5 Things the Wealthy Never Waste Money On, According to Experts

It can be difficult to recognize when you’re in the presence of a truly wealthy person. Contrary to stereotypes surrounding the uber-rich, wealthy individuals are much more frugal than frivolous when it comes to their money management. Often, the credo “buy it for life” plays a big role in determining how they spend their money and following that philosophy means putting their money where there’s a return on investment.

Take a look at the following five things the wealthy won’t waste their money on.

James H. Lee, founder at StratFI, told GOBankingRates he spent over a decade working at a multifamily office for high-net-worth individuals (HNWI).

According to Lee, his wealthy clients only took out car loans if they could get 0% financing. Otherwise, they pay in cash which Lee said provided an immediate return on investment.

How many times have you been out shopping and seen offers to sign up for store credit cards or pay using buy now pay later (BNPL) options? As tempting as it may sound, keep walking. Grant Gallagher, AVP and head of well-being at Affinity Federal Credit Union, said the wealthy don’t bother with in-store financing offers. 

“These are often overly complicated financial products with lots of fine print and exceptions that are more hassle than they’re worth,” said Gallagher. “If they want coverage or to borrow to purchase, they already have access to credit with more favorable options than in-store finance.”

Through their experience, both Lee and Gallagher told GOBankingRates that the wealthy don’t waste their money on extended warranties. 

“[The wealthy] have broader insurance policies in place to cover personal property, which is generally at much more favorable rates per dollar compared to an extended warranty on a single item,” said Gallagher.

It’s not uncommon to purchase a flight ticket and receive a prompt asking if you’d like to buy travel insurance for an additional small fee. 

The wealthy, however, never waste their money on travel insurance. Rather, Gallagher said they will use a rewards or premium credit card that includes travel protection in addition to other travel perks.

The next time you’re having a difficult day, think twice about heading on a shopping spree or blowing your money on lottery tickets to turn around your luck. 

Ryan Cullen, co-founder and CEO of Cullen Cioffi Capital Management, previously told GOBankingRates that impulse purchases add up quickly over time and may result in draining your finances. Not only do the wealthy avoid impulse buys, but if your goal is to become rich, making too many impulse purchases makes it harder to achieve that financial milestone.