Secrets of rich people

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I went to a preppy New England boarding school and the biggest difference I noticed is that people who are rich don't need to prove to anyone they are rich. If anything, they competed over who lived a simpler life. There were no BMWs on campus, though I'm sure at least some parents could afford to buy a new car for their high school kid. People wore a lot of LLBean and JCrew (durable but not flashy). I really liked this laidback approach and it rubbed off on me. I was not ashamed of getting hand-me-down baby clothes--I thought it was practical. I don't want to drive a fancy car, because I feel like it's in poor taste/flaunting one's money. And this approach for the most part does keep you from going overboard. We don't spend our whole pay check, but without that much conscious effort.

Also, my DH is good with finances, which has set us way ahead. Again, it's not something easy to replicate, because I for one can't force myself to care, but I do recognize that it works. He thinks about best ways of handling money, does some research, and acts accordingly. I can spend hours reading child care forums, but financial stuff is boring to me, and would be hard to do on my own.

I think this is really why rich people want their kids to be surrounded by the other rich, so that these good habits stick.

That's probably the local culture and is not representative of all rich or wealthy people, or even a majority thereof. You do what you want and what makes you happy, while at the same time don't ridicule others who choose to behave differently with their money. It just as inane for you to find it in poor taste for others to spend their money as others may shun your thrifty lifestyle. There is no right or wrong answer in this, as it falls down to subjective preference. As long as the spending is within their means, there is no negative lesson to be learned from rich people spending their money in ways that pleases them.

I'm the LL Bean poster and the reason I brought this up is because I think of it as a secret of rich people--not to care about consumer goods, whereas other people with much lower incomes are overspending on those items. All that spending adds up, becomes a habit, and then people never get a chance to put money aside or invest, and live paycheck to paycheck.

Sure, spending within means is fine, but I think we are discussing spending beneath one's means in this thread.

I completely agree with you PP.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Max out retirement starting day 1 of a professional job;

Live below your means -- whether that's living on one salary/saving the other; or if you're single/or married but can't do the 1 salary thing -- make it a goal to save 25-50% of one salary at least.

And then what you save from living below your means -- invest it -- at least most of it.

Invest invest invest, even if it's $1000 here and $3000 there, it adds up. For example when I was at a job with a transit benefit, I kept track of how much I was saving by using company funded public transit vs. driving and parking each day -- subtracting out the days I drove anyway or took Uber. I kept track of the amount saved and every few months when that amount added up to $1500+, I threw it in the market. As I saw it, I'd be spending that amount anyway if the co. took away transit, so why not act like it's being "spent" now by throwing it in the market.

I think this is probably the most important lesson my (rich) father taught me. Invest every spare penny, and do it early. He help me set up CDs for any birthday money I got in high school. In college, he helped me set up a Roth IRA and offered to match any contribution I made to it, even if it was just a couple hundred dollars a year. I learned later that as long as I set aside something, he maxed my contribution...but I didn't know that at the time.

The other couple of things:
- Establish credit early on by getting a CC that you pay in full every month. I started off with a $500 limit on a card I pretty much used only to buy textbooks, but it set me on the path to an excellent credit rating.

- Always, live below your means. I guess this is corollary to the above...since I was taught never, ever to carry a CC balance.

Of course, all of these things rely on having a certain amount of money to begin with...and obviously most people's parents aren't maxing their Roth contributions. But even if he hadn't done that, I think just the lesson to invest was an important one. DH's father taught him about investing early on as well, and I think it really colors how we both think of things. None of our siblings have the kind of savings that we do, but they all live "fancier" than we do. In the end, it might not matter with the amounts we will all inherit...but at least in DH's sister's case, we've been able to tell his parents that we've already fully-funded our kids' 529s so they can set any money aside to contribute to SIL's kids college instead.

Haha I mean...it sounds like your secret is "have a rich father".

Obviously that helps. But even if he hadn't topped up my contributions, those few hundred dollars a year in my late teens and early 20s would have added up to a substantial foundation for retirement. That's the point.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I've been reading The Millionaire Next Door. It's dated, but the principles and information still applies to modern times. You can Google the book if you want a synopsis of the main points.

This x1000. Go read the posts about people spending $20 or more a day on lunches and do the opposite. I still shop at thrift stores, use online coupon codes, and go to lower prices grocery stores and eat out maybe 1 time a month. We are wealthy but you would never, ever guess it.

Why on earth would you live this way of you are wealthy? Just to have more money in your bank account when you are alive and money to give your kids when you die? No thanks!

