Yahoo Finance Self-Made Millionaires: 8 Frugal Habits We’ll Never Give Up
People tend to think millionaires spend money like they can print their own cash because the whole point of making it in the first place is so you can live the good life, right?
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Not necessarily. Those who achieve self-made wealth usually want to avoid going from rags to riches only to spend themselves right back to rags.
GOBankingRates spoke with two self-made millionaires about the thrifty habits that they still cling to despite their wealth. They’re on different ends of the age spectrum and made their money in different industries, but they share a common perspective — neither takes their good fortune for granted and both still live by the frugal habits that got them there.
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A Legal Finance Industry Executive Sticks With What’s Worked All Along
Rory Donadio is the CEO of Tribeca Capital Group. With over 30 years of experience in the niche field of litigation finance, he has witnessed the industry evolve from a highly specialized and obscure financial sphere into a multi-billion dollar sector.
Building a company that was a pioneer in a lucrative and rapidly growing industry made Donadio a wealthy man. But his frugal lifestyle was as important as his professional success in his ability to achieve financial security — and he’s not looking to change any of those habits now.
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Distinguishing Wants From Needs
Donadio knows that if you can’t tell the difference between things you’d like to have and those you can’t live without, you’ll never get rich no matter how much you earn.
“One frugal habit that has stuck with me throughout my journey to becoming a self-made millionaire is distinguishing between needs and wants,” he said. “This simple yet effective habit helped me prioritize my expenses and save a significant amount over time. Even with a seven-figure fortune, I continue to live by this principle, making conscious decisions about my spending.”
Putting Saving on Autopilot
Rich people tend to be diligent savers because cash is the fuel that feeds their investments — and removing the chance for human error is a modern privilege that should be a lifelong strategy.
“Another habit is automating my savings,” Donadio said. “No matter how much I earned, I made sure a certain percentage of my income was automatically transferred to a savings or investment account. This not only ensured consistent savings but also reduced the temptation to spend.”
Treating Self-Improvement as a Thrifty Investment
Frugality doesn’t only have to be about spending less. It can also be about spending a little to get a lot — especially when it comes to the kind of self-improvement that pays dividends for life.
“Lastly, I always invested in learning,” Donadio said. “Although this might not sound frugal, I believe that investing in knowledge pays the best interest. It has helped me make informed decisions about my business and investments, which in turn has contributed significantly to building my net worth.”
For Donadio, there’s not much to it: Don’t change course when the original one led you to success.
“These habits, coupled with a consistent commitment to my business, have been instrumental in my financial journey,” Donadio said. “Building a net worth isn’t solely about major financial decisions. It’s the smaller, day-to-day habits that compound over time to create significant wealth.”
A Young Hustler Chooses Building a Business Over Spending
Cameron Heinz built his company, Mobility Nest, into a seven-figure business — but, unlike Donadio, who got rich after decades in his industry, Heinz was approaching financial success while still in high school.
He launched what would become Mobility Nest — an e-commerce site that sells wheelchairs, lifts, homeware beds and other devices to people who struggle with getting around — when he was just 17 years old. He created the platform himself using a website builder; but, because he was a minor, he did it under his mother’s name. Upon turning 18, he transferred ownership to himself, and when Shopify Payments caught wind of the ruse, the payment facilitator banned him, forcing him to find a new processing company.
Today, Mobility Nest pulls in $30,000 a month and Heinz is a young millionaire — and the penny-pinching ways that enabled him to pursue online business ventures since childhood still guide him.
Organizing Your Finances With a Budget
Heinz is a meticulous planner in his business ventures — and that thorough nature carries over into his financial life.
“I’ve always adhered to a strict budget, and I will continue to do so,” he said. “Budgeting helps me allocate resources efficiently, prioritize investments and avoid unnecessary expenses. It played a crucial role in managing cash flow during the early stages of my business.”
Being a Disciplined Saver
Like Donadio, Heinz is a systematic saver who never takes a pay period off from socking away money for the future.
“Saving a portion of my income will remain a non-negotiable habit,” Heinz said. “This practice provided a safety net during uncertain times and allowed me to reinvest in my business when opportunities arose.”
Avoiding Lifestyle Inflation
Also like Donadio, Heinz would rather bank his cash than drive around in it or wear it.
“I’m committed to avoiding excessive lifestyle inflation,” Heinz said. “It’s easy to succumb to luxury spending as income grows, but maintaining a modest lifestyle ensures financial stability and sustainable growth.”
Spending Wisely
Smart spending is a habit worth practicing for anyone who wants to save more and build wealth — a truth that Heinz knows well.
“I will always scrutinize expenses and look for cost-effective solutions,” Heinz said. “Whether in personal life or business, finding ways to cut unnecessary costs contributes to profitability.”
Practicing Smart Investing
The whole point of saving money is to grow it through investments that can put your cash to work. Like so many self-made millionaires, Heinz sticks with stable, tried-and-true performers with more upside than risk.
“Prudent investing in assets that appreciate over time — such as stocks, real estate or business expansion — has been instrumental in growing my wealth,” Heinz said. “I’ll continue to make informed investment decisions.”
Heinz’s adult life is just getting started and he already has built a small fortune — and he intends to keep it and grow it, not squander it.
“These frugal habits helped me accumulate wealth,” he said. “They provided financial security, enabled reinvestment in my business, and fostered a mindset of financial responsibility. Regardless of my financial success, these habits will remain integral to my financial strategy and continued growth.”
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This article originally appeared on GOBankingRates.com: Self-Made Millionaires: 8 Frugal Habits We’ll Never Give Up
