7 Money Habits of the Seriously Rich

Have you ever wondered what it is that makes one person rich, and another living paycheck to paycheck? These seven ways to think rich are a great way to invite wealth into your life in 2014.

Set Goals

Unless you’re born into it, or pick a winning lotto ticket you need to set goals in order to become wealthy. The truly wealthy set goals to expand their holdings, invest, and realise income in a controlled and managed way – because they set themselves clear goals. It’s easier to focus on saving for that house deposit or putting aside money to buy shares if you have a crystal clear picture of the prize you really want in mind.

Hang onto things

It might seem peculiar, but the really truly wealthy – I’m not talking about the outwardly wealthy with expensive cars and up to their eyeballs in debt – but those self-made individuals with squillions to their name have a different sense of time when it comes to objects. Most Australian millionaires are the type who buy quality, but wear that favorite cashmere jumper or T-shirt till it’s threadbare and keep resoling a favorite pair of brogues – think Gerry Harvey. Objects are investments and the rich expect to get the best possible value out of them.

Recognise the potential of money

The rich don’t see a dollar as just one dollar, they see that dollar as a starting point that can become $100 over the course of a lifetime – they recognise the potential of that money and use it to apply discipline to their purchasing decisions. As American billionaire Warrant Buffet famously said “someone is sitting in the shade today because someone planted a tree a long time ago.” To Buffet, 30 years ago, the $5 in his pocket that he refused to spend on a sandwich and cup of coffee wasn’t worth just $5 it was the seed for the $500,000 he would earn, making it a very expensive snack.

Aren’t scared by fine print

In a way, fine print is a language barrier between the wealthy, and the poor. When it comes to making financial decisions the self-made wealthy demand to see the detail, they comb through the numbers with a fine tooth comb and if they find something they don’t like (or understand) pick up the phone and demand answers! By contrast most of us are put off or apathetic about fine print, they accept a knowledge gap, throw their hands up in the air and say it’s all too hard. Effectively letting the institution get away with financial murder – errors, fees, unattractive rates or returns that all matter in the long run to you becoming wealthier, or not.

Put a value on their time

Seriously rich individuals can tell you, in an instant, what an hour of their time is worth – when you value your time, you begin to evaluate your decisions through a completely different lens. Is working an hour of overtime worth it when you could be meeting with a financial planner to grow a share portfolio or spending a few minutes getting yourself a balance transfer credit card to save yourself hundreds on an outstanding credit card debt. Time is the most precious resource because once you spend it you can’t get it back so make sure you spend it wisely.

Spend less than you earn

It’s a basic concept, but spending less than you earn is the crux of all wealth building. Setting up a regular savings plan and siphoning away at least 10% of everything you earn to put exclusively towards investments, high interest savings and wealth building is a recipe for financial happiness.

Keep rich company

Wealthy people surround themselves with those who have the ability to think big and make things happen. Keeping rich company doesn’t mean exclusively befriending the wealthy people (although it may seem that way) they also keep their ear to the ground for new ideas, opportunities and perspectives. As the old saying goes, “Show me your friends and I will tell you who you are.”

7 Money Habits of the Seriously Rich was last modified: June 29, 2015 by Kerry Lotzof

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3 Comments - Write a Comment

  1. I think the setting goals and spending less than you earn are the 2 most important to start with.
    It’s much easier to prioritise your spending when you are doing it knowing what your end plan or goal is, don’t you think?
    I find, if a goal is to buy a big ticket item that I can’t yet afford, even putting a note or picture of what I really want in my purse next to my credit card is enough to make me think twice about unecessary spending.

    Reply
    1. Mozo

      Hi Felicity,
      Thanks for your comment we totally agree. People get so used to swiping the plastic to pay for things that it’s easy to get into trouble thinking you can afford something right away when realistically you probably need to spend a bit of time saving for it. Setting goals is also a good way to work out what you really want (and what you’re prepared to go without in order to achieve those goals.) Often it’s a story that you can have the things you want… just not immediately or all at the same time.

      Carrying around a picture of what you want is a great way to control impulse purchases that would set you back on the road to getting there – thanks for the great tip I’m sure our readers will enjoy!

      Reply
  2. Obviously the wealthy can afford to not read the small print.
    AND there should be a law against the small print being on coloured paper making it so difficult to read.

    I often think -do I need it? -or – do I want it.?
    We were taught to save before you buy. If you haven’t got the money to pay for it. If you buy a thing by making regular payments you can end up almost buying it twice from a financial point.
    The only thing my parents borrowed money for was their house.
    They always made sure they had some money put aside for emergencies, unexpected medical expenses etc. which was put aside, never spent on anything else.
    Basic Healthy food was bought, Utility Bills paid and fuel for the car because working hours were not compatiable with public transport. Clothing was bought as required, usually when on special if possible.

    Reply

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