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The Top 5 Habits of Wealthy People

Researching the wealthy has been a surprisingly sobering exercise because apart from a few big spenders who enjoy indulging in fanciful whims such as customising the headrests of their Rolls-Royces and sipping martinis poured over diamonds it seems that the moneyed minority generally live a comfortable but non-extravagant life.

So what are the wealthy doing right?

1) Most significantly they live within their means, are often very thrifty and donate to noble causes. They continue to save regularly, possess a disciplined savings plan, have little or no debt and are very conscious of where they spend their money.
2) They live in fine houses – but it’s often the same property that they’ve been in for 20-plus years.
3) Don’t expect to see them driving around in the latest Mercedes - 86% of the luxury cars sold in the United States in 2007 were purchased by non-millionaires. They will probably have a decent vehicle but often they’ve had it for several years.
4) They prefer to vacation overseas - on average once every two years – than own a holiday home.
5) They maximise income, own appreciating assets and have a team of professional advisers around them to help them accumulate, manage and protect their wealth – but ultimately they make the final key decisions themselves.

Tags: Wealth, cars, income, property, tips

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Permalink Reply by Bandwidth on August 15, 2008 at 7:07pm

Hello Jill

Are you aying the wealthy have no debt at all or simply no personal debt.

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Permalink Reply by Jill Fraser-FatCat journalist on August 16, 2008 at 7:10am

Hi Bandwidth,

My research indicates that it's personal debt that they avoid.. credit cards etc. Their assets greatly exceed their credit liabilities. Often they have little or no credit balances.
Would you mind expanding on what you mean by "no debt at all"?

Cheers,
Jill

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Permalink Reply by Bandwidth on August 16, 2008 at 8:48am

Hello Jill

I thought I had replied to this but it seems to have gone missing.

What I mean by no debt at all is owe nonbody anything either in business or personally.

I would see the wealthy as using debt as a tool in their overall strategy. Credit cards are a handy transaction method, as long as you don't carry the balance beyond the interest free period.

Also a number of people get so hung up on debt that they fail to see where it can be used the their advantage.

In my view the wealthy have money work for them rather working for money and if the defenition of "broke" was having no cash in the bank then most wealthy would be classed as broke.

An interesting observation, the motto of this site is "save money one click at a time" I believe that the wealthy focus more on making money rather than saving it. When I save money the limit on what I can save is 100% of what I have. when I generate more income and capital there is no natural boundary.

When the wealthy save it is a means to an end rather than an end in itself.

I would suggest that the wealthy see money as a measure of how well their plans were succeeding and place their money where it works the hardest.

These views are based on my observations, lessons and readings, over time

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Permalink Reply by Jill Fraser-FatCat journalist on August 17, 2008 at 5:21pm

Here's another little snippet that I found during my research and which you might appreciate, Bandwidth.

Although the wealthy say that working hard, being disciplined and remaining focused are the keys to wealth accumulation in a survey conducted in the US (sorry I don't have the details of the survey.. I've read so much on wealth creation over the past it's got buried somewhere!) one in eight millionaires believe that luck played an important role in their achievements.

BUT.. and this is the key.. it's not the sort of luck that's associated with gambling.. What they're referring to are factors that are outside of their control like weather, interest rates etc.

Interesting, eh?

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Permalink Reply by Bandwidth on August 17, 2008 at 7:22pm

Very interesting

My belief is that we generate our own luck, not lotto luck, but genuine luck and opportunities. The greatest skills are to recognise "luck" and opportunity then be able to capitalise on it. Many people do not believe they are worthy of the things that come their way.

Most of the wealthy have a PAMA (Positive Mental Attitude) people who are negative are often suspicous and sceptical when opportunities come their way. Most wealthy people embrass the opportunity then assess the situation, keeping the profitable components and farming out the orther bits

The weatlthy have strategies in place to handle the situation should the "luck" turn against them. They also have the discipline to cast off projects should they look like turning to "s..t". They do not pour good money after bad

What I believe is the wealthy put themselves in the position to take advantage of opportunities or any "luck' that may come their way. The lessors get the same opportunities and "luck" but often do not believe in themselves and what they are doing enough, to take advantage of the situation.

As Henry Ford said "I have been extremely lucky at everything I tried very hard to do.

Luck is a self fullfilling prophesy.

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Permalink Reply by JeffK on August 18, 2008 at 2:46pm

I think this is true about luck. While you can "make your own luck" as they say, there is an element of randomness that can either work in your favour or against you. i can see how luck can play a major part (both bad and good luck), but you do have to put yourself in a position to get the luck in the first place. You won't get it sitting around watching TV!!

JFK

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Permalink Reply by Bandwidth on August 18, 2008 at 5:35pm

I believe randomness is just the noise we all have to live with

:-)

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Permalink Reply by Natalie Bochenski on August 19, 2008 at 1:59am

As Oprah says "Luck is where preparation meets opportunity".

Say what you will about Oprah, but hey, she's the one with billions in the bank, so it's gotta be worth something!

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Permalink Reply by Karen on August 19, 2008 at 2:01am

Too true. None of us is really in a position to diss a billionaire!!!

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Permalink Reply by Bandwidth on August 19, 2008 at 8:10am

Go Girls

The wealthy look on others as inspiration rather than put them down

It is easy for people to put down those who are seen as being in a better than them, often done to self justify their current position.

Let's start preparing to be lucky.

The world is a land of plenty and we can all get where we want to get. :-)

Permalink Reply by Scott Keefer on August 16, 2008 at 7:28pm

A really good book worth reading on tis topis is The Millionaire Next Door by Stanley & Danko. It is American based but the underlying ideas can be easily transferred to the Australian context.

Wikipedia has a brief summary of the main points - http://en.wikipedia.org/wiki/The_Millionaire_Next_Door

The basics are - spend less than you earn, avoid buying status objects or leading a status lifestyle, take financial risk if it is worth the reward.

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Permalink Reply by Jill Fraser-FatCat journalist on August 17, 2008 at 5:26pm

Hi Scott,

How interesting that you refer to Dr Thomas Stanley.. I interviewed him a couple of months back..The article is on the FatCat website (www.fatcat.com.au/news/home/Psychology/118_0.html).

I found his own story as fascinating as his research.

Cheers,
Jill