I hate being asked what would I do if I won the lottery. I don’t play the lottery, but if I did I wouldn’t go and buy a flashy car, a huge home, and a bunch of toys. If you look at some of the wealthiest individuals, you find they eschew these luxuries in favor of living more frugal lives—and they often have larger bank accounts to show for it. Here are nine frugal habits of the world’s richest people.
1. Buy a Modest Home
Carlos Slim Helu, chairman and CEO of Telmex, has famously lived in the same six-bedroom house for more than 30 years.
2. Shop for Sales
You can follow rule number one and still hang on to your favorite brands—just don’t go nuts on shopping sprees. Outlet stores will often stock name-brand attire at a fraction of the cost, and if you chose to dress sharp and conservatively, you’ll never be rushing to keep up with seasonal styles.
3. Spend Selectively
Be smart about how and when you do spend your money. Resist going on huge shopping sprees or all-out spending trips. Instead, plan your spending wisely, and try to focus on things you need. This doesn’t mean you shouldn’t treat yourself or buy things you want—just that you shouldn’t be doing it on a daily basis.
4. Think Twice About Your Coffee
This might not seem too obvious, but if you were to buy a grande latte from Starbucks every day of the month, you’d be spending somewhere around $75 a month, just on your morning joe. Mayor Bloomberg is known for always ordering the smallest size coffee, and then only when he actually wants it. An even better option? Take that $75 and buy yourself a coffee maker and a few pounds of brew to make at home.
5. Fly Economy
If you’re in an industry that requires you to travel, the cost attached to your flight tickets will rack up fast. It’s better to build up points with a credit card and obtain that occasional free ticket than to go broke flying first class for every meeting you sit through this quarter. And if it works for Ingvar Kamprad of IKEA, then why not you?
6. Drive the Same Car for 10 Years
What do Jim C. Walton, Azim Premji, Steve Balmer, and Ingvar Kamprad all have in common? They all drive cars that cost them less than $20,000. Your car can easily be one of the most expensive things to maintain every year, just shy of $9,000 a year. Why pile that on to the additional cost of splurging on a new ride every 12 to 24 months?
7. Avoid Debt
It might be a hard one to follow, especially when you’re launching a new business—but when you’re further down the line, paying back loans and working down credit cards can pile on enough stress to keep you from focusing on what’s truly important.
8. Learn to Be Happy With Less
In America, we have a very materialist-driven society. By learning to value a “less is more” life style and not spend money every chance you get, you can wind up with more in your pocket—and in your business. Sergey Brin said it well, with “I was raised being happy with not so much”—his not so much has amounted to $22.8 billion.
9. Live Below Your Means
It can really all be broken down to this one simple rule—you may net $100,000 a year, but that doesn’t mean you should spend $100,000 a year. Don’t go out to eat at expensive restaurants every night, don’t buy a new wardrobe every season, don’t pick out a new car every year, and don’t go nuts redoing your home’s interior design. The saying might be that you have to “spend money to make money,” but once you’ve made money, you need to save it to keep it.
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