Are rich people frugal?

Posted by Fitz Villafuerte under Personal Finance on June 11, 2016

Is it true that most rich people are frugal? If so, then does that mean one needs to be frugal to become wealthy? I guess my question, if you put it in another way is that what’s the reason why rich people are good at scrimping?

Answer:

How do you think they got so wealthy? By spending everything they made? That’s how people get poor!

You’ve probably heard the phrase that it takes money to make money. That is somewhat true, but where do you think that money comes from?

I can tell you from personal experience that the money needed to invest in things that bring in more money comes as much from saving as it does from your income.

Frugality is a huge part of how they became wealthy in the first place. Most people spend the majority of their cash on hand. Without savings, down times become far more expensive than necessary.

By forming a cushion (emergency funds etc.), saving habitually and investing extra money beyond that base, even someone from a poor background with an average income can rise above poverty to new levels of opportunities.




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