7 Things Rich People Don’t Waste Money On

Oh what a joy it would be to be rich – to have enough money to buy anything we want! But building wealth doesn’t happen overnight – it takes time, and also has a lot to do with the decisions we make.

After all, there are only three things we can do with our money – spend it, save it or give it away. If we don’t waste our money, we have more to save.There are a couple of lessons we can learn from rich people about this, and quite a bit of research has been done into understanding what they do when it comes to money.

Here are some things they don’t waste their money on and you may be surprised!

1. Luxury brands and fashion trends
Buying luxury brands may make you feel like a millionaire but it is really worth it? While we may see celebrities on the red carpet wearing designer clothing, many of them actually just shop like everyone else for their day to day wear.

A R2000 pair of jeans can look just as stylish as a R400 pair if you wear it with a nice top and accessories.

Bill Gates once told Time magazine that he wears a $10 watch despite being able to afford a room full of Rolex watches. Keeping it simple means his money can be used better elsewhere.

2. Multiple credit cards
Credit cards are a big money waster in fees and interest and the more of them you have; the more you’ll be tempted to incur debt.
Only about 8% of rich people use more than one credit card, while 77% of poorer people do, according to Tom Corley, author of “Rich Habits: The Daily Habits of Successful People”.
Paying off your balance at month end also saves you interest, which is a great money waster.

3. Late penalty fees
Rich people make sure they never waste money on late payments or unnecessary interest, and set up automated payments on all their accounts from home loans, to credit card and insurance payments.

4. Impulse buys
Most of us think if we had all the money in the world, we could buy anything we see.

Rich people actually do the opposite – they generally are planners and if they are going to buy an expensive item, it’s carefully thought through and budgeted for, and not simply bought on impulse.

Buying on impulse leads to gathering stuff we don’t need and maybe even paying more than we should, as we didn’t shop around.

5. Cheap products
Even though many wealthy people don’t spend money on luxury brands, they buy quality products when they shop, according to Tom Corley. They don’t waste money on the latest fashion trends or cheap furniture but buy items that are durable and classic.

It may cost a bit more initially, but in the long run, it makes financial sense, as the item doesn’t have to be replaced.

6. An over-priced home
Even though they may be able to afford much fancier properties than the average person, wealthy people still want a bargain and will negotiate to get a good deal. Some just never waste money on an extravagant home, like billionaire investor Warren Buffet, who still lives in the same home he bought in 1958.

7. Lottery tickets
With around 1 in 20 million chance of winning the lotto in South Africa, wealthy people don’t waste money on this. Do the maths – spending R20 twice a week on Lotto tickets may seem like small change, but that adds up to over R2000 a year.

If you saved this instead, you’ll have a tidy sum of money after a few years.

Also, having a savings fund gives you financial security, instead of going through the highs and lows of hoping that Lady Luck will make you rich.

Small changes can lead to big outcomes so start today.
Rubies, which one do you agree with the most? Let us know in the comments section below.

This article was written by Sylvia Walker, financial planner, speaker and author of smartwoman. www.sylviawalker.co.za

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31 thoughts on “7 Things Rich People Don’t Waste Money On

  1. Chane W. says:

    It seems harmless. Take the lotto ticket for example. I never thought of it like that .just a little R6 or so but to add all of it up you realise how much it all adds up to at the end of the day. I’m definitely taking all of this into consideration next time I wane buy lotto tickets or even wane be in fashion. We also like to look good and have the latest fashion trends even when we know we can’t afford it at that time