We know two things about millionaires: They know exactly where their money is going and what not to do with it.
The most important thing you can do to become a millionaire is to learn from the super-rich, from Microsoft co-founder Bill Gates to Google’s ex-CEO Eric Schmidt to Berkshire Hathaway CEO Warren Buffett.
These are seven things that the world’s wealthiest people never do, and how you may incorporate their healthy financial practices into your own life:
1. They don’t waste money on fees.
Wealthy people understand that fees are a waste of time and money, so they always pay their bills on time. People use services such as autopay to avoid late fees on everything from utilities to mortgages to credit card payments.
They are also concerned about bank costs. Several banks will charge you extra fees for their services, which you may be unaware of. Some of the larger banks, for example, will charge you between $12 and $15 unless you achieve certain requirements, such as keeping a certain average balance in your account. Check your monthly statements for these hidden charges on a regular basis.
2. They don’t ignore their credit score.
Your credit score is a major factor in setting your interest rates. A good credit score can get you a low interest rate, which can save you hundreds of dollars in interest over the life of a loan. If you ever need a loan, a low credit score may prevent you from acquiring one.
Rich people understand this and never, ever overlook their credit score. They routinely check their scores and work hard to keep them spotless. Numerous apps will check your score for free and even try to help you improve it. Maintain a close eye on your monthly credit report, keep your debt levels low, and pay your obligations on time.
3. They do not spend rashly.
Millionaires spend a lot of money on silly stuff (for example, Cardi B’s $500,000 Lamborghini), but the wise ones are surprisingly modest. Bill Gates is seen wearing a $10 watch. Warren Buffett eats the same meal at McDonald’s every day for breakfast, and it never costs more than $3.17. Mark Zuckerberg drives a manual-transmission VW.
“Rich individuals do not become wealthy by spending all of their money. They understand better than anyone that by shopping wisely, they may reach a lifestyle several rungs up the financial ladder. Pam Danziger, a market researcher, makes the following observation: Impulsive spending results in waste, overspending, and debt, all of which successful people avoid.
4. They are not susceptible to marketing gimmicks.
Marketing ploys abound, and wealthy individuals avoid them via comparison shopping. They prioritize value but also consider the big picture, weighing the benefits of quality versus cost.
Do your homework and examine your bottom line before making any purchase, large or small. You can save time and money by purchasing a more expensive but well-built item that you will use for years rather than having to fix or replace a badly made item.
5. They don’t try to beat the market.
Eric Schmidt is a billionaire and the former CEO of Google. He says that short-term trading, which is buying and selling stocks based on daily changes in the market, will not make you rich.He constantly considers the long term and never attempts to outperform the market.
Warren Buffett likewise believes in a long-term plan. Earlier this year, a few days after releasing Berkshire Hathaway’s annual letter to shareholders, the billionaire spoke on CNBC and explained why long-term investment techniques like index funds still hold up.
6. They don’t have just one source of income.
Having many revenue streams allows you to make more money, and wealthy people never rely on a single source of income. Consider turning your extra car into a ride-sharing service, doing freelance work, becoming a tutor, or writing about your areas of expertise.
“When I got ‘The Tonight Show,’ I always made sure I did 150 [comedy show] gigs a year, so I never had to touch the principal,” Jay Leno, comedian and television host, told CNBC. “I’ve never spent a penny of my ‘Tonight Show’ money. Ever. I’ve always had two sources of income. I’d bank one, and I’d spend one.”
7. They don’t keep up with the Joneses.
According to 2017 research by the employment website CareerBuilder, 78 percent of American workers live paycheck to paycheck. Rich people understand that the concept of a well-lived life is very subjective. Buffett had never had an iPhone before receiving one as a gift, but he told CNBC, “I’m not using it.”
Even if your friends, neighbors, or coworkers have the latest “must-have” tech item, that doesn’t mean you need one. There’s a good likelihood that the Joneses can’t afford their way of life. Your reality matters more than public perception. Choose how you want your life to be now and in the future. Allow no one to make that decision for you.