What separates the world’s richest people from the rest of us? Ambition? Luck? Financial acumen? Probably some combination of those factors and many more. The one thing they all have in common however is advice. You don’t get to be uber wealthy without accumulating some knowledge along the way of how to manage that wealth.
That’s why we’ve compiled quotes, anecdotes, and budgeting practices from some of the richest men and women on earth and condensed them down into three tips that will help even hundred-aires make the most of what they’ve got. After all, who better to take money tips from than those who have earned a lot of it?
This savings tip should come as no surprise to anyone, even if you do bring in a 7-digit salary. Living within your “means” isn’t relegated to just the cash you have, but the money you want to keep. Even the incomprehensibly rich pay heed to how much of their money they really need to put into their basic human needs and how much is just frosting on top.
The classic example of this is CEO and legendary investor Warren Buffett, who as of this writing is worth a reported $78.7 billion. Buffett has famously lived in the same 6,000 square foot Omaha, Nebraska home, which he bought for $31,500 more than 15 years ago.
Other frugal billionaires like Facebook founder Mark Zuckerberg, who prefers VW hatchbacks to Maseratis, or business tycoon Azim Premji, who opts to fly coach over first class or private jets, focus on the utility of their purchases rather than the status attached to them.
At its most basic level, this preference for simplicity, even when the option for extravagance is available, highlights that the basic necessities of your life can generally be had at a discount. For most people, that may mean buying generic items at the grocer or taking advantage of public transit when available. In any case, chances are good there are small extravagances eating up you more limited cash reserves that, if you look around for a more frugal option, could get you a tiny bit closer to that first million.
Start Early, Start Small
One of the most enlightening and applicable things you can learn from the wealthy when it comes to money is patience and persistence. Carlos Slim, whose net worth is set at $51.2 billion, has claimed that he began making investments when he was just 12 years old.
On that same note, Elle Kaplan, the founder of financial management company LexION Capital, said in an interview that she “made [her] first million by saving from every paycheck, and growing that wealth through [her] own investing acumen.”
Wealth, fame, and success, all grow from a resource more valuable than cash. They require time and patience. The sooner you begin saving toward a new car, a house, your retirement, the more time both you and your money will have to grow. It is not simply a matter of compound interest either. The earlier you pay attention to how to properly save and invest your money in a way that works for you, the more knowledge you will have to pull from to make more involved, and profitable, decisions with it later.
Money isn’t the priority, you are
Finally, let’s end on something self-affirming.
With a net worth of nearly $3 billion, Oprah Winfrey is one of the richest women in the world and arguably the most influential media figure in America. And she earned all that wealth after beginning her life in poverty as the daughter of a housekeeper in rural Mississippi. During her decades-long career, Winfrey has been vocal about how she achieved her success by pursuing her passions and acting toward goals that actively re-enforced her own values. While it may seem saccharine or cliche, Oprah Winfrey did become a multi-billionaire by promoting that message of positivity and self-love, so it is certainly a resonant idea at the very least.
What does this have to do with how you, or Oprah for that matter, uses money? Well, in the latter case, the billionaire media mogul invests money in herself and the projects she most deeply believes in. Can you say you are using or planning your finances in the same way?
The end goal of saving money isn’t to build up a gigantic war chest of funds for the future. You should have goals and plans for where your money is heading and you should understand why you want it to go there.
The reason for this is two-fold: first, if you have goals for growing your money, whether saving for college or saving for a couch, you can begin making active progress toward those aspirations; and, second, knowing where you want money to go will help keep you alert to when your cash is going to something that isn’t contributing to your needs or aspirations. By quickly recognizing what are frivolities, you can stay focused on a downpayment for a car or an apartment with (or without) any roommates.