- Warren Buffet, who presently has a net worth of $84.6 billion, is still residing in the same house that he purchased in 1958 for just $31,500
- According to O’Leary, this habit of only buying things that he needs has helped him maintain growth in his own personal investing
- Tech billionaire and star of “Shark Tank” Mark Cuban advises people to ditch credit cards and pay off any balance
- Bill Gates who has a current net worth of $133 billion has invested a major chunk of his wealth in a diversified portfolio
Even if you don’t have a net worth in billions, you can still follow the example of billionaires to better manage your finances. In fact, even if you don’t earn millions each year, you can build your wealth by simply emulating the financial habits of the ultra-wealthy.
Billionaires usually offer amazing advice when it comes to creating and growing wealth. In several cases, not earning more but efficiently managing what you have can successfully lead to wealth creation.
Here are the top financial habits of billionaires that you can follow to manage your money like the super-affluent people.
1 – Live Within or Below Their Means
Living within your means is one of the most effective financial habits you can develop. Warren Buffet, who presently has a net worth of $84.6 billion, is still residing in the same house that he purchased in 1958 for just $31,500. Even though Buffet is one of the wealthiest people in the world, he is known for never spending more than $3.17 on breakfast!
Another similar example is that of Jack Ma, founder of Alibaba and one of the wealthiest men in China. Despite his net worth of $22.8 billion, Ma continues to drive a Roewe RX5 SUV, which costs around $15,000.
Jeff Bezos, the founder of Amazon, continued to drive a modest Honda Accord even after being crowned as the world’s wealthiest man in 2018.
2 – Spend on Things they Need
In many cases, we spend money on things that we like but don’t need. It’s highly advisable to spend money on things that you need to stop yourself from overspending. Kevin O’Leary star of “Shark Tank” still lives by this rule. For instance, he chooses to make his own cup of coffee at home rather than spending $2.50 to buy it.
According to O’Leary, this habit of only buying things that he needs has helped him maintain growth in his own personal investing. So, rather than spending money on unnecessary things, he invests it, which helps to make more money for him each year.
3 – Avoid Debt as Much as Possible
In certain cases, such as education, debt might be unavoidable. However, the affluent recommend staying away from debt as much as possible. Tech billionaire and star of “Shark Tank” Mark Cuban advises people to ditch credit cards and pay off any balance. According to him, the money saved on credit card interest is much better than any investment return.
The same holds true for other debt as well. Cuban says that if you pay off a loan with a 6% interest rate, it’s as if you’re making a 6 percent return which is much safer than investing in real estate, stocks, etc.
4 – Invest Their Wealth
Wealth stored in a savings account doesn’t really do much as the returns don’t help beat inflation. Even though saving money is better than spending it, the affluent know that investing money is far better than simply saving it.
Bill Gates who has a current net worth of $133 billion has invested a major chunk of his wealth in a diversified portfolio of real estate, financial assets, and collectibles to ensure that his wealth continues to increase.
A Word of Warning
Keep in mind that adopting the top financial habits of billionaires won’t turn you into a billionaire, but they will definitely help to better manage and grow your wealth!