Wealthy people can buy anything and everything they want, right? You might think that rich people
love spending money. But as it turns out, nothing could be further from the truth! Rich people know
exactly where their money is going, and they know exactly what not to do with it. They rarely waste
money on goods and services that don’t offer much in return. Therefore, this fascinating video,
uncovers several types of expenses which, unlike me and you, the rich prefer to avoid!
If you are new here, welcome and why not hit that subscribe button and join our community,
and as always guys, give this video a thumbs up, for that YouTube algorithm.
Now, let’s get into it.
11. Lottery Tickets If you genuinely want to become rich,
don’t play the lottery. The lottery is a guaranteed way to burn money fast,
and the rich simply don’t have a weekly habit of stopping at the convenience store lotto line.
Did you know that your chance of winning the Powerball grand prize is about one in 292 million?
Do not be fooled into thinking the odds are in your favor either. If you took time to do the
math, A Powerball ticket costs $2 which doesn’t seem like much. However, if you choose to play
for a year and decide to purchase two tickets each time you visit the store, you’ll have flushed more
than $400 down the drain! You’re probably shocked by these statistics but there are better ways
to make that $400 bring in sure returns. Don’t waste your hard-earned money on chance when you
can put it toward wealth-building goals, such as retirement or college tuition. And here’s a tip,
if you invest the same $416 each year, getting just a 5% return, in 30 years you’ll have $28,055!
2. TV channels and video games
Rich people never garnered their wealth by lazying around the couch and staring at a screen all day.
Those are average people’s hobbies that do more damage to productivity than good. It is such a
rare thing to find a rich person wasting money on jumbo TV packages or the latest video games.
According to 2015 data from Nielsen, adults in households with annual incomes below $25,000 spent
considerably more time-consuming media (through TV, video games, or radio), compared to adults in
households with annual incomes over $75,000. These findings proved that lower-income households,
had greater device usage compared to higher-income households. This checks out with Thomas Corley’s
book, Rich Habits. In the book, findings show that 67 percent of “rich” people say that they don’t
watch TV. However, do not mistake video gaming for leisure and gaming for work as a waste of
time. Some people are actually making great money from sitting behind a screen all day!
3. Impulse Buys We see millionaires drop
a ton of cash on ridiculous things all the time, but the smart ones are surprisingly frugal. Can
you believe Bill Gates wears a $10 watch? Warren Buffett also eats the same thing for breakfast at
McDonald’s every day and it never costs more than $3.17! The list could go on and on but,
one common thing to note is that rich people don’t get rich by spending it all.
Take these scenarios for instance. Have you gone into a store intending to purchase one thing
but come out with a cart full of stuff? Maybe it was buying one,
get one free at the grocery store, so you snagged a few extra items. Or perhaps it was a flash sale
on your favorite clothing website, and you bought designer shoes. Whatever the case might be,
this isn’t a shopping practice for the wealthy. Rich people are planners, and impulse purchases
tend not to mesh with this quality. Impulse spending leads to waste, overspending, and debt,
which are three things successful people avoid. They know better than anyone that
by being careful shoppers, they can achieve a lifestyle several levels up the income ladder.
4. Keeping up with trends Peer pressure or pressure from society to ‘keep
up’ can be real but the reality is that you do not have to get into debt just to stay up to date with
trends. Your friends, neighbors, or co-workers might have the latest quote-on-quote “must-have”
tech gadget, but that doesn’t mean you need one too. You will come to find that these people can’t
even afford these gadgets either and only succumb to the same pressure you are trying to avoid.
According to reports, a majority of American workers live paycheck to paycheck.
Wealthy people know that the idea of a well-lived life is subjective. You will come to find that
billionaires do not even own the latest iPhone, yet they can afford a whole store if they wished
to buy. Your personal reality is more important than public perception. Decide what you want
your life to look like now, and in the future. Don’t let anyone else make that decision for you.
5. Extended Warranties Somewhere along the line’
say if you bought a new 4K TV, you were probably asked, “Would you like to purchase an extended
warranty?” But according to Consumer Reports, a financially successful person has a simple answer
to that question: “No.” Although people want the most value from purchased products, generally,
extended warranties don’t give you more bang for your buck. In fact, according to Consumer Reports,
retailers keep 50% or more of what they charge for extended warranties. Extended warranties
just aren’t one of the things rich people buy. So, what do rich people do? They research and
you should follow their lead. For instance, check your manufacturer’s warranty before saying yes to
an extended warranty. You might have more coverage than you initially thought. Also, compare the cost
of potential repairs versus the extended warranty. You’d typically be better off putting aside the
money you’d spend on a souped-up warranty to cover future repairs yourself. So, the next time
a salesperson tries to sell you on that extended warranty, shut the conversation down fast.
