacle course sdcc 2014Casey Rodgers/Invision for Ubisoft/AP Images

Rich people see past the obstacles.


2. The rich focus on opportunities, not obstacles.

There once was a shoe salesman that found himself in a far-away country, trying to sell shoes to the natives. The only problem was, nobody there wore shoes and the sale was often quite difficult. The salesman soon gave up in frustration and decided to leave the area. On his way out, he met another shoe salesman. "Don't bother entering this town," said the first salesman, "These people don't even wear shoes." The eyes of the second salesman grew wide, "No one has shoes?? Then I could sell a pair to everyone in town! How fortunate we are to stumble upon an untapped market!"
It's all a matter of perspective. The poor often see obstacles and quickly give up, while the rich see the the opportunities and enter arenas that many wouldn't dream of.
warren buffett bill gates ping pongREUTERS/Rick Wilking

Bill Gates and Warren Buffett are friends who speak highly of each other.


3. The rich associate with positive, successful people.

Rich people know that attitude is everything. If they continually hang out with people that complain about the weather, bad-mouth the government, and speak negatively about the state of the economy, then they will likely start doing the same thing! If, however, these same people start hanging around individuals that continuously talk about success, opportunity, and the positive things in life, chances are that they will see the world from an entirely different perspective!
Instead of the world being a terrible place to live, it suddenly becomes a glowing land of success and opportunity. A great example of this is United States citizens vs. immigrants into the States. Immigrants are 4x more likely to become millionaires than those of us that grew up here. The main reason? We talk about the negatives of living in this nation, while immigrants see it as the land of opportunity. Quite frankly, it is what you make of it.
Elon Musk TeslaAPCEO of SpaceX Elon Musk is well-known for his talents.


4. The rich are willing to promote themselves and their value.

Rich people aren't afraid to tell you what they're great at. Most of the time, they aren't embellishing. It's the truth. Poor people might be great at many things, but they always seem to downplay them into nothing (either because they think negatively of salespeople or because they're not confident in themselves). Therefore, you assume their skills are just that — nothing. If you want to be wealthy, you must learn how to become a salesperson and at the very least, sell yourself.

Rich people keep at it until they've defeated their problems.


5. The rich grow bigger than their problems.

The poor see a problem and they chalk it up to bad luck and quit trying. The rich run into problems and might scratch their heads for a while, but they don't give up. They'll work and work until they discover a solution to the problem so they can win in the end.
A few years ago I heard a compelling story that fits this idea perfectly. There was a plot of land for sale that had always been classified as "residential." Many investors in the area knew that the value of the property would be worth 25 times the selling price if the property were commercial, but many had tried and failed at this appeal, so the property remained for sale at a severely discounted price.
But then one brave woman took on the challenge. She purchased the property, hired a team of lawyers, and after a few months of painstaking efforts, was able to get the land classified as a commercial property. Even with the cost of the team of lawyers, she earned 20 times her investment (in just a few months mind you). By tackling and overcoming the problem, she became a very wealthy lady.

The rich think of ways to have it all.


6. The rich think 'both,' the poor think 'either or.'

Economists came up with the term "opportunity cost" long ago. Put simply, this means that if you choose one thing, then you are ultimately forgoing something else. In other words, if I have $5 and I buy an $5 ice cream cone, then I am ultimately giving up that pack of gum that I wanted as well.
This is how poor people think too. They have a set amount of money and they think that they can either spend it one thing or another, but not both. It sounds logical, doesn't it? But the rich focus on how they can get both.
Following along the same lines as the example above, let's give a rich person $5. They too want both ice cream and a $5 pack of gum, but instead of thinking either or, they decide to go for both. To do this, the rich mindset would not buy the ice cream or the gum initially, but might instead buy a 24 pack of water for $5. They walk down the road a ways, sell each water bottle to passers-by for 50 cents and earn a total of $12. Now they can enjoy their ice cream, gum, and still have $2 left to spare! The rich have a "both" mentality, not "either or."
man relaxing in lawn chairDan Kitwood/Getty Images

The rich know it's what you're worth, not how much you work.


7. The rich focus on net worth, not working income.

Poor people often talk in terms of hourly pay, whereas wealthy people know that an hourly income is not nearly as important as someone's net worth. One can earn quite a lot of money per hour, but if they don't learn to keep any of it, they will still be broke in the end. The rich person knows that a large net worth will net many opportunities and will create more wealth in the future.

Rich people continue to educate themselves.


8. The rich constantly learn and grow.

Many kids today think that they'll be able to work just hard enough to earn their degrees, and then they won't have to pick up another book for the rest of their lives. They might turn this dream into a reality, but they'll likely be poor forever.
The rich starve for knowledge because they know that the more they learn, the more likely they are to succeed. The average millionaire reads one nonfiction book a month because they want to grow themselves into the person that they want to be. The average broke person will read nothing and will never change. As I like to say, "the rich constantly learn and grow, and the poor think they already know."

Rich people don't shy away from the hard path.


9. The rich don't mind taking the hard road.

The poor often stay poor because they take easy road after easy road, until they find themselves in bum-town. As an example, one person might have the option to work at the local grocery store for $8 an hour and could learn from the very wise businessman that owns the place. But instead, this person decides that making $8 an hour is for chumps and they start dealing marijuana for $200 an hour instead. The hard road could have made them into a successful business person, but they instead chose the easy road and eventually got addicted to drugs and ended up in prison.
The wealthy don't mind taking the hard road because they have a long-term mindset. The current life might be difficult, but they know their actions today could benefit them tremendously in the future, so they trudge along and keep their eye on the future prize. By staying focused and doing the things the rich do, many of them will become successful and wealthy as well.
This post originally appeared on Life and My Finances.

Derek Sall