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What Do Rich People Spend their Money On?

When it comes to money management, you may be wondering; how do the rich people spend their money? You will note that most billionaires don’t spend their money on luxuries. For instance, the world’s second richest person Elon Musk doesn’t own a home. How does he spend his money? Rich people spend their money in the same places as the rest of us, but they are a lot more frugal. In this article, we are going to focus on how the rich spend their money.

How Rich People Spend their Money?

You could be wondering, how do billionaires spend their money? This is how the rich people spend their money.   

1. Investing

The most common way the rich spend their money is on investments. They always invest their money on assets and projects that generate returns. They are also big risk takers and they are not afraid to stash their money in risky projects. That’s what separates the rich from the average person. They invest in projects that seem less likely to pay off.

For instance, Elon Musk sold off PayPal for $180 million to start new companies. He put the money into three different companies, $100 into SpaceX, $70 million into Tesla, and $10 million into Solar City. After that, he had to borrow money for survival from friends. This is way a big risk for most of us. Luckily, it paid off for him.

2. Paying Professionals like their Advisors and Accountants

The other way rich people spend their money is by hiring experts. You will notice that the super-rich go for the best professionals in the market. The rich hire the best experts, be it doctors, accountants, lawyers, or managers.

For this, they get the best services in return. The rich then spend their money on paying such professionals. Through working with professionals, they are able to get the best services and advice that allows them to make bold decisions.

3. Contributing to Charity

How do millionaires spend their money? Millionaires spend their money by donating it to the vulnerable in the society. They spend a significant portion of their money on charitable donations and community projects. Some of America’s richest people that are the biggest charity contributors include Warren Buffett having given over $42.8 billion, Bill Gates; $29.8 billion and MacKenzie Scott; $55.2 billion.

Related: How rich people give away free stuff.

Many rich people like Bill Gates and MacKenzie Scott look for ways to give back to society and help the less privileged. They also support community projects and school projects. Apart from cash donations, they also start non-profit making organizations and help communities.

4. Networking with Successful People

The rich spend their money in buying and hiring private jets for traveling. It is obvious that rich people mostly interact with their counterparts. They frequently travel across the world to meet other successful people to share ideas and collaborate.

They invest in cordial relationships, giving them a chance to learn and support each other. The rich look for like-minded people and a visionary team. Unlike the average person who views success as a privilege, the rich believe being wealthy is a right. 

5. Luxury Real Estate

Most of the rich people spend their money in real estate and luxury homes. Some of the richest billionaires like Bill Gates, Larry Ellison, Warren Buffett, and Mark Zuckerberg own luxury homes. Real estate is one of the most profitable investments. Over time, the value of luxury homes appreciate and billionaires are able to sell them at very high prices.

However, it is funny that the world’s second richest man Elon Musk does not own a home and sleeps at friends' spare bedrooms. But for many other rich people, they prefer to spend their money on luxury homes, and real estate portfolios. 

6. Membership Fees for Elite Clubs and Organizations

You will notice that the rich spend their money on membership fees for elite clubs and social clubs. Many of them are members of golf clubs, ski clubs, and social clubs.

Through such social clubs, the rich are able to interact, share ideas and network with other wealthy people. It is true that money cannot buy happiness, but it can certainly give you access to the good things in life.

Also read: Money mistakes to avoid in your 20s. 

7. Investing in their Children

What do millionaires spend their money on? Most rich people spend their money by investing it in their children. They send them to the best schools and give them the best life. They teach them how to invest, manage money and make money.

They send their kids to the best schools where they can get gainful skills. For instance, Elon Musk opened a school for his kids and SpaceX's employees; Ad Astra which means “To the Stars.” He was dissatisfied with the regular school that didn’t offer gainful skills to his kids.

Summary of How Rich People Spend their Money

The rich people are very economical in spending their money. They do not spend their money on impulse buying. Instead, they look for ways to grow their money. For instance, while the average person perceives starting a business as a risky venture, the rich perceive it as a successful venture. As such, the rich end up spending money on ventures that earn them more money. 

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