When it comes to being frugal and saving money, there are a group of people who do it better than all of us. And they’re called ‘the rich’. Affluent and successful, the rich are able to master their money and grow it even more year after year.
What’s their secret? And what can we do to live like them? Here are 10 unexpected ways the rich grow their money:
‘The rich’ are able to master their money and grow it even more year after year.
1. They make smart choices
The rich stay rich because they are wise when it comes to handling their money. They follow a strict budget. They track their spending. They save and invest. All these little things, in due time, can accumulate to big wealth and more savings.
Here are a few things you can do to get the ball rolling:
- 1Have a frugal mindset.
- 2Analyze what’s a ‘want’ and a ‘need”.
- 3Pay off bad debts.
- 4Get insured.
2. They don’t keep up with the joneses
Always plan your purchases to avoid emotional spending.
Stop comparing yourself to your instagram friends or your lavish neighbours. Just because Sally and Tim bought a brand new car doesn’t mean you should too. Emotional spending can lead to debt, overspending, and even more debt. Instead of comparing, have personal goals that are attainable and realistic.
Want to stop emotional spending? Try these:
- 1Don’t spend too much time on social media.
- 2Reflect and wait a few days before considering a huge purchase.
- 3Don’t visit online retail sites frequently.
- 4Always plan your purchases.
3. They only buy what they need
Do you really need to buy a new car? Can you really not live without your monthly magazine subscription? The truth is simpler than we all think. We spend so much money on stuff we don’t actually need. Need is different from want. Only buy what you “want” when you can afford it.
Shop smart. Don't buy unnecessary things just because they're on sale.
Want to “shop smart?” Try these tips:
- 1Shop with a goal in mind. You went to the store to complete an objective!
- 2Don’t be tempted to buy an item just because it’s on sale.
- 3Don’t buy anything until you’re 100% sure you need it.
4. They buy quality products not luxury products
Price doesn’t always mean quality.
It’s not about being cheap, it’s about being wise. Wise thoughtful purchases can save you a lot more. A good quality mattress can last you 10 years compared to a mattress half the price but will only last you 2-3 years. That being said, price doesn’t always mean quality. You don’t need a $5,000 designer watch if a $10 watch can tell time just as well.
How can you make sure you’re buying quality, original products and not fake imitations? Check the ingredients and labels. Read the reviews and only buy from trusted brands.
5. They always have a passive income stream.
Apart from their job or current business, they have several income streams that allow them to passively earn money even when they’re sleeping. Stop trading time for money. The moment you realize that, it will be easier to find opportunities for passive income.
With passive income stream in place you can earn money in your sleep,
Here are a few good ideas you can try:
- 1Start a passion project from your hobby and turn it into a business.
- 2Start writing. Publish a book or e-book and make money through royalties.
- 3Start a YouTube channel and publish vlogs or educational videos about your interests.
- 4Sign up for a passive income course like this one to find new ideas.
6. They live below their means
Cut meaningless expenses you can't afford.
This means cutting expenses you can’t actually afford. Choosing a roommate instead of living in an apartment by yourself. Living below your means will eventually make you feel less stressed, more responsible with your money, and considerably richer.
Here are a few quick tips on living below your means:
- 1Stop relying on your credit cards.
- 2Track your spending and cut meaningless expenses.
- 3Be content with what you have.
7. They don’t hoard stuff, they sell what they don’t need
Look around your house and see how many things are currently of no use to you but can be of use to other people. Organize and put them all in a box. Sell them for profit.
Looking to make a few bucks? Try selling stuff you’re not using!
- 1De-clutter your home and sort out your collection.
- 2Look at your items retail value and used value before determining your price.
- 3Open seller accounts on online marketplaces like Amazon, eBay, and Craigslist.
- 4Be upfront with shipping and handling.
- 5Take great pictures of your items and describe them well. They’ll sell faster!
8. They keep things simple
Simple living can make you rich if done consistently. If you want to have more money to live comfortably, start living as minimal and as simple as possible. Eat at home instead of going out for dinner. Use free entertainment instead of monthly subscriptions and sold media. Quit your addictions (smoking, drinking, video games)
Eating at home instead of going out for dinner every night will cut your expenses considerably.
9. They focus on big savings
Rich stay rich because they don't splurge on cars or houses even when they can afford it.
No, you won’t get rich collecting coupons or skipping that $5 starbucks coffee. The rich make money by focusing on the big things. They don’t splurge on cars or houses. Even when they can afford it. Take Warren Buffet, for example. Buffet still lives in the home he bought in 1958. The rich are rich because they don’t spend millions on houses or cars they can’t afford.
Want to start saving? Try these:
- 1Buy or rent a smaller house.
- 2Drive used cars or use public transportation if you can.
- 3Use your bike often when going places.
- 4Keep a grocery stash and shop twice a month.
10. They invest
The rich make money by making their money work for them. Sounds silly right? But it’s true. Billionaires get their billions by being smart and knowing the right thing to do with their wealth. Money can give you money if you know how to invest.
Want to start investing?
- 1Learn different investing strategies (real estate, stocks, crowdfunding, etc.)
- 2Ask for help from a financial advisor or take a course online.
- 3Take a look at some of the best selling investing books. (Like this one!)