Affluent people can splurge their money on the most luxurious possessions and lifestyles. However, most rich people are wise with money, refrain from making unnecessary purchases, and instead put their money to profitable use. Check out the list of 12 such things.
1. Over Priced Houses
According to a report, millionaire renters are rising in high-cost US cities. These millionaires prefer rented homes for convenience, amenities, proximity to city centers, flexibility to move in and out, and other personal preferences instead of blocking their money in owning a home. So, people who are good with money avoid investing in expensive homes.
2. Fancy Cars
One would expect wealthy people to drive super expensive or limited edition cars. A study presents a different reality, though. This study found that the rich and ultra-rich don’t buy fancy or exotic vehicles because they don’t live their life to impress others. Moreover, luxury cars’ depreciation, insurance, and maintenance exceed their purchasing price in the long run. They would instead invest their money in long-term assets.
3. Luxury Apparel And Accessories
Rich people can afford designer and high-end labels to flaunt their lavish lifestyle. However, it is a needless expense for a few. Take the example of Mark Zuckerberg, who prefers an understated dressing style so that he has more time to focus on work than decide what to wear daily. Bill Gates has often been spotted wearing simple, functional, cheap watches from the Casio brand.
4. Extravagant Celebrations
While some people create a stir on social media for ‘over-the-top’ birthdays and weddings, many opt for a low-key, minimalistic affair or meaningful experiences. They understand that consumerism is a trap and, hence, an escape from an ostentatious display of their money.
5. Trendy Tech Gadgets
People good with money are conscious about succumbing to the lure or pressure of buying the latest models of gadgets. They know that these gadgets become outdated quickly. Hence, they believe in buying quality gadgets with a prolonged lifespan and low maintenance.
6. Credit Card Debt
The interest on the debt accumulated on carrying the balance of cards can add up to thousands of dollars in no time. Financially-conscious people have a healthy relationship with credit cards. They see it as an investment tool to simplify their finances and enjoy exclusive benefits. A study highlights that wealthy Americans usually keep credit cards for cash back and travel rewards.
7. Inheritances
Warren Buffet, Elton John, Gordon Ramsey, and other wealthy people have decided not to live much fortune for their children. Apart from the fact that they want their children to understand the importance of struggle, it also helps them reduce their financial stress.
8. Loans
People with positive money psychology avoid taking loans for vacations or to make big purchases such as a home or a car. Interest on loans is a significant expense, and late repayments of EMIs can attract penalties and fines. It is better to live below the means than drown in debt.
9. Subscription Services
An average American spends $219 every month on subscription services. Many people fail to realize that they incur unused or unwanted subscription costs. People who are good with money rarely pay for subscriptions they don’t need.
10. Lottery Tickets
Americans spent $108 billion on lottery tickets in 2022. The lottery is akin to gambling and puts one’s money at risk without any objective evidence of return. Financially successful people avoid buying lottery tickets and prefer investing in long-term assets such as stocks or bonds.
11. Flashy Gifts
People who are good with money don’t squander cash on buying showy gifts for others. They choose classy, thoughtful, and meaningful gifts that may not be expensive but invoke happy sentiments for the receivers.
12. Impulse Purchases
According to a study, nearly 94% of Americans admit to spending impulsively, especially on dining out, clothes, and shoes. However, impulsive purchase causes regret and debt for many. Wealthy people plan and budget ahead to avoid a last-minute shopping frenzy.