Many of us would like to be rich, though we all see “being rich” a bit differently. For many, it’s a monetary goal; for others, it’s all about having the time and freedom to do as they please. For still others, it may be both.
Generally speaking, the rich have an excess of time. This time allows them to live life as they please, to travel, to focus on experiences, and in this day and age, to flood our Instagram feeds with drool-worthy photos that make us jealous. As they say, time is money; the more money you have, the more likely you are to be able to buy yourself time. This can be accomplished by establishing passive income, hiring help, outsourcing time-consuming tasks, etc.
Being rich, we all think, brings freedom and happiness. However, “rich” is relative in that sense. Research from the past showed us that you only need $75,000 per year to be happy. The idea was that at this income level, you had enough for your needs and wants to be comfortable. More recently, a study showed that this is not true. It said happiness increases with income, even above $100,000. Further, it concluded that income and happiness plateaued only if you were kind of unhappy to begin with.
For those of us that aspire to work less and have more time, the happiness-income level will vary greatly. What’s important to understand is that attaining this goal isn’t a one-time aha moment. It’s a lifestyle change that requires dedication, sacrifice, hard work and time.
The earlier this lifestyle change is adopted, the more likely it is to work its magic.
It’s a lifestyle that requires a great deal of delayed gratification, which we all hear about when discussing finances and spending habits, but what does it really mean in practice?
Here’s what the rich do and you can too.
1 – Forget The Joneses
First of all, they don’t exist. Whoever you think is the person or family to emulate and aspire to, there will definitely be someone more affluent, better looking, more extravagant, and further out of reach.
Furthermore, looking rich is not the same as being rich.
Trying to keep up with a fictional goal is a costly lifestyle. Not only do you spend more money on thins you don’t need, but you also accumulate stuff you never use and then end up purchasing more space to house it all.
In other words, it’s a spending practice controlled by others and becomes detrimental to you.
Those who avoid this become rich because they establish boundaries and prioritize spending on things that truly matter to them.
2 – Avoid Debt
Avoiding the Joneses also helps you to avoid debt because you avoid buying things you don’t need and will never use. Unfortunately, if you fall prey to borrowing and living on debt, it’s extremely difficult to get out, let alone to get rich.
I’ll add that there are different types of debt, and some are worth the expense. Debt on a car or home you can comfortably afford is smarter than credit card debt. Student loan debt for a degree you will use and increase your income is better than high-interest loans that don’t bring in any long-term value.
Delayed gratification can help here because it helps to avoid debt and the trap it creates. You only buy what you can afford (or when you can afford it), and only then if you need to.
The aspiring rich win the money race almost by default when they avoid debt. It keeps their money free for investing, saving, travel, and living life.
3 – Invest Early & Often
The rich make their money work for them. Investing is the way to accomplish this.
The earlier you start, the better. The power of compounding interest works over time, so the more time your money spends in the market, the better off you’ll be.
4- Focus On Value Spending
Delayed gratification, saving, and being frugal doesn’t mean being cheap. Instead, it means buying what you need and focusing on high-value items that last a long time. Get the best bang for your buck.
That attitude extends to investing. You buy assets with an above-average chance of providing reliable cash flows in the future, as opposed to those who have been the best performers in the last few quarters.
Implement These Get Rich Habits Today
Delayed gratification is easier than you think. It almost becomes second nature once you change how you think about money and your purchases.
So, live on what you need, ignore your friends and neighbors when it comes to consumption, save all you can, and keep yourself focused on a better tomorrow.