6. Inflated Interest Rates The rich try to maintain a
great credit score to avoid high-interest rates on loans. Credit scores play a leading role in
determining your interest rate for auto loans, mortgages, and more. Just by having a higher
credit score, you can save hundreds or thousands of dollars in interest over the life of a loan.
People with substandard scores, however, might not be able to land loans at all.
Financially successful people keep their credit reports pristine by paying bills on time, keeping
debt levels low, and fixing mistakes on their credit reports. And if you already have a decent
credit history, but carry a balance on some credit card accounts, consider calling card issuers to
request a higher credit limit. A higher limit will reduce the percentage of available credit you are
using and could boost your score. The lower your interest rate, the faster you can blast balances.
7. Luxury brands You might see a lot of designer
labels on the red carpet, but many rich people don’t choose designer labels for every purchase.
Though they have the funds to splurge at luxury retailers, they understand that doesn’t always
mean they should. In fact, the founder of IKEA, Ingvar Kamprad, once told reporters
that he doesn’t wear anything that is not from a flea market to “set a good example,”
and Bill Gates confessed that he still wears a $10 watch despite being able to afford a closet
full of Rolexes. So, what do rich people buy? The answer can depend on the day.
For example, former first lady Michelle Obama donned her share of designer stuff.
But she was also seen boarding Air Force One and making press appearances while wearing dresses
from Target during her husband’s presidential tenure. So, if you want to emulate the habits
of rich people, stop and ask yourself if that $200 pair of designer jeans is really worth the
investment, or will a $30 discount store denim do the trick? These are the money tricks that can
save you over $1,000 a month! Always shop wisely, and keep your budget and financial goals in mind.
8. Junk food
This one hits home, but the next time you are out shopping ask yourself,
what are the chances of you catching a billionaire wolfing down kebabs, hamburgers, or french fries
from the “ready-to-eat” supermarket section? I bet it is highly unlikely. Rich people are literally
obsessed with healthy eating, and will do their best to incorporate these habits into their menu.
You’ll be shocked to find that 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.
They consume the same types of cereals and vegetables as we mere mortals do, but in a
much cleaner way. So, instead of having buns with your burger, why not just wrap it up with lettuce?
9. Bank Fees Like many businesses, banks charge
fees for their services. If you are wondering how you can simply bypass these fees then
you need to think like the rich. Banks require monthly maintenance fees for certain accounts.
Avoid such accounts for the sake of your wealth. A decent transactional account would do and will
save you the monthly stress of having to pay the bank fees you didn’t need to in the first place.
Research shows that America’s largest banks charged more than $11 billion in 2019
on overdraft fees alone, according to the Center for Responsible Lending. That’s not
even taking into account monthly maintenance fees, ATM fees, and other sundry charges!
10. An over-priced home Sounds rather hypocritical
considering the rich live in the most lavish homes around, but the catch is that they always
look for deals. The rich always want to feel like they’re getting the most value for their dollar
and not like they’re getting ripped off. Yes, they might be spending millions, but they’re
going to try to bargain with the list price like anyone else. Billionaire investor Warren Buffett
still lives in the Omaha, Nebraska house he bought for $31,500 in 1958. He shelled out
significantly more for his vacation getaway in Laguna Beach, California, purchasing the
3,588-square-foot home for $150,000 in 1971 which he ultimately sold in 2018 for $7.47 million,
such a hefty return on investment! The truth is, few homeowners will be as lucky as Warren Buffett
or hang on to homes for as long, and there’s no guarantee a home’s value will appreciate at all.
Just buy something within your budget and make it work for you. Also, remember to bargain!
11. Income Taxes
Do not boycott paying taxes simply because the rich can. Individuals that earn over $1 million
probably have employees like yourself who are already doing the due diligence. About 25% of the
richest Americans pay little to no federal income taxes. However, I am not sure if it’s a thing with
rich people or they are simply cunning about the way they run things. This has reignited debate
about the tax code and sparked an investigation by the IRS so the illegality remains unknown.
As we come to the end of this list, there are two things you’ve learned for certain about the rich:
They know exactly where their money is going, and they know exactly what not to do with it!
I hope you gained a few nuggets here, and again,
like and subscribe. With that said, have a fantastic week, and see you in the next one.