13 Things Rich People Never Waste Their Money On
Updated: Oct. 03, 2018
Wealthy people can buy anything and everything they want, right? While that might be true, it doesn’t mean the rich are out there dropping bills left and right. In fact, they can be quite frugal.
1. Impulse Buys
Sure, it might be enticing to snag the cashmere sweater in the store window or the newest car on the lot. But making a purchase on a whim is something you will never see a wealthy person do. “If you buy things you do not need,” billionaire investor Warren Buffet told Forbes, “soon you will have to sell things you need.” It doesn’t mean millionaires don’t buy lavish items, they just put thought into them and their bottom line before swiping their credit card.
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2. Extreme Inheritances
It’s fantasy to think we can all leave a mountain of money to our children and grandchildren, so they don’t have to budget as we did. But large inheritances are something rich people don’t use their money for. Why? Well, Bill Gates and Mark Zuckerberg both said they want their children to find their way rather than relying on a handout, according to CNBC. Instead, both billionaires are giving significant portions of their fortunes to charity to help those who need it most.
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3. TV Channels and Video Games
Rich people didn’t amass their fortune sitting around staring at a screen all day. That’s why they don’t waste money on jumbo TV packages or the latest video games. “We expected high-income households to own more devices, but we did not anticipate that low-income consumers of all devices had greater usage,” says Glenn Enoch, Nielson’s SVP of Audience Insights.
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4. Luxury Brands
Millionaires can afford the latest fashions from the top designers, but that doesn’t mean they’re spending their hard-earned money on high-end apparel. In fact, the founder of IKEA, Ingvar Kamprad, told Newsweek that he doesn’t wear anything that is not from a flea market to “set a good example,” and Bill Gates told Time that he still wears a $10 watch despite being able to afford a closet full of Rolexes.
5. An Over-Priced Home
Although their home-buying budget is considerably higher, rich people still look for deals. They want to feel like they’re getting the most value for their dollar and not like they’re getting ripped off. Yes, they might be spending millions, but they’re going to try to bargain with the list price like anyone else. Some wealthy individuals even go so far as not to purchase an extravagant home at all. According to U.S. News and World Report, Warren Buffett still lives in the home he bought in 1958 for $31,500.
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6. Buying Instead of Renting
Some rich folks are going so far as to not even deal with the hassle of buying a home. Many are opting to rent, according to Extra’s Mansions and Millionaires host Michael Corbett. “Renting is more popular than ever, even among the wealthy,” he told huffingtonpost.com. “While it once made sense for people who could afford it to buy a home and flip it after two years, and the market has improved moderately this year, we’re hardly in a boom.”
7. Pricey Grooming
Everyone needs a trim once in a while, but some famous rich people don’t think it warrants whipping out the wallet. John Caudwell, businessman and billionaire cuts his own hair, according to TIME, and IKEA founder, Ingvar Kamprad told Newsweek that he’s had his hair cut when he is in developing countries as a way of giving back.
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8. Multiple Credit Cards
It’s understandable that a wealthy person might not want to walk around with a ton of cash in their pocket. But don’t think for a second that their wallet is filled with a credit card from every bank. Tom Corley, author of the best-selling book Rich Habits: The Daily Habits of Successful People, told U.S. News and World Report: Only eight per cent of rich people use more than one card. Meanwhile, 77 per cent of poor people have multiple credit cards. With more cards, there are more fees to keep track of, more finance charges to accrue, and generally more opportunity to buy things you don’t need.
9. Late Fees
No one likes to pay pesky late fees when they miss a bill or payment, especially rich people. That’s why they’re diligent about setting up auto-pay on all their accounts, from mortgages and car payments to credit cards and insurance, according to David Back, author of Smart Women Finish Rich.
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10. Things That Don’t Last
Even if rich people have the money to replace an item that wears out or breaks, they still don’t want to waste their money that way. “Wealthy people understand that the cheapest route isn’t always the most valuable,” said Peter Bush, a CFP with Horizon Wealth Management in Baton Rouge, Louisiana. “They can take the long view and consider how what they pay today compares with the worth over time.”
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11. Stuff Over Experiences
Research has shown that money and material things can generate only so much happiness. Instead, it’s meaningful experiences that lead to a truly fulfilling life. According to Jaime Tardy, author of The Eventual Millionaire, the wealthy choose once-in-a-lifetime experiences over new gadgets. As Tardy told The Week, she knows several millionaires that have old iPhones rather than the newest model.
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12. Retirement
Now, look: No one is going to advise you against investing money in your retirement fund. But for rich people, retirement isn’t a focus mostly because self-made billionaires don’t plan to retire, according to CNBC. A 2010 study from Barclay’s Wealth, published on CNBC, revealed that 54 per cent of millionaires want to work right through their retirement years, and 60 per cent of people with a net worth of $15 million plan to work “no matter what their age.”
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13. Gambling
Of course, rich people don’t need to play the lottery since they’ve already struck it rich. But they are still against wasting their money on gambling. Warren Buffet has bashed the whole idea, saying it’s the government preying on its citizens. “A government shouldn’t make it easy for people to take their social security checks and [waste them pulling] a handle,” he has said. He also put a slot machine in his home to show his children that when he gave them their allowance, they would fall into temptation and end up spending it all in one day.
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