#889 Treat Your Money Like A Wealthy Business Person

22 May

warren buffett

Warren Buffett has lived in the same house since 1958. Photo via flickr by Art Comments.

If you’re dedicated to being thrifty, then you’re well down the path to treating your money and resources like a wealthy business person. First off, successful, wealthy individuals have budgets. When you have a lot of money, you want to know where it is, where it’s going and where it’s coming from. Second, they’re thrifty. Many successful business people have modest homes, cars, limited cash on hand and bargain shop. Don’t think they don’t have a shopping list and stick to it.

Here are some more ideas that you may or may not be practicing that successful (and rich) business people use to become successful, stay successful and pass the formula for success onto their children:

      •  Improve yourself and your knowledge. In no way does learning ever stop. Not after high school. Not after college. Not after you retire. Reading new material and constantly seeking information is a great way to improve yourself and your knowledge. And it’s not only reading related to your industry or interest. Some of the best advice I got from someone in order to do my job better as a fundraiser, which involved a lot of cocktails and small talk, was to read one magazine or source of information totally unrelated to my interests per month. Like picking up an copy of Cycling magazine and reading it cover to cover.  It’s shocking how quickly the material becomes relevant in ways you never imagined. Reading and getting info on your own industry will do nothing but help you on a daily basis. Reading in your own industry and interests is easier and less daunting than picking something you initially care nothing about.
      • Rely on other people’s strengths.
        handshake

        Photo via flickr by buddawiggi.

        This means valuing relationships and identifying other people’s strengths and how they can complement your weaknesses or areas in which you have no knowledge but need someone who does have knowledge. You can’t do everything yourself. Surround yourself with good people, and you’ll reap the rewards. Whether you’re building a team to work with or hiring a babysitter, relationships will make your life easier if you pick the right people and cultivate the relationship to ensure reciprocal benefit and enjoyment. For lots of people the word “networking” strikes fear into their hearts. Networking means building positive relationships and staying in touch – even if it’s only twice a year to say “Happy Birthday” and “Happy New Year.” Those relationships will come into play and reward you throughout your life.

      • Set goals. Goals usually mean physical goals versus monetary goals… Make eight more sales calls per month. Write a blog post per day. Finish a Masters by the end of the year… Instead of make $10,000 more by the end of the year or $1,000 more by the end of the month. The goals will move along and are achievable because you are in charge of pursuing the completion of the goal. Life satisfaction will follow, and most likely the money as well.
      • Treat every decision like an investment.
        money bills

        Photo via flickr by sushi♥ina.

        Ask “What is the benefit?” “What am I getting out of it?” “Is it worth it?” “If I do this then how does it affect everything else in terms of time, money and other resources?” Business people are very talented at looking at the cost-benefit of decisions when it comes to their investments, including time.

      • Keep innovating. This does not mean only coming up with big ideas or groundbreaking ideas to cash in on. This does mean thinking about how to do things that you already do better or really well. A lot of successful people have built their success on doing something ordinary really well. This means always thinking and always innovating, even if it means on the same old thing.
      • Numbers don’t lie. When it comes down to it, statistics and numbers are a powerful tool to use to help you analyze a situation and make a decision or change your course of action. Business people don’t just make a decision based on a feeling, it has to be a feeling backed up with numbers or evidence that make any kind of sense.
      • Think strategically. Not everything is a huge gain. Small gains accumulate over time for a large gain or to lead to a large gain. The small moves are part of the larger game.
      • Learn from failure. In the game, there will be failures. Wealthy people often have failed more than the average middle class citizen, which makes sense if successful business people are putting themselves out ahead of everyone else more in their quest to succeed. But wealthy business people learn from their failures in order to hone their way of doing things until success becomes almost inevitable.
      • It’s cheaper to walk away sooner. If things don’t feel right, it’s much cheaper to way away sooner and leave a deal on the table. Unfortunately, how this applies to most middle class citizens is marriage. Walking away before getting married is way cheaper than going through a divorce, both financially and emotionally. So don’t let hurting feelings, wanting to go through with it because you said you would or any other reason keep you from walking away from a deal that doesn’t seem right. Not buying a house, not getting married or not going in on any financial commitment is better if it doesn’t feel right then suffering the financial fallout, which always includes emotional fallout as well. Business people know to walk away.
      • Stay healthy. Being healthy is often associated with being wealthy. Because when something goes wrong, the wealthy can afford the best care or care at all. But a large part of being healthy is preventative care, which anyone can afford. Exercising, eating well, not incurring health and financial costs associated with being overweight are all preventive measures anyone can take. If you stay healthy, you can mimic the good body and mind care of the wealthy. Good health insurance plays a part when something does go wrong. Sadly, the poor and middle class lose out big time on this in the United States.

I originally was going to say treat your money like a wealthy person, but there are all kinds of wealth. Inherited wealth, suddenly acquired wealth, hard won wealth… the most pertinent is the wealth of successful business people because they have actively become successful (or continued to be successful if inherited wealth was a part) and have healthy money habits that allow them to continue being a successful business person. It’s really much easier than you think. All of these suggestions are good for you no matter what.

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