We might envision the wealthy as big spenders who can buy whatever they want, but most rich people are smart about how they spend their earnings. They understand the financial impact of spending over investing, and they set their goals accordingly. Saving for the future may be easier for higher earners, but knowing where not to blow it is essential. That’s why most classically “rich” people NEVER buy these five things.
There’s more to wealth than high earnings alone. Rich people are also smart about their spending. They generally don’t buy impulse items, cigarettes, more than they can afford, 30-year home loans, or extended warranties. Learn why, and how much you could also be saving, in this revealing post.
Check Out These 5 Things Rich People Never Buy.
If you’re having a hard time staying on budget, impulse buys could be part of your problem. Rich people understand how best to manage their money, and part of that means sticking to a budgeted list when you go shopping. According to a recent survey, the average American spends about $5,400 each year on impulse buys. Think about how much fatter your bank account might be if you invested that much each year instead of spending it on all those unplanned buys.
Most rich people don’t smoke. Not only do they see smoking for the waste of money it is, but they consider the potential health issues smoking often invites. Poor health almost inevitably leads to financial woes, and that’s on top of the funds wasted on the cigarettes themselves. They cost at least $5.50 per pack in most states — that’s over $2000 a year for a pack-a-day smoker.
Credit They Can’t Afford
Credit card interest is just more wasted investment funds, so most rich people pay off their credit cards each month. If they can’t afford to pay off an item, they’ll postpone the purchase until they can. Rich people save by living within their means, which means never spending more than they earn.
30-Year Home Loans
Thinking about buying a home? Think like a rich person, saving up until you can afford a 15-year loan instead of the 30-year one. By doing this, you’ll spare yourself spending over twice as much interest in the long run. For a modest home, that adds up to over $100,000. That’s a lot of investment money.
When was the last time you personally cashed in an extended warranty? Do you even remember which items you’ve bought them for? Most rich people won’t waste their money on the extended warranty, knowing the majority of items they buy will likely outlive their paid service plans. They also research manufacturer warranties, which can be comparable to their overpriced counterparts, and invest in high quality products that are more likely to last.
You can save more money than you think. You might not have the high-figure income, but you can still seek out investment funds by redirecting money you might otherwise have wasted. Consider how much you might be spending on impulse items and other unnecessary buys. How much could you be investing into your own personal wealth instead?