Let’s be honest, most of us daydream about what we would do if we were rich. We imagine doing stuff like quitting our jobs, buying a boat, and spending the rest of our lives sailing around the world. It brings a certain satisfaction dreaming about such things, but is this really how rich people spend their time?
Several years ago a couple of researchers named Thomas J. Stanley and William D. Danko wondered the same thing. Their curiously led them to spend several years studying the habits of millionaires. Their findings are documented in the book, The Millionaire Next Door: The Surprising Secrets of America’s Wealthy(Great book!).
I highly recommend you check it out if you are at all interested in someday becoming wealthy. You might be surprised to learn that most self-made millionaires are extremely frugal. In fact, out of all the millionaires they profiled, the most wealthy drove the oldest cars and had smaller homes compared to their peers.
Here are some of the most surprising tactics used by millionaires to manage (and grow) their money.
Spend Time Researching Investment Opportunities
On average, millionaires spend almost 20% of their income on investments. More importantly, these people spent time activity researching their investments. In other words, investing isn’t viewed as simply a retirement plan, but rather, one of the most important drivers of their wealth and future security.
Keep a Budget
Surprisingly, most millionaires have a budget and consider it important to stick to it. In other words, they have a plan. And in the end, this really does make a huge difference. How many people do you know who actually keep a budget?
Don’t Buy Luxury Cars
The most popular make of car among millionaires is Toyota. In fact, over 80% of luxury cars are purchased by non-millionaires –that is, people trying to create the illusion of wealth.
I would love to hear your thoughts on this. Are you surprised? Perhaps you have read the book and want to contribute. If so, feel free to leave a comment below.