076: Millionaires Do Not Do this

Millionaires Do Not Do this

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Cortes Law Firm

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Transcript

It might surprise you, but millionaires have a different mindset when it comes to their money. They don't overspend on a college degree. They don't buy a car they can't afford. They don't buy a house they can't afford. And they don't use credit cards. Getting a degree that will never pay off. A $120,000 student loan for a job that will never pay more than 30, $32,000? Well, do the math and you'll quickly realize that student loans can and will financially suffocate a person. It often becomes impossible for a person with high student loans to even buy a house. Well, I'd love to travel more, but I have crushing student debt. Employers more and more are running credit checks on potential employees. And student loans, high student loans, can adversely affect credit scores. The worst thing is that student loans, well, they don't go away. If the bank forecloses on your house, there is some resolution. The house gets sold. Usually some of the money pays off part. If not all of the mortgage, you do have to move out, but it's over. With student loans, the money is gone and you can't sell your degree to somebody else. It's your degree. You are stuck with student loans for life and they are rarely even discharged in a bankruptcy. Buying a new car to keep up with your friends. You know what I'm talking about here. That friend who always seems to have a brand new car every two years. And they might try to make the excuse that it's a leased car and they're saving money and taxes, blah, blah, blah, blah. The reality is that most people are car poor and struggle to make their monthly payments. They get that lease because they can't actually afford to buy the car. Same goes with the house. Think about it and be honest. How many people do you know that are house poor? Unfortunately, America has become addicted to living in houses and driving cars that they cannot afford. And they will never ever get ahead because they are living paycheck to paycheck. Just to keep up with their friends most of the time. Using credit cards to bridge the gap during hard times. I don't need to tell you how bad it is to keep a credit card balance of any kind. It's bad. And I know it starts off innocently enough at Christmas time or for a family vacation with the promise to yourself of paying it off in two months or three months. The problem is people make that same promise to themselves every single month or every time a new situation comes up. This is the last time. And they're never able to catch up. But do millionaires refuse to spend money on? Number one, never buy new cars in both my personal and my business life. I have not purchased a new car in over 15 years. That is impressive. You know how I just mentioned those folks who buy a new car every two to three years. Those cars are usually maintained really well. And they're usually under a warranty. They're still under that factory warranty. So we're able to buy a like a new car at a very substantial discount. Not only are they less expensive. Well nowadays, not so much, but they are usually less expensive to ensure as well. If possible, it's also nice to pay cash and avoid payments altogether. Growing up, we had a neighbor down the street that told me that early in his career, he saved as much money as he could for two years to buy a car for cash. During those two years, he walked or took the bus everywhere he needed to go. Once he paid cash for that first car, he would keep it as long as possible. And he would save those car payments in his bank account. So he was the one that was making the money, not the bank, not the car dealership. And it was time to buy a new car. He would sell the current car, use part of his savings and the money from the sale of this car to buy a new one. So instead of somebody else profiting off of his money, he made money. Needless to say, he quickly became a millionaire. Number two, never buy the latest fashion trends. Think of billionaires on TV these days. Elon Musk, Zuckerberg, Steve Jobs, when he was all live, they all were the same very basic outfits. Now that might be the extreme case, but it's also an important lesson. Buy quality clothing that will last. Don't get sucked into spending a ton of money on the latest trends. Replace clothes when they wear out. Number three, never waste food. Buying too much food and throwing it away is the same thing as well. Throwing money away. Globally, approximately 119 billion pounds or $408 billion in food is thrown away every year. Americans, we make up 40% of that wasted food. The average American family wastes $1,600 a year on food. Think of how that $1,600 could be invested annually over 20 or 30 years. If you're not going to eat it before it expires or goes bad, then don't buy it. You are literally throwing money away. Never mow your lawn. In my first job as an attorney, one of the senior partners told me as soon as they hired me, and I was a little offended because his goal was for me to bill as many hours as possible. But he was right. I love taking care of my lawn, but as soon as I realized how much loving my lawn was taking away from me both physically and financially and from my family, I realized that that was not a good idea. I currently have a friend who makes fun of me every single time I see him because I pay somebody to mow my lawn. But he never has time to do anything on the weekends because guess what? He's mowing his lawn. It easily takes an entire morning or afternoon, and that is time away from family and from friends. Not to mention how tired I would be afterwards. Never mowing your lawn is really an analogy to hire people for jobs that take up too much of your time and are inefficient for you to do. Millionaires know this. Delegate work and pay people to do simple tasks that are huge time sucks from you. Millionaires don't waste money, and they increase their efficiency by paying others to do the things that waste their time. I know I've thrown a lot at you today, so that's why we've prepared our free guide on estate planning. I'll put a link to it in the description below and in the comment section below that so that you can download it and get started in the right direction. And to help you out even more, watch this video up here and this video up here. If you enjoyed this video, then guys, please smash that subscribe button and click on the like button and also click on that little bell so you'll get notified every time we post a new video. Have a great day and an awesome week. And as always, thanks for watching!