Rich people have a lifestyle that is different from the common individuals. A major reason for this difference is their ability to earn a lot of money. A rich person’s lifestyle can be defined by a huge house, multiple cars worth millions, expensive clothes, and a jet-setting billionaire living a life full of luxuries and pleasures.
Have you ever wondered how rich people live their lives? Now let me clarify, I’m not talking about small income. I’m talking about Bill Gates and other billionaire classes of society here. Who else could afford to buy hundreds of pairs of shoes? Or start a charity and spoil a poor kid for life? As you might have guessed, there is more to the rich than just salary and personal wealth. So if you want to know how to get rich here it is:
Avoid debt like the plague
I haven’t paid any interest in years – since we paid cash for our current house. Even during the 10 years or so leading up to that point we never carried a credit card balance. We also paid cash for all of our cars in recent years. Interest on debt can be a huge destroyer of wealth.
Track every dollar spent
I can tell you exactly how much I spend on dining out each month, and on groceries, and gas – in fact in every category. Most I know off-hand but those I don’t I can quickly access within a few minutes. Quicken is my go-to tool for budgeting and tracking expenses.
I’m heavily invested in the stock market – and in stocks specifically
The risk of not owning stocks (holding cash or too many bonds) can be a large hindrance to growing wealth faster than inflation. I have a diversified portfolio, but I don’t actively trade my investments. My investment philosophy is buy-and-hold, which has worked out very well for us over the long haul.
Have a large emergency fund
More than the standard 3–6 months – because I never want to be in a situation where I need to liquidate investments during a downturn in the market. Our emergency fund is probably a bit bigger than it needs to be, but right now we are in a transition season of life. My wife and I are early-retired (our mid-40s). Having large cash reserves gives us options while we transition into this next season. I suspect that sometime in the next year we’ll deploy a lot of that cash into stocks and bring the reserves down to around 9-12 months of living expenses.
We used to live in a $1m+ waterfront house (that I loved) but made a conscious decision to downsize. We sold that and moved into a house that we bought with cash with the equity in the waterfront house. I miss being on the water, but it was a smart financial move. Having such a large amount of money tied up in personal real estate isn’t what we felt was the best use of those funds. Now our taxes, utility, and maintenance costs are all lower – and it is much faster and easier to clean the small house (bonus!). Not only did we free up cash that would have been tied into a living expense but we lowered ongoing living expenses substantially.
Always keep learning.
Much of Warren Buffett’s success came from the fact that he was always learning. The common wisdom that it takes at least 10,000 hours to be an expert at something applies to business as well. Buffett didn’t get lucky in his investments. He constantly learned what makes businesses grow, how to get struggling businesses out of trouble, and how to protect his investments.
This applies even if you hold a traditional office job. Yes, connections and politics can get some people ahead faster, but at the end of the day, you can’t grow if you aren’t good at what you do.
Live below your means.
Mark Cuban is always telling the story of how he spent much of his twenties living in a small apartment with multiple roommates. Frugal living isn’t just about saving money.
When you have extra income and savings, you have more freedom to grow. Instead of taking a dead-end job that eats most of your time, you’ll be able to take more risks and take advantage of opportunities that might not have an immediate payoff.
You’ll also be better focused. Instead of worrying about your bills or if your car is impressive enough, you can simply focus on growing.
Don’t be afraid to get dirty.
As you start to climb the ladder, don’t start to think that certain tasks are beneath you. When Marcus Lemonis invests in a business on The Profit or privately, he gets hands-on and works side-by-side with the staff.
Lemonis cites this as the biggest reason he can quickly learn about so many different types of businesses. Working in the trenches creates a much faster learning curve than trying to learn from above. It also builds camaraderie and respect between leaders and employees.
4. Don’t sleep so much.
Donald Trump has always been a controversial figure, but he almost always accomplishes his goals. He credits this to sleeping just three or four hours a night. That gives him almost a full additional working day each day compared with someone who is sleeping eight to ten hours.
Of course, you also need to keep healthy sleeping habits. Trump claims exhaustion doesn’t affect him. If you need more sleep to function, don’t keep yourself awake to the point of constant tiredness. It’s about finding the right balance.
