Becoming a millionaire isn’t really easy. That’s the reason most persons in the world, including in the US, remain ordinary citizens, living on a salary or wages. While a few persons do become millionaires due to success at business or windfall from inheritance or a lottery, retaining their position in the elite club of the wealthy proves to be a problem.
This means some people can become millionaires, but eventually, they lose that position.
What causes these millionaires to lose their fortunes? Of course, there could be several. For example, persons who find sudden wealth tend to splurge their money on various useless things.
However, if we see the lifestyles and habits of persons who have become millionaires and continue to retain that position, a few things become absolutely clear. And one of these is that millionaires don’t waste their money on 10 different things.
Getting the Millionaire Mindset
One of the most important things before becoming a millionaire is to change your mindset. As Robert Kiyosaki, investor and author of global bestseller ‘Rich Dad, Poor Dad,’ famously says: “Before you change your purse from poor to rich, change your mindset from poor to rich.”
With these famous words, Kiyosaki simply says that we have to shed our old views about money and how we use it while thinking like a millionaire, though we’re not yet there.
Obviously, this isn’t an easy task by any yardstick.
At the same time, changing your mindset from poor to rich isn’t that difficult either. All you need to do is adopt some of the things that millionaires do and copy these in your own life. That doesn’t mean you start splurging money on stuff that would make you feel rich. Instead, it involves knowing about ten things on which millionaires never spend their money.
10 Things Millionaires Do Not Spend Money On
You might be surprised to find out the way millionaires spend their money. And the things they don’t spend on to save money. These are some things that you could also do to ensure that your personal wealth increases, regardless of whether or not you become a millionaire.
Here’s a list of 10 things that millionaires don’t spend on.
1. Expensive Cars
Warren Buffet, one of the oldest billionaires in the US, drive a simple Cadillac XTS, 2014 series. He drives only about 4,000km every year and has used every car for several years. Despite being one of the richest people in the world, Warren Buffet doesn’t really go on spending on expensive cars.
Mark Zuckerberg, founder of Facebook drives an old Volkswagen hatchback even now, while India’s Azim Premji, founder of the multinational Wipro group, continues to use preowned cars.
In stark contrast, most Americans dream of owning a luxury car or wish to change the one they’re using now. Of course, there’s no harm in buying another car if the current one is no longer roadworthy and can’t be used safely. However, it would be wrong to simply go for another car for no obvious reasons.
2. Expensive Houses
Speaking of Warren Buffet again, this billionaire investor who owns Berkshire Hathaway continues to stay at his modest house in Omaha, Nebraska, which was bought in 1958 for $31,500. The billionaire has repeatedly stated that he has no plans to move to another bigger or more expensive property. The house is now worth some $1.4 million, considering the increase in real estate prices in the US.
However, the value of $1.4 million is fairly modest if we see homes that some ordinary Americans own. Thousands of Americans own homes that cost $1.5 million and higher. If we look at housing prices in Omaha, you’ll surely find properties that cost $2.5 million and more, depending on the size and neighbourhood.
Millions of Americans spend billions of dollars every year as interest paid on home mortgages. A large part of these mortgages are because they wish to move into bigger homes in plush areas of the city. While upgrading one’s life is desirable, paying a lot of money as interest is very undesirable. It eats into your savings and doesn’t allow you to get rich.
3. Expensive Clothes & Accessories
You would be surprised to know that billionaires don’t really wear very expensive clothes. Instead, they wear simple but decent clothing.
Mark Zuckerberg wears his famous grey T-shirt daily, but even this handcrafted piece of clothing costs about $295 and can be bought online. The price is reasonable considering the special fabric and its life.
Bill Gates always wears a Casio watch that sells at $20 in the US. Elon Musk wears ordinary sunglasses, which are estimated to cost less than $100. Jeff Bezos is said to sport clothing that sells under his Amazon brand and is very affordable.
These facts simply prove that you don’t need to wear designer clothes to make a statement in life. Buying expensive designer clothes is fine as long as it serves a good purpose. However, wearing ordinary clothes and accessories could save you a lot of money.
4. Credit Card Debt
A report by the Federal Reserve Bank and US Census Bureau in 2022 reveals that an average American household owes about $7,951 per year in credit card debt. This amount doesn’t consider the Annual Purchase Rate or interest that gathers on credit card spending when you delay payment and choose to settle only the minimum amount due every billing cycle.
LendingTree, a financial institution in the US, estimates that Americans pay up to a maximum of 24.45 per cent interest on credit card dues. However, if you have a bad credit score, the APR on your credit card spending could shoot as high as 30 per cent of the due amount that’s unpaid.
Millionaires and billionaires are aware of the high rates that credit card spending attracts. Hence, they do two things. Some don’t use a credit card despite having one or more. Others spend on their credit card but ensure that all dues are paid off, and there’s no chance to charge interest or other dues. You could also try doing the same and lower credit card debt to a minimum.
