Are they REALLY disciplined in how they spend their money verses someone who is in debt? Is this just B.S. as to a reason of why they are rich and some people are not. I would say Income has a lot to do with it, and spending habits have very little to do with it. I mean they still have what it is that they want to buy when they want to buy it. Can you explain that then if it's all about good spending habits?
2007-07-27 08:10:12 · 11 answers · asked by Anonymous in Business & Finance ➔ Personal Finance
It is not that they necessarily have better spending habits, but they are cautious on what they spend their money on. People who are truly rich and have made their own money, would never pay full price for anything. Most of them research items for weeks or months to find the best price and they get it for that price.
It does not matter how much you make. If you make a million dollars a year, but spend two million you have a problem. If you make $50,000 a year, but only spend $20,000 you are in good shape.
So I do not think rich has anything to do with income levels. It is about how you choose to spend your cash.
The people we hear about celebrities, athletes etc... just waste their money on foolish things because they can. However, there is a reason why so many of them have financial difficulty later in life when the sun has set on their careers.
2007-07-27 08:35:25 · answer #1 · answered by Eric G 4 · 0⤊ 1⤋
It depends on which "Rich people" you are talking about. Most of the peole that inherited the money probably do not save any better than most others.
You are correct in that income plays a roll in getting rich but more important is time. Lets assume you graduated highschool in 1960. and started saving that year. If you saved 1600 in 1960 and increased your savings amount by 2%per year. That is in 1961 you put in 1,632 and assuming you earned a rate of return of 8%.
Also assume you do this till you retire in 2007, increasing your savings contributions by 2% per year. In 2007 you would have contributed $4058. over the 47 years you would have contributed around 125,000 dollars but you savings balance would be around 1.01million. Which i think still qualifies you as rich.
Several factors contribute to becoming rich, TIME is the most important.
Also i've read both the book the other answer suggest and i would encourage you to read either of them. The millionaire next door or the millionaire mind. Also Rich Dad, Poor Dad is a good read that explains some concepts in pretty simple terms.
I am more like the poor dad, I have a "good job" and an MBA I don't have much of the enterprizing spirt though.
2007-07-27 08:27:32 · answer #2 · answered by Jerry 3 · 0⤊ 1⤋
Generally, rich people who made the money themselves and stay rich do have good spending habits (if they didn't they wouldn't stay rich). If someone has a huge income but lousy spending habits (like many sports stars or music stars or even lottery winners) they may be rich while their income in 5 million per year, but when the career is over they will probably end up losing it all if they don't get good habits.
If you are really interested in this, I suggest you read the book "The Millionaire Mind" its really fascinating and talks exactly about this point in real depth citing all sorts of facts and studies relating to this.
2007-07-27 08:17:10 · answer #3 · answered by Slumlord 7 · 3⤊ 0⤋
That is how the BECAME rich. More than 3/4 of all millionaires earned the money themselves. Less than 5% are 3rd generation rich. Someone mentioned the book "The Millionaire Next Door". I recommend it and "The Millionaire Mind". I believe the same authors wrote both, but it has been a few years since I read either.
2007-07-27 10:17:01 · answer #4 · answered by STEVEN F 7 · 0⤊ 1⤋
According to the book "The Millionaire Next Door: The Surprising Secrets of America's Wealthy" by Thomas J. Stanley and William D. Danko, the people who build wealth and keep it do have good money management skills and tend to be relatively thrifty rather than spendthrifts.
I wish I could answer you from personal experience! Maybe someday, but not yet!
2007-07-27 08:21:09 · answer #5 · answered by Rella 6 · 2⤊ 0⤋
there are 2 different types of rich people, those who flaunt it such as celebrities and whatnot and who are also very likely to spend all their money and go bankrupt just as quickly. Now those that are truly rich are those that seem to be just like you or me, they have what they want and need but they do not go over board, they have good spending habits. and they do not use credit, if they want something they save up and pay in cash, so as not to go into debt.
2007-07-27 08:16:27 · answer #6 · answered by bry leigh 2 · 1⤊ 1⤋
Agree. I study a piece of writing these days approximately lottery winners. It accompanied the lives of various winners and located that people who did no longer funds precise have been broke interior of five years. at a similar time as people who watched theire spending nonetheless had an limitless majority of their winnings.
2016-10-12 22:47:11 · answer #7 · answered by Anonymous · 0⤊ 0⤋
Maybe 'saving' habits is a better term. I saved and skimped when I was younger and now in my twilight years I have all I need. But is that the way to live?
2007-07-27 08:22:22 · answer #8 · answered by PATRICIA MS 6 · 0⤊ 1⤋
That depends on the person - and how they choose to use their money. If you make wise choices prioritizing and develop that habit.
Of course if you have more money the more options you have - but it doesn't necessarily make you better with money.
2007-07-27 08:31:30 · answer #9 · answered by Pask 5 · 1⤊ 1⤋
the ones who stay rich do
2007-07-27 08:17:29 · answer #10 · answered by J S 4 · 0⤊ 0⤋