One of the strangest aspects of modern society is the number of people trying their utmost to appear wealthier than they are—even to their own detriment. This is fueled, in part, by insane amounts of cheap and easy credit being thrown around by banks under the direction of the central banks and, to be completely honest, it is insanity.
When you step back from the hubbub of life and take an objective look at the behavior of actual rich people, you will be surprised to find that more often than not they are not following those same patterns as those who are outwardly rich but inwardly poor.
This list looks at ten aspects of the life of the typical millionaire that go against our preconceived notions of wealth. It serves as both a guide to understanding the rich, and a guide to copying them in the best possible way: the way that can lead to your own future wealth.
10 Buy Second Hand
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Some things you can’t (or don’t want to) buy second hand: things like underwear, food, and bedding. But when it comes to everything else: rich folk are the first in line to get a bargain by buying second hand. Most significantly, rich people tend to not buy cars brand new (understanding the horrendous depreciation that occurs in the first few years of a new car) or if they do buy a new car, they tend to own it for at least ten years, ensuring they get the full value out of it.
Rich people love antiques (which are not always particularly expensive) and second hand furniture, but most importantly they love the value of buying second-hand. Every penny that is saved by buying and re-covering a second-hand sofa versus a brand new sofa can then be invested or saved for a purchase that helps secure your financial future.
9 Buy Affordable Property
Fundamentally, rich people pay cash for their homes or have at least a fifteen percent deposit. And rich people tend to buy properties no more than two-and-a-half times their annual after-tax income. Rich people also tend to buy older pre-war homes and it is very rare for the affluent to buy a brand new home or have a home built. This probably stems from the psychology of the rich in which a high value is placed on quality (which was undoubtedly higher in the past) and not wanting to carry the initial depreciation of new goods (see item 10).
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It is not the truly affluent people buying McMansions and multi-million dollar show homes. Those properties are for people with massive mortgages, massive egos, and massive financial problems. And, of course, the few amongst us who have won the lottery (poor them—most lottery winners waste it all and end up back where they were but far more miserable for the loss).
8 Buy It For Life
False economy—the idea that buying cheap is always best. It is better to buy one pair of shoes for $100 that lasts five years, than five pairs of shoes that cost $20 but last one year each and require five trips to the store. But try telling that to most people! “Buy it for life” is a trend for some, but a lifestyle for the rich. Wealthy people will spend time investigating important purchases before they make them, to ensure that they are buying something that will last as long as possible and, ideally, retain some of its value.
This is why a rich man will buy a $1,000 suit—a price that seems exorbitant to most of us. But in the long term a suit in that price range will last for decades. And if the man (or his wife) is able to repair their own clothes, they can last a lifetime. When Prince Charles married Camilla Parker-Bowles, he wore a thirty year old suit with patches in it. But he still looked amazing (Prince Charles has the reputation amongst men’s clothing connoisseurs of being an extremely stylish man).