Jun 1, 2009

Eh I think I'm going to be a millionaire lah

How to Spend Like a Frugal Millionaire
by Kimberly Palmer

Today's guest post comes from Jeff Lehman, author of The Frugal Millionaires

Spending Philosophy

Frugal millionaires are unique thinkers when it comes to spending money:
1) they can easily delay their need for gratification when purchasing;
2) they are resourceful in getting what they want by carefully timing their consumer purchases;
3) they make living below their means painless;
4) they don't like wasting anything (especially money);
5) their sense of "self-entitlement" is highly minimized: and
6) spending is OK with them...depending on what they are buying (think: appreciating vs. depreciating assets).

Buying Tips

Cars: Buy used (or off lease) fuel-efficient cars, often with "certified pre-owned" warranties. This warranty can be better than a new car, plus the initial depreciation hit is avoided. Drive the car for a long time and never lease it.

Eating Out: Bring half of a meal home to eat later (this also saves the waistline). Eat at happy hours. Bring wine from home and skip dessert. Value food quality over expensive ambience.

Eating In: Eat better and less expensively by cooking at home. Make it a friends and family event. Get your kids involved. Bonus: You can have that extra drink without worrying about getting busted for driving under the influence. Also: buy day-old bread at the best bakery in town and freeze it. Eat oatmeal, because it's the most cost-effective breakfast food. Get a supermarket "club card" and buy food on special. Play the game of trying to see how much of a discount can be saved off the total food bill.

Clothes: When you buy something new donate something used to charity. Buy traditional clothes, but wait for the off-season to acquire them. Go for high quality — not high price. Buy vintage clothing and avoid logo clothing and keep people guessing who the designer might be. Hint: There shouldn't be one!

Consumer Electronics: Buy low-end gear that has the basic functionality of the more expensive stuff. Don't be the first to buy new technology. Wait at least one lifecycle so the bugs are worked out. Buy refurbished electronics whenever possible.

Computers: Buy more mainstream computers with proven technology. Select higher capacity hard drives, a decent amount of RAM (the memory that the program runs in) and a cost effective processor. Super fast doesn't always equal super good...unless you are building airplanes or bridges. Laptops are a good compromise between desktops and netbooks. Don't go through the pain of upgrading operating systems on existing computers, it's not time efficient and you will probably go insane trying.

Going green: Being green and frugal go hand-in-hand. Yet frugal millionaires don't readily fall for the trendy green hype machine. They typically buy green if it helps the environment and lowers their costs. They look at the timeframe when a product can pay for itself. They do use compact fluorescent lighting, turn off lights and equipment that isn't being used, monitor AC and heat usage (with programmable thermostats), drive efficiently, live in "right-sized" homes and turn off the water when they aren't brushing their teeth or washing dishes. Because they have trained themselves to not waste money they won't waste anything else either. They get into good habits and keep them going. You can, too.


Deng, the very eveel genius said...

Me too!! =) Except that I lose my self-control sometimes. Mainly on skincare. Haha. But I when don't lose it, I tend to linger around the website or store.

Raymond said...

Umm.. I think I'll be a very poor man one day. I'm always waiting for something to ship from somewhere around the world. Currently waiting for my tripod and planning to buy a new hard drive.. very very soon. :/

cheahwey said...

A poor man can become a rich man one day if he learns to plan his finances. *thumbs up!*