5. Low Returns Investments
Another superb habit of billionaires is that they don’t invest in low returns plans under any circumstances. These include everything from stocks and bonds to currencies, cryptocurrencies and commodities, as well as low-yield savings plans. Instead, they quickly sell stocks or other assets when they know it’s not going to provide superb returns and invest the same on ones that will provide the highest returns.
Understandably, high returns stocks and other investments come with a higher level of risks. Millionaires aren’t afraid of taking these risks since they know when and how to exit these investments if they start losing value. And in most cases, they exit without suffering any losses and yet making small gains.
Millionaires never lose money. That’s because they don’t get emotionally attached to any investment product or stocks. They view every investment in a realistic way and only as a source of increasing their personal wealth. Hence, they’re able to make exit decisions when they find it doesn’t fetch more profits.
6. Pricey Groceries & Household Stuff
As a matter of fact, all millionaires and billionaires buy only groceries and household stuff that everyone else buys. They don’t go for premium products unless they find some real value for money. Nor do they indulge in spending money to show off their wealth to others.
A cashier at a leading supermarket in the US once told her interviewer that she was surprised to see a famous billionaire and his wife shopping for groceries that only common people buy. Not only that, the couple were also checking prices and comparing them to find the ones that provide superb value for money.
On the other hand, most Americans live under the false belief that buying premium products is a way to upgrade their own life. They don’t compare stuff they’re buying to see if it really offers value for money. The result: they end up spending more for no clear reason.
7. Dining Out at Pricey Restaurants
The life of a millionaire isn’t full of dining at plush and expensive restaurants or caviar and champagne. Instead, most millionaires prefer to have their meals at home. And these meals are made with ingredients that most of us use in our kitchens. Some millionaires also don’t take their business associates to a pricey restaurant for dining. They invite them home for a simple dinner.
Why would any millionaire do this? The answer is simple. Millionaires are aware of the high cost of dining at restaurants. They know that restaurant bills come loaded with taxes and other charges. Furthermore, they’re also aware that plush restaurants charge more because they have to spend heavily on maintaining a specific ambience at their premises and pay staff accordingly.
For example, Amancio Ortega, the founder and CEO of Zara, eats lunch with his employees every day. Charles Ergen, owner of the Dish Network, carries his lunch in a brown bag daily to work.
8. Expensive Gifts
If you expect to get an expensive gift by inviting a billionaire to your birthday party or wedding, forget it. Almost every millionaire or billionaire never spends on buying expensive gifts for themselves, spouses, family members or others. Instead, they prefer to give down-to-earth gifts that are useful to the receiver.
Wealthy people look at the value that their gift will deliver to the receiver. They don’t believe in simply impressing someone with an expensive gift. This holds true for both- when gifting an equally rich person or even anyone on their staff.
Persons who have rich guests at their parties or special occasions are often stunned when they get simple gifts. That’s because their expectations of getting something pricey were dashed. They don’t realize that wealthy people don’t necessarily give pricey gifts. Instead, most will give something useful.
9. Premium Class Travel
Most billionaires don’t travel First class on airlines. At best, they might travel Business class, while some fly in Economy class. Ingvar Kamprad, the founder and owner of IKEA, is one such example. This Swedish entrepreneur always flies Economy class wherever he goes and rides ordinary trains where possible. He is also known to hitch rides from motorists at times.
Millionaires avoid travelling premium class for several reasons. They don’t find that such travel provides value for their money. If we take a closer look at premium class seats on aircraft, it’s clear that they offer only a few advantages, such as better reclining for sleep, a wider selection of meals, expensive booze and some freebies such as toiletries. These aren’t really enough for any billionaire to spend more on a premium class ticket.
Wealthy people prefer travelling Economy not merely to save money. They like to talk with ordinary people like us and gain insights into our views on various topics. They try to gauge the pulse of the people to decide on their next investment moves.
10. Movies & Entertainment
Millionaires don’t waste their money on movies and entertainment. That doesn’t mean that millionaires live a boring life. No. They do watch movies, listen to music and entertain themselves when bored or when necessary. However, they don’t go around looking for entertainment merely because they can afford it.
According to a report in the New York Times, an average American spends a staggering 78,705 hours watching movies and episodes on TV and in cinemas during their lifetime. This is about 3,279 days from their life spent on movies and episodes. This means an average American spends nearly nine years of their entire life watching movies and TV.
Very rich people are aware of the value of their time. Instead of watching a lot of movies and episodes, they read books or do something that adds value to their personal life as well as those of their employees. They look at everything from a broader yet different perspective that aims at bettering their own life and those around them.
Also Read: 20 Legit Free Movie Websites Online in 2023
So, if you wish to become rich or even a millionaire, start thinking like one and spend only on stuff that’s necessary. Simply spending money on things that don’t matter is actually robbing you of an opportunity to get rich. You can instead use the money for investments and secure your future for those golden years when you wouldn’t be working and have to depend on savings.
To become a millionaire or wealthy, everyone has to take certain steps. You could also curb spending on the ten things listed above and grow your own personal wealth. The best time to start is right now.