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I've been reading The Millionaire Next Door. It's dated, but the principles and information still applies to modern times. You can Google the book if you want a synopsis of the main points.

This x1000. Go read the posts about people spending $20 or more a day on lunches and do the opposite. I still shop at thrift stores, use online coupon codes, and go to lower prices grocery stores and eat out maybe 1 time a month. We are wealthy but you would never, ever guess it.

Why on earth would you live this way of you are wealthy? Just to have more money in your bank account when you are alive and money to give your kids when you die? No thanks!

It’s just the opposite extreme of spending everything you make. I wouldn’t want to live either lifestyle.

[Anonymous]

I'm not rich by my own standards but probably by those of many others. We live modestly and have invested using dollar cost averaging by weekly withdrawals from our checking account. Our major goals have been security in old age and a good education for our offspring. We drive our cars pretty much until the wheels fall off.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I've been reading The Millionaire Next Door. It's dated, but the principles and information still applies to modern times. You can Google the book if you want a synopsis of the main points.

This x1000. Go read the posts about people spending $20 or more a day on lunches and do the opposite. I still shop at thrift stores, use online coupon codes, and go to lower prices grocery stores and eat out maybe 1 time a month. We are wealthy but you would never, ever guess it.

Why on earth would you live this way of you are wealthy? Just to have more money in your bank account when you are alive and money to give your kids when you die? No thanks!

This is the way many, if not most wealthy people live. That's partly how we get to be wealthy. The habits of a lifetime are hard to break regardless of your bank balance.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I've been reading The Millionaire Next Door. It's dated, but the principles and information still applies to modern times. You can Google the book if you want a synopsis of the main points.

This x1000. Go read the posts about people spending $20 or more a day on lunches and do the opposite. I still shop at thrift stores, use online coupon codes, and go to lower prices grocery stores and eat out maybe 1 time a month. We are wealthy but you would never, ever guess it.

Why on earth would you live this way of you are wealthy? Just to have more money in your bank account when you are alive and money to give your kids when you die? No thanks!

Why? Because honestly material things largely don’t give me happiness. Having a $1000 purse won’t bring me any more joy than the purses I use (all designer, gifted or thrift store finds). It means I don’t have the newest and best of everything but we travel, are retired, have multiple homes, and my hope is absolutely to pass the wealth on when I die (though at appropriate ages).

[Anonymous]

There is ALWAYS something more or bigger to buy, no matter how much money you have. If you get caught up in this consumer trap you will never be satisfied.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I've been reading The Millionaire Next Door. It's dated, but the principles and information still applies to modern times. You can Google the book if you want a synopsis of the main points.

This x1000. Go read the posts about people spending $20 or more a day on lunches and do the opposite. I still shop at thrift stores, use online coupon codes, and go to lower prices grocery stores and eat out maybe 1 time a month. We are wealthy but you would never, ever guess it.

Why on earth would you live this way of you are wealthy? Just to have more money in your bank account when you are alive and money to give your kids when you die? No thanks!

This is the way many, if not most wealthy people live. That's partly how we get to be wealthy. The habits of a lifetime are hard to break regardless of your bank balance.

Not really. At least of the many wealthy people I know, very few live THAT frugally.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I've been reading The Millionaire Next Door. It's dated, but the principles and information still applies to modern times. You can Google the book if you want a synopsis of the main points.

This x1000. Go read the posts about people spending $20 or more a day on lunches and do the opposite. I still shop at thrift stores, use online coupon codes, and go to lower prices grocery stores and eat out maybe 1 time a month. We are wealthy but you would never, ever guess it.

Why on earth would you live this way of you are wealthy? Just to have more money in your bank account when you are alive and money to give your kids when you die? No thanks!

This is the way many, if not most wealthy people live. That's partly how we get to be wealthy. The habits of a lifetime are hard to break regardless of your bank balance.

Not really. At least of the many wealthy people I know, very few live THAT frugally.

Hence the millionaire next door. They are rich, you just don’t know it!

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I've been reading The Millionaire Next Door. It's dated, but the principles and information still applies to modern times. You can Google the book if you want a synopsis of the main points.

This x1000. Go read the posts about people spending $20 or more a day on lunches and do the opposite. I still shop at thrift stores, use online coupon codes, and go to lower prices grocery stores and eat out maybe 1 time a month. We are wealthy but you would never, ever guess it.

Why on earth would you live this way of you are wealthy? Just to have more money in your bank account when you are alive and money to give your kids when you die? No thanks!

