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The word millionaire conjures up thoughts of extravagant wealth. While that was true in years past, being a millionaire today means that one is enjoying much less of a lifestyle. A millionaire does not live in a huge mansion while driving fancy exotic cars. Instead, as was summed up in The Millionaire Next Door, this person lives a rather modest lifestyle. He or she is financially free because the expenses are kept in check. This person values putting more money into the portfolio as compared to engaging in poor habits which cost a lot.
Here are 5 things that your average millionaire does not do. If you want to enjoy the lifestyle of the affluent, implement these into your life.
Buying or leasing a new car every few years.
A new car is the worst investment that you can make. It is no secret that you lose thousands of dollars the second you drive off the car lot. If you are in need of an upgrade of your old vehicle, consider purchasing a quality used car that is a couple of years old. This vehicle already went through the major depreciation and, if it has low mileage, will deliver years of service to you.
Purchasing a new one when the old can be fixed
A little handiwork goes a long way. Often, when items are broken, the fix is simple and inexpensive. Yet, many choose to purchase a new item instead of fixing the old one. I once had a light that stopped working due to a loose cord. It took less then 10 minutes to fix it. This saved $30 for a new light. That equates to an hourly rate of $180 per hour. Not a bad return.
This example shows how a single item will not determine success or failure. However, it is the habit that is important. Millionaires seek to maximize their return on everything. If you can spend a few dollars on an item while getting another year usage, that is improving the return on your money.
Buy name brands
Have you ever noticed that the store brand cough medicine has the same ingredients as the name brand. The difference is about $3.00 a bottle. That equates to 45% of the purchase price. We see the same situation with clothing. Why buy name brand when a large percentage of the purchase price is the marketing dollars spent to make the name a household word? It does not make the product work any better.
The exception to this is with quality. Paying a bit more for quality is often a wise investment since the overall cost is less with the increase in longevity. A prime example of this is with shoes. Usually, an $80 pair of loafers will last substantially longer than a $30 pair. The length of usage makes it a better deal over the life of the item.
Eating out a lot
Food offers the nourishment that is required for us to survive. However, it is something that ends up in the same place regardless of how much it cost. Dinner at a nice restaurant can easily run $40+ a person. The same meal can be prepared at home for under $10. Those who reach the level of millionaire realize this fact and choose to eat at home. The same mindset is applicable to lunch. With the average lunch going for $6-$8, one can slash 75% off that amount by packing one. Brown bagging is a way to affluence.
Paying for lawn care
When I moved into my house, I checked into getting a lawn service to take care of the yard. When I got the estimate, I almost fell over. They want $75 a week for something that would take them less than 30 minutes to do. Instead of paying that, I purchased a used lawn mower for $75 and do it myself. This gets me out of the house for a little exercise while allowing me to enhance my investment portfolio. The extra money that I save is invested on a monthly basis.
The average millionaire knows exactly what his or her time is worth. Mowing the lawn may seem like a waste of valuable resources. Again, when I notice that it takes me 45 minutes to do my entire yard, I realize that I am earning $100 per hour. This is a terrific return for most people.
Here are 5 things that your average millionaire will avoid doing. Controlling one's expenses is a key part of amassing wealth. Start implementing these simple ideas into your life. Keep track of the monthly savings and invest it. This way, you are paying yourself instead of a particular vendor.
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1 comment:
Of course, one could note that some people's time is worth more doing something productive, rather than doing something that saves them money, it's better to do something that earns money.
BTW, if it's just mowing a lawn that you're talking about, maybe you should give the 12 year old kid down the block $10 a week to do it for you. Then you can spend that 45 minutes doing something that will make you far more than $10/hr.
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