What is the lifestyle of billionaires
Many millionaires have these 6 characteristics in common!
If we asked 100 people on the street whether they would like to be a millionaire, they would likely all answer yes. But if we go a step further and ask whether they would also be willing to follow certain rules for this, a great many people would probably rather decide against it.
Often the reason lies in our idea of how we want to live. And when we look at what the millionaires have in common, the rules seem very boring and require discipline and perseverance.
Rich people often have the following characteristics.
1. No unnecessary expenses and a relatively modest lifestyle
Many millionaires do not live in luxury, but in normal, inconspicuous circumstances. It may be upbringing or even just intellect that tells them that large consumer spending is capital destroyer and only makes you happy in the short term.
For example, many doctors are millionaires. But for very few we would guess it based on their lifestyle. They work a lot and often into old age, although in most cases they probably don't have to.
In this way they benefit from the effect of a high income and relatively low expenditure, which enables them to save and invest large sums of money. The compound interest effect is therefore on their side. Most of the time, they live in the same house for their entire life and rarely buy a new car.
To millionaires, financial freedom is often more important than the status symbols that destroy capital. Financial freedom increases personal happiness, while status symbols are usually only intended for the outside world.
2. Long term mindset
Millionaires often think in long terms. This makes them handle money differently. They understand that in the short term it makes no difference whether we smoke half a pack of cigarettes a day or not, for example, but in the long term it does. Not only for your health, but above all for your wallet.
Just saving this expense can make the difference in the long run whether we become wealthy or not. The reason for this lies in the compound interest effect when we invest the amount instead of consuming it.
3. High interest in learning
Many millionaires have an above-average interest in learning. In 80% of the cases they have studied, but this is not a requirement. Tesla's (NYSE: Tesla) Elon Musk read every book his father (an engineer) reads as a child, and did Berkshire Hathaways (NYSE: Warren) Warren Buffett spends a lot of time reading books. The wealthy also spend more time planning their own finances.
Many millionaires are self-employed or own their own businesses. This way they can focus on the area that interests them most. As a result, they often work an above-average number of hours per week, which can pay off in greater success.
5. High savings and investment rates
Rich people save and invest more than the average, regardless of what job they do or whether they had rich parents or not. Most wealthy people come from average backgrounds and invest around 20% of their earnings annually.
6. Long term and defensive investments
Most millionaires don't shift their investments all the time, but buy them in order to stay with them for the longer term. True to the saying: “Back and forth empties your pockets.” Most of the time, they take a defensive approach and only invest in solid investments.
Of course, there are millionaires who have a different lifestyle and therefore attract more attention, but they are the exception rather than the rule.
The post These 6 characteristics are common to many millionaires! appeared first on The Motley Fool Germany.
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Christof Welzel has no position in any of the stocks mentioned.The Motley Fool owns and recommends shares of Berkshire Hathaway (B shares) and Tesla and recommends the following options: Short September 2020 $ 200 call Berkshire Hathaway (B shares), Short January 2021 $ 200 Put on Berkshire Hathaway (B Shares) and long January 2021 $ 200 call Berkshire Hathaway (B shares).
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