[Disclaimer: The information provided here is for educational purposes only and does not substitute for professional financial advice.]
A millionaire is a mindset, not a title.
Money is not a possession; it’s a feeling. If you understand the concept of money, you can be rich. Filthy rich!
It’s good to have money and the things that money can buy, but it’s good, too, to check up once in a while and make sure that you haven’t lost the things that money can’t buy.
— George Lorimer
That’s why most millionaires don’t feel the need to look rich. They internally feel rich instead.
“The Millionaire Next Door,” a book by Thomas J. Stanley changed my perception of wealth. A survey of over 1,000 millionaires mentioned in the book revealed common spending tendencies.
Though wealthy people can buy almost anything and everything, they don’t.
So, based on my research and learnings, here are 3 things people who’re good with money avoid buying at all costs.
1. They don’t blow money on luxury brands
Belonging to the “in crowd” has traditionally meant owning high-end goods like a Hermes handbag, a multimillion-dollar Bugatti, or an elegant Rolex watch.
It is, however, becoming less common among the ultra-wealthy.
According to a Business Insider article, the top 1 percent of earners in the United States have spent less on material items since 2007.
In one of his interviews, Bill Gates stated that his wristwatch costs a mere $10.
It’s no secret that Mark Zuckerberg favors normal grey t-shirts.
Millionaires and billionaires are focused on making the best use of money and accumulating it rather than spending them on pricey designer gear that doesn’t fit their lifestyle and mindset.
Instead of purchasing branded products, many wealthy people choose to spend their money on education, health, and wellness.
2. They don’t spend a fortune on traveling comforts
If you think most people sitting in business class airplane seats are filthy rich, you might be wrong.
Even if they have the financial freedom to pay more, rational individuals prefer to travel modestly.
For example, Ingvar Kamprad, the founder of IKEA, who had an estimated worth of $58.7 billion, believed traveling business class is an extra luxury. As a result, all IKEA employees travel in economy class and stay in low-cost accommodations regardless of their position.
Despite owning over $95 million, Daniel Radcliffe drives a Fiat Punto costing 20 grand.
According to the book “The Millionaire Next Door:”
“50% of the millionaires never spent more than $29,000 on a vehicle. They rarely lease new cars or buy expensive cars.”
Finance experts know that buying old is the best value and that maintaining the same automobile for a long time saves money.
3. They don’t buy mansions they can’t afford
Did you know that Warren Buffett has a residence worth only 0.001 percent of his overall fortune?
Mark Zuckerberg also lives in a home equal to 0.01% of his wealth.
Zappo’s chief executive, Tony Hsieh, resides in “Llamapolis,” a Las Vegas trailer park he built-in 2014.
Mansions are “traps that keep individuals from growing their money.”
Robert Kiyosaki, the author of finance classic “Rich Dad Poor Dad,” argues that luxurious residences should be viewed as a liability rather than an asset because they are expensive, and their value does not necessarily rise.
The millionaires know this fact, so they invest only in affordable homes. If they bought a mansion they couldn’t afford, their savings would die, and soon their luxury would convert into their biggest liability.
Living in an affluent neighborhood also means you’re more likely to imitate your neighbors’ spending patterns and less likely to build wealth over time.
People who live far below their means enjoy a freedom that people busy upgrading their lifestyles can’t fathom.
~ Naval Ravikant
So, being a millionaire is not about wearing branded clothes or traveling luxuriously. It’s also not about making your home a liability.
Having a million dollars doesn’t mean blowing it off on a white elephant.
The measure of wealth is freedom. If you’re living a stressful life despite owning millions, then perhaps, you’re not using it wisely.
Being a millionaire means understanding your true wants and living a lifestyle accordingly.
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