They’re frugal, not cheap
Although it may seem counterintuitive, buying cheaper products is not a common money-saving habit among self-made millionaires. In fact, Corley’s research found that 66% of poor people admitted to being cheap. “Cheap, to them, meant spending their money on the cheapest product or service available,” he explains. But cheap products break or deteriorate at a much quicker rate than quality products, which means you end up spending more in the long run.
He also points out that, when looking for services, those who provide cheap ones are typically inexperienced or not very good at what they do. “If they were good, they would be able to command higher prices. Cheap service providers can get you in a lot of trouble, especially when it comes to taxes, legal representation or even just getting your car fixed. Cheap service providers are able to keep their fees down by paying their staff lower wages. This means they are not getting the best staff or are settling for inexperienced staff.”
Being cheap won’t make you poor, but it will mean you save less money because you’re constantly shelling out for new products or services to replace the low-quality ones you bought in the first place. Self-made millionaires focus on buying fewer, higher-quality products that will last a long time. Of course, there are a handful of exceptions to this rule, including the things money experts tend to buy cheap.
They don’t play the comparison game
Keeping up with the Joneses is more tempting (and common!) than you might think. According to a recent NerdWallet survey, 83% of Americans say they overspend due to social pressures from seeing others dining at expensive restaurants or taking fancy trips abroad. “It’s easy to get caught up in overspending, especially when you see peers or neighbors spending more than you on cars, houses or vacations,” Palmer says.
But when rich people feel green with envy, Palmer says, they put things into perspective—and keep in mind that what they’re seeing may not be the entire picture. “It’s important to take a step back and realize you might not want the same things they have, or they might be creating financial stress for themselves by buying those things,” she says.
They pay themselves first
By setting aside a portion of their income every day, week or month—in other words, “paying yourself first”—self-made millionaires take one of the most important steps toward building wealth, according to Bach. “You’re going to work 90,000 hours over your lifetime; you should keep at least an hour a day of the income,” he says.
He recommends setting aside an hour’s worth of your income each day and then saving and investing it—preferably automatically to begin earning some passive income and reach that high-roller status.