If you have been trying to pay off all your debts and start saving, but nothing happens, then it’s time to review your attitude to spending. All successful people – businessmen, investors, billionaires, – combine a very pragmatic attitude to spending.
1 Impulse purchases
Here’s something that happens to all of us: we see a pretty but useless thing being offered at a discount, we buy it, and then we come home and regret our decision. All too often, we spend money on impulse purchases which is what distinguishes us from rich people, to whom buying an extra pair of jeans holds little attraction. As billionaire Warren Buffett once said, ’If you buy things you don’t need, soon you will have to sell things you need." An effective way to avoid unnecessary spending is to make a shopping list before going to the store.
2 Expensive real estate
Buying luxury houses at inflated prices is a dubious investment. That is why rich people prefer to buy promising real estate while it’s still cheap to make a profit later on when its price skyrockets.
3 Clothing and footwear from high-end brands
Rich people can afford luxurious and expensive clothes from the newest and trendiest designer collections. However, if their life doesn’t involve frequent social events, they prefer to steer clear of such purchases. Remember how Steve Jobs used to dress? Similarly, Bill Gates’ watch costs $10; and Russian billionaire Roman Abramovich is perfectly okay with appearing in public wearing bargain basement t-shirts. Even the wife of the heir to the British throne often goes out sporting mass market outfits!
4 Representation expenses
Basically, this encompasses the costs of making oneself seem rich and successful. Or to put it even simpler — of throwing dust in other people’s eyes. We’re talking about luxury banquets, business class flights, and new cars. People who want to appear richer than they really are, spend huge sums to this effect. On the other hand, the truly successful ones often lead very modest lives. For instance, Ingvar Kamprad, the founder of IKEA, always flew economy class and drove an old Volvo. As for the Queen of England, Elizabeth II — she saves electricity at her Buckingham Palace residence.
5 Psychics, mystics, and fortune-tellers
According to research, for the most part, fortune-tellers’ clientele is made up of people with low analytical skills. At the same time, logical thinking is probably the key quality for achieving wealth and success. Besides, high-achievers tend to believe in themselves — they simply don’t need any otherworldly assistance!
6 Buying your kids lots of fancy toys
People with average incomes often pamper their kids, buy stuff on their little ones’ slightest whims, filling their rooms with trendy new toys. Now, if millionaires behaved in the same fashion, their children would literally be drowning in toys and gadgets! However, well-to-do people prefer reasonable expenses and don’t buy their offspring a new doll or playset just because it’s being advertised on TV.
7 Loans, fees, and penalties for late payments
Rich people don’t take out loans and never lose money on fines, penalties, and commissions for one simple reason: they always pay everything on time, avoiding delays. As billionaire investor, Mark Cuban said, ’If you use a credit card, you don’t want to be rich."
8 Latest versions of popular gadgets
A wealthy person will not rush out to buy the latest model of a trendy smartphone or watch even if his or her gadget is out of fashion, time-worn, or obsolete. Millionaires use different reasoning when it comes to making purchases: they ask themselves whether the expenditure will be worthwhile at this particular moment. As for electronic gadgets, they become outdated and depreciate in value way too quickly!
9 Extended warranty
It’s the people with modest incomes who usually accept extended warranty offers when buying new equipment. They worry about the possibility of the gadget breaking down and as a result, choose to overpay to be on the safe side. In fact, this is hardly necessary; according to U.S. News Money, manufacturer warranties are more than enough.
10 Junk food
The most important difference between a millionaire’s daily menu and that of a person with a modest income is not in the cost of products. Rich people are literally obsessed with healthy eating. They might be consuming the same types of cereals and vegetables as we, mere mortals do, but you wouldn’t catch a billionaire wolfing down kebabs, hamburgers, French fries, or mayonnaise-rich salads from the “ready-to-eat” supermarket section.
11 Additional education for their children
People with an average income often hire various home tutors for their kids. Some do it hoping to reveal the child’s hidden talents, which will serve as his or her ticket to a happy, prosperous life. Others think that the tutors will help the child achieve better grades at school. As for rich people — they know from personal experience that excessive tutoring has little to do with achieving financial success. So they allow their little ones more free time to enjoy childhood.
12 Personal development coaching
Low-earners with lousy careers and private lives are the main targets of unscrupulous life and business coaches. Many words have been said about the uselessness of such training sessions, especially in connection with Tony Robbins. His seminars earn him millions thanks to high ticket prices and the fact that there’s still no shortage of those who want to pump up their social skills. Before spending your money on various motivational courses, take a look at the biographies of famous billionaires: it is unlikely you will find a single story of a person getting rich by listening to overhyped lifestyle gurus.
13 Trendy interior design
New types of furniture and interior decor appear in shops on a monthly basis. As a result, middle-class people spend lots of money, trying to follow the latest trends in house decor. Unfortunately, such design solutions tend to become outdated in just a couple of years’ time. All of a sudden, no one uses floral wallpaper anymore, and bright geometric patterns are all the rage. Time to redecorate everything! But before you do that, make sure to study a few photos of rich people’s home interior. Quite often, when looking at successful individuals’ homes, you can’t guess how old the owners are. Painted walls, whitewashed ceilings, and wooden or tiled floors: the rich adhere to perennial, century-tested options!