Last week ACE held a joint workshop with the AMA and the University Sales Club. Jeff Lehman, author of The Frugal Millionaires, came and spoke about money management. He wanted to know how millionaires used (or didn’t use) their money. He did a lot of research and interviewing before he wrote the book, which he shared with us.

Quick Background

Mr. Lehman asked millionaires (with a net worth of $1 million or more not including their home) 50 questions to understand their spending habits and what they do differently from an average person that sets them apart and makes them successful. He summarized what he found and shared the important and relevant pieces of information.

How millionaires think differently

• Delayed gratification: If there is something they want, they wait a few months before buying it. If they still want it after waiting, then they know it’s worth buying. The price may have also dropped, like the initial price drop on the first iPhone.
• Live below your means: Just because you can make monthly payments on a Ferrari doesn’t mean you should. Buying less than you are able to allows you to save money and build your wealth.
• Buy appreciating assets: People blow a lot of money on goods that lose value quickly. The example Mr. Lehman mentioned multiple times was purchasing new cars, which lose 40% of their value once you drive them off the lot.

How does this apply to me?

As a college student, I don’t have millions of dollars to mismanage. However, learning good money management principles early will pave the way for financial success. As Mr. Lehman pointed out, many of the millionaires he interviewed were pretty normal people with somewhat but not overly successful jobs who had just been wise with their investments and spending.