Unfortunately, there is no financial management course at school except at the university for a specific field. People try to make as much money as possible for an easy present and a better future.
However, some things can be learned by trying, failing, and succeeding, and others by learning from the wealthiest. Statistics show that more than half of the millionaires are self-made.
Viral Strange has gathered 9 pieces of advice from rich people for you to have a better perspective on money and lifestyle.
1. The 50/30/20 rule
“Put your saved money into secured, sacred (untouchable) accounts. Never use these accounts for anything, not even an emergency. To this day, at least twice a year, I am broke because I always invest my surpluses into ventures I cannot access.” – Grant Cardone
This rule allows you to divide your income into 3 categories for managing the budget better:
• 50% should be allocated for living essentials, such as rent, utilities, groceries, etc.
• 30% should be spent on personal spendings, such as entertainment, shopping, hobbies, etc.
• 20% should be saved! You can put that money in the bank.
2. Buying in bulk and on sale
“It’s so hard to make a return on regular investments that […] you’re better off buying two years’ worth of toothpaste when it’s on a 50% discount. There’s an immediate return on your money. That’s real savings that you get to put in your pocket.” – Mark Cuban
This rule can be applied to all the products you use daily. Do not buy different products every other day, but try to buy in bulk and when the products are on sale. This will save you money.
3. Don’t use credit cards
“Credit cards are the worst investment that you can make. That the money I save on interest by not having debt is better than any return I could possibly get by investing that money in the stock market. I thought I would be a stock market genius. Until I wasn’t. I should have paid off my cards every 30 days.” – Mark Cuban
Having a credit card is all good, but it might make you spend more because of the idea that you already have money in the bank. On the other hand, using cash to buy things will keep your emotional spending at bay and your feet on the ground.
4. Try to buy from manufacturers
“We were paying for organic produce, and the prices were killing us. So I thought, ‘Where is this store getting its food from?’ We did the research, called the wholesaler, and found out the criteria for ordering. The minimum order was $250. So we started taking orders from friends and arranged to get palettes of food dropped off in our driveway.” – Jerrod Sessler, founder, and CEO of HomeTask
We know that shops have to get their profit from the products they sell. If you can buy straight from the manufacturers, do it. It will be way cheaper.
5. Not spending = Making money
“You don’t spend any money for 4 days, you got a dollar. I’m not spending money.” – T. Boone Pickens, oil billionaire
If you do not spend, you will have more money. Try to keep up with a simple lifestyle. Simple in the aspect of spending, of course. Shop rationally. Do not be impulsive.
6. Live below your means
“I didn’t buy my first luxury watch or car until my businesses and investments were producing multiple secure flows of income. I was still driving a Toyota Camry when I become a millionaire. Be known for your work ethic — not the trinkets that you buy.” – Grant Cardone
People tend to spend more than they have. Being it because they need to feel better or only to show off to other people might make them go poor faster than they think. Living below your means will save you a lot of money and increase your budget.
7. Earn passive income
“My whole goal when I started [working] was to retire by the time I was 35…because the one thing you can never buy is time.” – Mark Cuban
Have you ever burnout working hard from 9 to 5 and still struggling to make it? Well, it happens. However, many people incorporate passive income into their mindset and lifestyle to make the money work for them. So, while you do your actual job, invest on the side and let the passive income come to you. Time is indeed more valuable than money. You have to work smarter, not harder.
8. Surround yourself with successful people
“In most cases, your net worth mirrors the level of your closest friends. Exposure to people who are more successful than you are has the potential to expand your thinking and catapult your income. The reality is that millionaires think differently from the middle class about money and there’s much to be gained by being in their presence.” – Steve Siebold, the author of “How Rich People Think” and a self-made multi-millionaire
Friends either lift you or keep you down. Bear that in mind. People you choose to spend your time with influence your future. You are the average of the 5 people you surround yourself with. So, choose your circle wisely. Successful people always motivate and cheer you up because they share the same vision and mindset.
9. Money isn’t everything
“Money is not everything, and it’s not worth sacrificing your health, family, friends, or other experiences for it. I have lost a few friends and strained other relationships because I’ve spent too much time staying late in the office or hustling on the weekends. Even though I truly believe that having money is freedom, money is really just a tool to make experiences in life possible.” – Grant Sabatier
Money is a good factor in our lives, of course. You can do a lot of things, and sometimes more than those who have less. However, it is not everything in life. You can have all the money in the world, but if you don’t have people to share it and everything that comes with it, it is worthless.
Saving money and getting richer does not always work by following rules and other people’s advice. However, they might help to construct a better perspective on money, mindset, and lifestyle. Your attitude and determination will be the main key to success.
Do you practice any of these tactics in your life? We would love to know more about how you manage your money.