This is the way many, if not most wealthy people live. That's partly how we get to be wealthy. The habits of a lifetime are hard to break regardless of your bank balance.

Not really. At least of the many wealthy people I know, very few live THAT frugally.

But you see those are the ways we are thrifty. We also take expensive, frequent vacations. We have many homes and a boat. So while we might be wearing a pair of thrift store shorts, we also aren’t letting life slip by us. We spend money on life experiences (boat, beach house, vacations) not on what I’d consider to be not worth it: handbags, clothing, etc.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I've been reading The Millionaire Next Door. It's dated, but the principles and information still applies to modern times. You can Google the book if you want a synopsis of the main points.

This x1000. Go read the posts about people spending $20 or more a day on lunches and do the opposite. I still shop at thrift stores, use online coupon codes, and go to lower prices grocery stores and eat out maybe 1 time a month. We are wealthy but you would never, ever guess it.

Why on earth would you live this way of you are wealthy? Just to have more money in your bank account when you are alive and money to give your kids when you die? No thanks!

This is the way many, if not most wealthy people live. That's partly how we get to be wealthy. The habits of a lifetime are hard to break regardless of your bank balance.

Not really. At least of the many wealthy people I know, very few live THAT frugally.

Hence the millionaire next door. They are rich, you just don’t know it!

I guess it depends on your definition of rich. I don’t know of a single person with a net worth over $10 million living in a dumly house and driving a Buick.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I've been reading The Millionaire Next Door. It's dated, but the principles and information still applies to modern times. You can Google the book if you want a synopsis of the main points.

This x1000. Go read the posts about people spending $20 or more a day on lunches and do the opposite. I still shop at thrift stores, use online coupon codes, and go to lower prices grocery stores and eat out maybe 1 time a month. We are wealthy but you would never, ever guess it.

Why on earth would you live this way of you are wealthy? Just to have more money in your bank account when you are alive and money to give your kids when you die? No thanks!

This is the way many, if not most wealthy people live. That's partly how we get to be wealthy. The habits of a lifetime are hard to break regardless of your bank balance.

It's fine that you live like this, but this is simply not true. I grew up pretty well off, and people were thoughtful about not wasting money but they still spent enough to enjoy their lives. If you enjoy your life, that's fine...but most people would prefer to eat out a few more times a month, to go to normal grocery stores, and to shop at department stores.

I don't think there's a reasonable definition by which I'm not wealthy, and I could not imagine only shopping thrift stores and shopping only at grocery outlet. I don't buy everything from Whole Foods either, though. And I definitely use online coupon codes.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I've been reading The Millionaire Next Door. It's dated, but the principles and information still applies to modern times. You can Google the book if you want a synopsis of the main points.

This x1000. Go read the posts about people spending $20 or more a day on lunches and do the opposite. I still shop at thrift stores, use online coupon codes, and go to lower prices grocery stores and eat out maybe 1 time a month. We are wealthy but you would never, ever guess it.

Why on earth would you live this way of you are wealthy? Just to have more money in your bank account when you are alive and money to give your kids when you die? No thanks!

This is the way many, if not most wealthy people live. That's partly how we get to be wealthy. The habits of a lifetime are hard to break regardless of your bank balance.

It's fine that you live like this, but this is simply not true. I grew up pretty well off, and people were thoughtful about not wasting money but they still spent enough to enjoy their lives. If you enjoy your life, that's fine...but most people would prefer to eat out a few more times a month, to go to normal grocery stores, and to shop at department stores.

I don't think there's a reasonable definition by which I'm not wealthy, and I could not imagine only shopping thrift stores and shopping only at grocery outlet. I don't buy everything from Whole Foods either, though. And I definitely use online coupon codes.

This.

[Anonymous]

Anonymous wrote:
I'm the LL Bean poster and the reason I brought this up is because I think of it as a secret of rich people--not to care about consumer goods, whereas other people with much lower incomes are overspending on those items. All that spending adds up, becomes a habit, and then people never get a chance to put money aside or invest, and live paycheck to paycheck.

Sure, spending within means is fine, but I think we are discussing spending beneath one's means in this thread.

You make it sound like rich people spend less. This is wrong. Yes some of them may not spend money on consumer goods, but they spend that money elsewhere.
They may not buy expensive clothes, cars etc... but they will spend that money on fancy travels and vacations. A couple I know in NY is in that category. They don't have
expensive cars, clothes, houses but always travel first class and stay in 5 stars hotels. They go to Broadway frequently and don't take the cheap seats.