We often wonder what is the secret of rich people like Mukesh Ambani and Ratan Tata, how have they become so rich? We often read their stories of success and try to seek investment lessons from their investing habits.
However, we not only need to learn a lot from their investing habits but there is much to learn from their spending habits also. You might wonder that these rich people as they have such a big corpus, would always look on spending luxury items and luxury habits, but this is not the whole scene. Something is interesting in their spending that we must learn from these billionaires.
What would you call a person who spends Rs 2 lakh a month? Extravagant? Hold on. Her monthly salary is Rs 2 crore. So, monthly expenses come to just 1 percent of her income. Now, is she frugal or extravagant?
Common people generally think that rich people love roaming around in swanky cars, sinking into their business class seats on flights and in high-street shops. But you would be surprised to know that this is not the same in the case of all rich people. The rich don't necessarily spend all that much, especially when seen about their income.
Let us see what spending lessons we can learn from these rich people and also their spending habits that are best avoided by the not-so-rich.
They Are Careful With Their Spends……….
Financial Advisers say that the rich don't spend extravagantly, in fact, they think at least twice before they spend. They say the most conservative people towards spending are the rich from the IT sector, they are so much confined with their spending than compared to those who work in other industries.
Kavitha Jayaram, founder, and head of Wealth Managers United (India), a Bengaluru-based financial advisory firm says that she has a good client network, in which most of them are rich. About their habit, she says that many of her clients would love to buy a mid-sized vehicle when they can easily afford the best of the cars. This is because these people are mostly focused on spending for their needs and not for their desires.
They Are Skilled Spenders…………….
The rich are not habituated to only spending on lavish and luxury items, they do look for cheap and best deals and yes they are also habituated to bargaining on best deals. They usually have a network that allows them to figure out the best deals, whether they be about the latest iPhone online or about a cheaper offline deal.
Financial advisers say, that their rich clients often look for ways through which they can cut down on their extravagant expenses. A Pune-based financial advisor Sujata Kabraji narrates the case of one of her clients, who had three BMW cars, till some years ago. As Uber became popular, this client of hers sold two of his cars and started using Uber more.
So basically, rich people are not habituated to spending on luxury items in fact like normal people they do look for the best deals and also go on bargaining when needed.
They Have A Habit Of Giving Away……………
Yes, this is the most important and essential part of their spending habits. Rich people think that a part of their income must be given away for a good cause. And this can easily be witnessed by us. You might have seen that in the challenging pandemic COVID-19 situation in India, many rich people donated good amounts in the relief fund to help those who were suffering during the pandemic.
Mrin Agarwal, Founder of Finsafe India says, not only the high net worth rich people but also many first-generation millionaires are observed to have the urge “to give something back to society.” The entrepreneurs who themselves have gone through difficult situations understand how necessary it is to offer help to those who are in need.
Financial adviser cites examples of many rich who try to offer help to those in need in many ways, and only by donating money. Such an example includes a business family that supports a medical clinic that takes care of terminally ill patients.
So basically, these are the spending habits of rich people, and you must not be surprised to know that not only their investing habits but their spending do play an important role in making them rich.
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