After studying hundreds of people both rich and poor, author Tom Corley says these are the bad spending habits that rich people always avoid. Following is the transcript of the video.
Tom Corley: There are some bad spending habits that the rich people avoid and that unfortunately poor people and middle-class people have.
This is Tom Corley, I am the researcher behind the rich habits study. The rich habits study is really a five-year study of 233 millionaires, 128 poor people, and what I found out was that wealth, success, being in the middle class, being poor, is all about your habits.
Emotional purchases. These are "oh I love that beautiful red dress or that cute sports car" and you make this emotional purchase and often times it causes you to go into debt if they're a big purchase but if not then you are depleting your savings account your checking account.
Spontaneous purchases are also a poor habit. That's something the rich avoid, well, this is the very reason why at the checkout counters they have all of these goodies for people to buy. The retailer's know that the human brain works off of impulse many times and they'll make this spontaneous purchase and they add up and they could really cause a lot of damage.
That leads to the last one which is living below your means. You want to spend modestly. One of the smartest things you can do is to purchase a modest house in a modest neighborhood. This means you're not only going to have a lower mortgage, you are going to have lower real estate taxes, you're going to have lower utility cost, lower home repairs. One good decision like that and it has a ripple effect throughout your spending. So those are a couple of the bad habits to avoid.