5 Things Wealthy People Don’t Do

When we usually talk about personal finance, we talk about playing offense. How much money can we earn? What’s the best ROI can we get? Is there a way to contribute to both a solo 401(k) and an employer’s 401(k)? But what about defense? Sometimes it’s just as important to know what to watch out for as to what to aim for. What are the things we should avoid?

 

To answer that question, I find it’s best to look at what the wealthy don’t do. We need to stay away from this stuff ourselves if we want to become wealthy…

 

1. We Must Not Fail to Wait if We Want to Become Wealthy

 

Most investments have potential because of the time you can give them. Not active time, just passive. Most investments need years to pay off – mutual funds, ETFs, new businesses, etc. Those who are wealthy know that it’s a long path. Endless commitment is necessary. Talking about action is cool but often the wealthy got that way because they know how to harness patience.

 

It takes years to become an overnight success. I know it’s easy to measure someone’s success by where they are at this present time. But the man you see in the Ferrari has likely been dreaming of own one for decades.

 

2. Failing to Question Everything Is Not Something the Wealthy Do

 

Some people coast through life without questing things like buying a new car every few years, buying new clothing every month, living in a certain neighborhood, using Crest toothpaste, etc. But the wealthy among us challenge everything. By challenging things, you’ll know you’re not throwing money down the drain. And that’s exactly what is happening when you throw money around mindlessly.

 

Nearly all of us are guilty of this at some point. It’s usually because our parents spent money in a certain way. We feel obliged to do the same. But what’s important is that your values are not necessarily the values of your parents. You may also not yet have as much money as your parents did when they instilled those spending habits on you.

 

To get started questioning everything, look at your bills. Could you slash them while still remaining just as happy? Probably. It’s definitely worth looking into.

 

3. Paying Too Much in Fees Is Not Common Practice of a Wealthy Person

 

The only thing for certain about investing in the stock market is there will be fees. And fees are the only thing you can control. Thus it’s important to know what you’re paying.

 

Get your fees as low as possible. There are many tools available to compare fees between different funds. Look at load fees, expense ratios, annual fees and anything else your funds may charge. Many investors prefer firms like Vanguard which are known for their low fees.

 

You can also bet wealthy people don’t pay much in the way of overdraft fees, parking tickets and the like. They watch their money. Yes, in Hollywood movies it looks like the wealthy just throw money around. But in reality, wealthy people watch their money and don’t dish it out unnecessarily.

 

4. Care About Others Before Themselves – What the Poor Would Call “Selfish”

 

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No one cares about you more than yourself. Plain and simple. So if you don’t care for yourself financially – no one else will – at least not if you can help yourself. And no one else is capable of helping you more than you are capable of helping yourself. And if, say, you have a partner that’s the bread winner while you make a pittance, the relationship will likely be unfair. And ask any relationship expert, an unbalanced relationship does not last long. Like an engine that’s out of balance. It will soon self-destruct.

 

Our natural instinct is to save ourselves first. And why is this so deeply ingrained? Because if we don’t save ourselves, we can’t help anyone else. Think about it.

 

There are many parents who put their children’s finances ahead of their own. But what eventually happens is while the parents are busy paying for college, they neglect to fund their retirement. Once the kids grow up, they must pay for their parents’ expenses then. That or the tax payers must step in and pay for their care. So is anyone better off? No, not really. Had the parents funded their retirement first, the children still would have made it through college and the tax payer and parents would still be doing fine.

 

It sounds selfish but wealthy people think about themselves first. Then though, they can become quite charitable.

 

5. Driving Isn’t What Rich People Do

 

Driving is expensive and this topic doesn’t get as much attention as it perhaps should. Yes, driving is necessary for many people. But doing it without good reason is a hazard to your finances. First off, if you drive a lot, it’s time spent not earning money. You’re really just sitting. Since wealthy people’s time is valuable – they hate wasting it. Time is money. Think about it. If someone makes $200 per hour, commuting one hour per day means they essentially lose $200 per day. Losing $200 per day is akin to losing $50,000 per year!

 

Furthermore, there’s the cost of fuel or electricity. There are also maintenance costs. There are insurance costs as well. Even insurance can be more expensive if you drive a lot. Since this spending category is expensive and it can be reduced by quite a lot, you may want to re-evaluate your own driving. Is it too much? Be honest.

 

Here are some tips to limit your driving:

 

  • Shop online
  • Combine trips around town. Cars burn the most fuel before they are up to temperature. This means if you can condense the use of your car to only a short period of time, you will save a lot of money on fuel.
  • Remember that it costs serious money to operate your vehicle. It’s a lot more costly than just fuel.
  • Appreciate that driving is dangerous and each time you get behind the wheel, you are assuming risk.
  • Get environmentally conscious. Sometimes we need to fight for a cause greater than ourselves.

 

Final Thoughts

 

As you can see, wealthy people are wealthy because of the distinct lifestyle they live. Most people focus on what millionaires do but it’s equally important to think about what they don’t do. Just like in sports, it’s important to focus on offense as well as defense if you want to score the most points possible. How does your scoreboard look?

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