Get rich by being penny wise, pound wiser

Their bank accounts may be flush with funds, but the rich don’t just drop cash on a whim. In fact, the ones who are good with money can be quite frugal
businessinsider.in

You don’t have to be a billionaire to be good with money. Making sound financial decisions is about habits, not income.

People who are good with money, even the wealthy ones, are always looking for a way to not spend unnecessarily on a whim.


Here are some of the things they aren’t likely to spend on.

Buying a new car frequently

“The person who actually has several hundred thousand in the bank or may even be a millionaire is going to drive a fiveyear-old car or a 10-year-old car,” says personal finance expert and author Lynette Khalfani-Cox.

A new car loses 10 per cent of its value in the first month, and 20 per cent of its value in the first year. Someone who’s good with money won’t want to take on that kind of loss. They know that the best value comes from keeping the same car for a while, instead of splurging on the newest model every year.

Houses they can’t afford

Those who are good with money aren’t looking to spend more than they can afford on a home. Most of us want to feel like we are getting the most value for our money, without getting ripped off. And though millionaires and billionaires may have hefty bank accounts, some prefer not to purchase extravagant homes.

Splurge on luxury brands

Those who are good with money are “less interested in brand names or tags and labels,” says Khalfani-Cox. And it seems that those with wealth are starting to take this cue as well. Showing off wealth is no longer the way to signify having wealth. In the US particularly, the top one per cent have been spending less on material goods. Instead, many wealthy people are opting to spend on privacy, exclusive wellness and fitness routines, and investing in education instead of buying designer items.

Stuff over experiences

Accordi ng to research, money and material things can generate only this much happiness. Meaningful experiences are what truly define a life well lived. According to Jaime Tardy, author of The Eventual Millionaire, the wealthy choose once-in-a-lifetime experiences over new gadgets and material things.



Deepika Padukone has said, “One of the first things that my parents taught me is to live within your means”


Retired NBA player Robert Horry has said, “I owned two Ferraris when I was playing [he retired in 2008]. I also liked watches but have sold many of them. That’s where my frugal part kicks in”


IKEA’s founder, the late Ingvar Kamprad did not wear anything that was not from a flea market to “set a good example”