Life & Money Lessons from the Wealthy

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money-bagI recently read a great article in the Washington Post by Barry Ritholtz, who has worked with some very high net work individuals with hundreds of millions of dollars (or more), offering a list of life lessons from the wealthy.

I think it’s important to see what we can learn from people who have a lot of money – not because they’re better people, and not because having a lot of money is an important goal in and of itself – but because learning from people who have achieved such an extreme level of wealth can teach us something important about how we relate to wealth, and how we truly want to shape our lives for the better.

Here are some of Ritholtz’s life lessons from the wealthy, and some additional thoughts about each of them:

It’s better to be rich than poor.

Sounds simple, right? But to me, the lesson is: try to be happy that you’re not poor. Do you have health insurance, an education, a savings account, a retirement fund and the ability to travel on vacation? If so, you’re better off than 90 percent of the rest of the world. Enjoy what you have. The wealthy can afford nicer vacations, more prestigious educations, and world-class health insurance, but beyond that, your lifestyle is not so different from theirs.

Time is more valuable than money.

What good is a high-paying job if you never have time to see your family? Don’t let your competitive drive or sense of ego hold you back from achieving a healthy work-life balance. Consulting guru Alan Weiss says, “Real wealth is discretionary time.” Your bank account is just a number. If you don’t have control of your time, you’re not really free – or truly wealthy.

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Memories are better than material things.

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Do you think wealthy people love to spend their money on fancy cars, expensive watches, and designer clothes? Think again. According to Ritholtz, most of the wealthy people he’s talked to are most excited not about the “things” they buy, but the unique “experiences” they enjoy. It all comes down to spending time with the people you love, sharing activities and experiences that you can enjoy together. A modest lakeside cottage with your family, or greens fees at a public golf course with your father, can be just as rewarding as a million dollar beach house or a private country club membership.

Watch your “lifestyle leverage.

Many people get sucked into the “fast track” lifestyle of expensive cars, big mortgages, fancy suits, and early mornings waiting in line at the airport to travel for business, only to wake up one morning to realize that they’re stuck in a pair of “golden handcuffs:” they have a high-paying job they can’t afford to quit. The more debt you’re in, the less freedom you have. Steve Jobs is a billionaire, and he wears turtlenecks, jeans and running shoes. Most American millionaires drive old used cars. Avoid the “golden handcuffs.” Frugality isn’t glamorous, but it gives you freedom.

Goals are important.

One of Ritholtz’s friends is a serial entrepreneur who has built and sold companies for over $1 billion. The reason for his success? Setting goals and sticking to the plan. In the article he says, “I am always surprised at how many people have no goals. They simply let life’s river flow them downstream.” Do you want to take better control of your financial life and put an end to your money worries? Even if you don’t become a billionaire, you can still make dramatic improvements to your situation and it all starts with setting goals.

I strongly recommend Ritholtz’s article on life lessons from the wealthy. Anyone who wants to improve their relationship with money and strengthen their financial status can learn some good lessons from these stories.

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