Unless you win the lottery or suddenly inherit a fortune, becoming a millionaire typically requires hard work, patience, and discipline. Building wealth takes time, but it's something that just about anyone can do if they’ve got the right money mindset. In fact, you might be surprised to know that how much money you make isn't necessarily as important as what you do with your resources.
Besides a high net-worth, wealthy people also tend to share a similar philosophy when it comes to managing their money. If you're interested in joining the ranks of the financially prosperous, it pays to gain some insight into how they achieved their success. Here are just a few simple financial lessons that can teach you a lot about what it takes to build long-term wealth.
1. Shop Around for the Best Deals
It's practically impossible to build wealth if you're not spending your money wisely. Knowing how to comparison shop can help you keep more cash in your pocket. That doesn't mean you have to obsess about everything you buy, but it does mean you should do your research before making a purchase. For many wealthy people, that means shopping online in order to find the best deals.
According to a report from Martini Media and comScore released earlier this year, wealthy people were 47 percent more likely to shop online compared to individuals making less than $100K per year. Affluent shoppers surfed the Internet for deals on everything from movie tickets to household items to clothing, spending an average of $184 on each purchase. Wealthy shoppers are more likely to visit luxury sites, but they're still making a significant amount of purchases through mid-level retailers, which suggests they appreciate the value of bargain shopping.
2. Be Proactive When It Comes to Your Career
If you've been stuck at the same rung on the career ladder for a while, you could be inadvertently sabotaging your financial goals. Keeping your eyes on the big picture, rather than focusing on where you're at, can help you get unstuck and start moving you in the right direction.
One thing that wealthy people tend to have in common is a willingness to be proactive when it comes to their career. This involves evaluating what your long-term goals are and mapping out a plan to achieve them. Depending on your situation, this could mean making a lateral move in your company or even taking a step down. You may feel like you're going backwards, but tackling a new challenge could provide you with the skills and experience you need to move up later on.
3. Don't Fall Victim to Lifestyle Inflation
Wealthy people know that just because you have a lot of money doesn't mean you have to go for broke. If you're starting to build your savings and investments, it can be tempting to want to upgrade your lifestyle to match your fat bank balance. While you don't have to continue living like a college student, you also don't have to spend more just because you have more.
Berkshire Hathaway CEO Warren Buffett is a prime example of how not to subscribe to lifestyle inflation. Despite a net-worth approaching $60 billion, the 83-year-old still lives in the Nebraska home he purchased for $31,500 in 1958. Before you go out and buy that flashy new car or spend thousands on a dream vacation, it's important to think about how much further your money could go towards building your nest egg.
4. Be Smart About Buying a Home
Owning a home is the American Dream, but the economic upheaval of the last few years has made it a less attractive option. Renting a home has become an increasingly popular option, even among the wealthy who may not face as many obstacles to home ownership. If you are planning to buy, the key is to keep your mortgage affordable and purchase a home that fits your needs financially.
Despite his wealth, Facebook founder Mark Zuckerberg knows the value of renting. Zuckerberg was a long-time renter, paying around $8,000 a month for a modest home in Palo Alto before finally purchasing a home for just $7 million. If you're looking for more flexibility in where you live and you don't want to worry about your investment losing value, renting may be the best way to go.
5. Always Have a Plan
The smartest move you can make when it comes to building wealth is to always make sure you have a plan. Setting goals and developing a strategy for achieving them drastically improves your chances of getting to the finish line. Whether it's getting rid of your debt once and for all, building savings, or investing, putting a plan down on paper can help you keep your eyes on the prize.