Seek forgiveness, not permission.
When Bill Gates was in middle school, computers were expensive to operate, and each student only had a limited amount of computer time. Gates found bugs that allowed him to stay on the computers even when his time had run out. When he was finally caught, he traded his ability to find flaws in the security systems for more computer time.
While you never want to outright break the law, many people become so caught up in the idea of needing permission that they never take risks.
Oprah Winfrey says that the secret shared by people who seem to have it all together is that they are organized. This includes all areas of life, from keeping your home and office free of clutter and distractions to how you go about your daily tasks. Plan out what you need to do each day, set time limits on things like answering emails, and budget your time so that you can work on your most important tasks when you are best able to focus.
Stay focused through failure.
Succeeding is easy. It’s what you do when you inevitably fail that defines you. Part of Kevin O’Leary’s “Mr. Wonderful” Shark Tank persona might come from the fact that he faced heavy opposition early in his career. His business partner told him he was unfocused, and the New York Times and Wall Street Journal openly criticized his business dealings to undermine him.
O’Leary took in feedback to the extent that it was constructive but dismissed everything else as background noise. His laser focus led to him being able to sell his first company for $4.2 billion.
Keep personal feelings out of business.
Lori Greiner, Shark Tank’s “Queen of QVC”, tells her entrepreneurs to leave personal feelings out of business. You don’t need to like someone to take their money or get a good deal on needed inventory. Simply focus on how much money you can put in the bank.
Of course, you shouldn’t ignore your gut. There’s a difference between someone being dislikeable and someone being dishonest. If you feel that someone is withholding information, not telling the truth, or not keeping their promises, reevaluate your relationship from a business perspective.
5 Extremely Rich People Who Live Way Below Their Means
There is a good chance that you have spent at least a few moments in the past little while thinking about what you would do if you won a ton of money. Many of us think about big houses, fast cars, yachts and more. However, there are people in the world that proverbial “ton” of money but don’t spend it in the ways you would expect. While these people have more money than most of us will ever see, they still live like regular people. Read on to learn about 5 extremely rich individuals who live far more frugally than they need to.
With a net worth of over $70 Billion, Buffett is one of the single richest people on the entire planet. His role as one of the most admired investors in the world and the chairman of Berkshire Hathaway has granted unbelievable wealth. This is a guy that could pretty much do anything he wants, but he decides to live frugally. He still lives in the home he bought over 50 years ago for a modest $31,500. He also doesn’t own a yacht or any other expensive toys, and he pledged to give away the bulk of his wealth to the Bill & Melinda Gates Foundation.
Unless you have lived under a rock for the last few decades, you have likely heard of the Swedish furniture brand and store, Ikea. Well, Kamprad is the founder of that company and is worth billions of dollars. But instead of living a lavish life, he prefers to keep it simple. Kamprad flies coach when he travels and when he needs to get around town, either drives a nearly 20-year old car or rides the bus. He also enjoys eating at cheap restaurants and has a fairly modest home, mainly outfitted with his companies furniture.
Slim has a net worth of around $50 Billion and is involved in many different businesses and companies in Mexico. He is one of the richest men on the entire planet, but you wouldn’t know that if you just met him on your daily journey. Slim has lived in the same modest home for four decades and doesn’t own a plane or yacht, despite the fact he can afford a fleet of both. He also prefers to keep a notebook, not a computer, to record his financial data.
While he is only worth a few million now, don’t get it twisted, Feeney was one of the richest men on the planet. He founded Duty-Free and was worth nearly 10 Billion. But instead of spending a ton of money in his life, he decided to live frugally. He lives in a rented apartment, doesn’t even own a car, and flies economy class. He has given away over $8 Billion in his lifetime and is arguably the most philanthropic person in history.
Cheriton is currently a Stanford computer science professor worth nearly $5 Billion. Most of his fortune comes from his early investments in many different companies, including Google. Despite being a billionaire, he hates living like one. He cuts his hair, drives a modest car (a 2012 Honda Odyssey), rarely travels, and lives a pretty normal life. If you took one of his classes at Stanford, you would have no idea this man is worth more than 99.9% of the population.
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