6 Mistakes the Rich Never Make

6 Mistakes the Rich Never Make

1: You Refuse to Face Facts

If you’re not a numbers person, it can be tempting to mentally cut yourself off from your finances, whether it's neglecting to stay on top of your investments or blatantly ignoring your bank statements. But that’s a huge no-no—and those with sky-high bank accounts certainly don’t amass big bucks by being blind to their balance sheets.

“If you don’t have the facts about your financial situation, money will stream through your hands like water,” Tardy says. The consequence? You could land in debt, make poor investments—or end up flat-broke when you retire.

2: You Overspend

When you think about the type of lifestyles the rich can afford, you probably picture luxuries like a ski chateau in Chamonix or a closet full of Manolos. But wealthy people are more down-to-earth than you might imagine.

“Millionaires aren’t out there buying Lamborghinis,” Tardy says. “They make purchasing decisions based on their current financial status and their goals. They’re rich because they’re good at keeping money—not spending it.”

3: You Neglect to Adjust Your Finances Following a Big Life Event

When you get married or a parent passes away, your bank account is probably one of the last things on your mind. But if you postpone adding your spouse to your will, canceling your joint account after a divorce or signing on to your new company’s 401(k), your bottom line will take a hit.

“Successful people understand that every transition you go through has a financial implication—and they make sure to build a plan for those turning points,” says Pete Bush, CFP®, of Horizon Wealth Management in Baton Rouge, La.

4: You Waste Cash on Fees

It’s one thing to burn through $100 on a fantastic meal at your favorite restaurant. Hey, at least you enjoyed yourself! But it’s entirely another to trash 100 big ones on overdraft fees or missed payments.

“The difference between wealthy people and everyone else is that the rich watch where their money is going, and they protect their wealth by making sure none of it slips through their fingers,” says David Bach, author of “Smart Women Finish Rich." “Rich people will rarely be caught paying their bills late, bouncing checks or carrying a high-interest credit card because they hate to waste money.”

5: You Focus on Saving More—but Not Earning More

If you’ve decided that you need to scale back on your spending, and your first inclination is to sacrifice your daily Starbucks fix or unplug every electronic item in your house when you’re not using them—stop right there.

Millionaires aren't in the business of wasting money, but they also recognize the greater importance of earning additional income as a way to attain financial goals faster. “[Wealthy people] understand that while there is a limit on how much you can save, there is no limit to how much you can make,” Tardy says.

In other words, even though slashing your expenses by $50 or even $100 a month will boost your bottom line a little bit—raking in thousands more from a salary bump will have a much greater effect.