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4 things Rich Won’t Do

What is the surest path to prosperity? We teach our kids things not to do to lay a good moral foundation. But, how often we ask ourselves what we shouldn’t do to crucify our financial freedom? What we shouldn’t do to lay a great foundation for our financial future?

One of the surest ways to know what not to do financially is to learn what rich won’t do. They are rich not by fluke but by developing essential habits to avoid committing bad financial mistakes. Where I am today financially is the total sum of how I have handled my money so far. It’s that simple.

There is no other best way to achieve financial freedom than to develop habits of sound money management. Once you realize that anything you purchase has to qualify as necessity, you will not allow any spending on more than what you need.

Spend Less

Spending Plan

A simple spending plan is — don’t. Rich won’t spend just for the sake of pleasure or to feel good. They won’t spend on an emotional impulse as that’s nothing but a short-lived financial ecstasy. I have developed a habit that has worked well to squash my spending bug. I have focused my thinking more on living a minimalist life. I don’t allow myself to buy anything that wasn’t well throughout and planned ahead of time. This simple habit has instilled a value system that views spending necessary only if it is essential. We are all victims of emotional, irrational spending. If you consider consumption a vice habit then you will kick-start your financial freedom simply by saving more even if you keep making same amount of money.


Buying a house is an American dream. And there’s nothing wrong with that perception. Just a  few years ago, we faced the dire financial circumstances because many people bought houses that they couldn’t afford. A rich won’t buy a hose if it requires more than 28% of his monthly take home pay. Most people qualify for the mortgage based on their gross income but only a rich won’t allow 28% of gross income to make mortgage payment for a house. If you are making $80,000 a year, you will qualify for the 30 year mortgage of $1866 based on your gross income of $6,666 per month. If your take home pay is $4,800 after taxes then don’t allow mortgage payment to be more than $1343. You also pay two to three times more just in interest for a 30 years mortgage compare to 15 years. Buy a house that allows you to qualify for a payment based on the 28% of your take home pay and 15 years term. Now, you will sky-rocket your financial growth by saving a great deal of money while living your American dream.


The best way to buy an automobile is to buy a used vehicle. Most cars lose whooping 58% of their original value after only first three years. Buy a quality car that you will drive till it hits the junkyard. A rich won’t buy a new car — let alone a new luxury car — to jeopardize his financial freedom. Value of a car has an inverse relationship with time. As time goes up, value of a car goes down. Any car that is showing in the hot trend of popular magazines costs more than $30,000. If you buy the same car once the craze fades after 3 years, you pay only $12,000. Imagine saving $18,000 and investing it in a growth mutual fund that returns on an average 8%. I purchased a 2004 BMW Z4 for only $16,000 three years ago. This car had 26,000 miles. I used the car for 3 years and sold it few months ago for $14,000.


A simple plan to buy clothing is to buy when others aren’t. Buy summer clothing in winter. Buy winter jacket in July and your swim suite in January. Retailers heavily discount things that are not in demand. That’s smart spending habit to develop for savings on anything you purchase. Make a detail list of the clothing you already own. Buy only when it’s absolutely required either for a job or a professional engagement. Avoid anything that’s in vogue; fashion clothing costs lot more than conservative clothing which lasts longer.

Interestingly, I’ve found that the single most vice habit is not to squash the emotional buying bug that makes me buy things that I don’t need. I believe that no matter where you are in your financial crossroad, you can achieve financial peace by knowing what rich won’t do.

It is the heart that makes a man rich. He is rich according to what he is, not according to what he has.
– Henry Ward Beecher








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Comments (4)

[…] unconventional for us to be frugal with our time as we are naturally inclined to focus on financial value for every frugal habit that we develop;but,  everything we do in life is to get more free time so […]

I long to move to Hawaii, where the formal dress code is a simple Aloha shirt and khakis. The rest is just a t-shirt and shorts. Basically minimal clothing budget!


Smart minds think alike! That’s my destination as well for the retirement.

Great advice Shilpan, loved this article.

It’s very hard to separate yourself from the emotional impulse of buying something (or NOT buying), but it’s crucial!

I have to admit it took me years of discipline to get into control. But I’m sure glad I did.