Why Most Financially Successful People Drive Old Vehicles

Accumulating wealth is often a slow process that can take many years to achieve. Some of the wealthiest people out there did not achieve financial success without taking on risk and some sacrifices. The Wall Street Journal recently wrote a blog post on Why the Rich Take More Risks. This is however only part of the equation.

Many have a difficult time making small sacrifices in order to get ahead. This is especially true in the western culture where society measures ones success by their appearance. For instance, if you ask the average United States citizen what a successful person may look like, they will likely respond with an answer such as “Well dressed, driving the latest model luxury sports car, living in a 10,000 sq ft home with a white picket fence and a boat in the garage.

The reality is that nothing could be further from the truth. While one who has these possessions may in fact be wealthy, there is a better chance that they are clinging to their high-paying job and are only 2 weeks away from losing everything. While they may appear to be wealthy, they are really presenting an illusion. Evidence to support this claim can be found several in surveys conducted by the authors of The Millionaire Next Door. The authors surveyed several thousand millionaires and the results were surprising. Some of the wealthiest people do not feel a need to prove their social status. Simply put, they spend their money on wealth accumulating investments and are very modest spenders when it comes to homes, cars, and clothing. Take for instance Warren Buffet who dove a 2001 Lincoln Town Car for five years prior to auctioning it off in 2006 to raise money for charity.

Cutting everyday expenses requires that you sacrifice but the payoff could potentially be huge. Take for instance the automobiles that we drive. Believe it or not, many millionaires skip the car lot and shop on craigslist cars to find their next vehicle. A new vehicle can cost you several hundred dollars each month and this is money that you could be investing in stocks, real estate and other investments. In the end, a new vehicle becomes old and is eventually worthless.

The first step to accumulating wealth is to become an investor instead of a consumer. Don’t give in to the worker bee mentality and you will soon find yourself with a little extra cash in your pocket each month.

By developing good spending habits, you will eventually find yourself in a better financial situation. Like anything else, it will take a bit of discipline but can be achieved by anyone who is willing to put forth the effort. Start by getting rid of that monthly car payment and start putting cash aside.