Four Key Lessons from the Wealthy
from daveramsey.com on 26 May 2010
It's a fact ... people who are wealthy live in ways that make them that way.
They don't believe in car loans, wasteful spending or "easy" payments. Even though most people will never have the wealth of Bill Gates or Donald Trump, that doesn't mean you can't be wealthy if you work at it. In 2004, the number of households worth $1 million (not including primary residences) grew 21% to 7.5 million.
So what are their secrets? The answers shouldn't surprise you.
People who have money give a lot of money away. Dave stresses this! If you help people who are less fortunate, it will teach you to be satisfied with what you have. When that happens, you won't think the key to happiness is a new convertible with a $600 payment attached to it. Charitable giving and "paying it forward" are things that many rich people practice. Households with $500,000 or more in assets give away about 6% of their earnings, which is about three times the average of all American families.
The richest 10% of Americans are half as likely to have credit card debt. They are also 20% less likely to have installment loans.
Many wealthy people don't spend a lot of money on cars as a percentage of their wealth. The richest 10% of Americans spend about 2.4% of their net worth on cars. Translated: You won't likely go to a rich person's house and see 10 SUVs parked in the driveway!
Sixty-two percent of wealthy Americans own or contribute to IRAs, mutual funds, 401(k) plans and other investments.
It takes time to become wealthy. Most people look at a rich person and don't see the sacrifices he or she has made or the frugal lifestyle they have lived. Once you adopt that economical lifestyle, start investing and don't carelessly spend money, it will become less of a sacrifice for you because it will be habit.
Brought to you by Dave's subscription-based community, MyTotalMoneyMakeover.com.