While researching his book “The Millionaires Next Door”, the author Thomas J. Stanley found something unusual. He had asked more than 500 millionaires about their habits. Many of them told him that they did not – as one might think – lavishly, but rather frugally. Instead of spending their money on luxury goods, they are more likely to put it into investments that will keep their wealth growing.
The author also found that most of the millionaires did not inherit their money. 80 percent of the people interviewed by the author made their fortune themselves.
In his book, Stanley describes what successful millionaires spend their money on and what habits they avoid.
1. You don’t have a wallet full of exclusive credit cards
In a multi-million dollar lifestyle, many think of buying countless luxury items with exclusive credit cards and traveling the world. Stanley’s research shows, however, that this is not the case. Most self-made millionaires don’t have an Amex Platinum credit card in their wallet, but one with low fees.
That’s not to say that millionaires don’t use credit cards: 59 percent of people surveyed said they use a cheap Visa card. 56 percent have a MasterCard. These also offer discounts and benefits, but are significantly cheaper than prestigious Amex cards.
It is also worth noting that the benefits and perks of paying with a credit card should only be used if you can balance the account every month – otherwise debts will accumulate.
2. They do not give their children luxury gifts or finance them as adults
According to Stanley’s research, millionaires are always willing to spend money on the education of their children and grandchildren. But they would also know where to draw a line. Because they are aware that parents who give their adult children a helping hand financially have significantly lower assets than parents whose children are economically independent.
The same applies to expensive gifts. Around 60 percent of the millionaires Stanley asked for his book said they had helped their children out to buy a house. But they also said that otherwise they don’t tend to give anything to their offspring. Around 32 percent of them financed their children’s school leaving certificate. Only about 18 percent gave them real estate that would increase their income.
3. You don’t spend all the time investing in stocks
Owning stocks is an integral part of the wealth strategy of many millionaires. According to Stanley’s research, 95 percent of them own shares. However, they do not come into contact with these investments very often in their everyday life. “Forty-two percent of the millionaires we surveyed hadn’t traded any of their stock portfolios in the year prior to the interview,” says Stanley.
Because millionaires would tend to make long-term investments and hold them for many years. That means they don’t have to spend hours every week or even every month managing their investments.
This text was translated from English by Franziska Telser. You can find the original here.