Top 12 things rich people do (and that you should do, too)

How to work hard every day. You save money. You follow all the rules. But it still feels like you never have enough.

Welcome to the club. I have my period. You are not alone.

Since I had one of those "days", I started thinking, and then I started writing, because that's what I like to do the most. And I made a little observation.

There are a few things rich people have in common.

Have you ever heard the phrase "the rich get richer"? I've heard this phrase over and over again, but it wasn't until I started earning a regular salary that I realized what it actually meant.

What does it mean to be rich?

According to Merriam Webster's dictionary, the definition of the word "rich" is:

Having rich possessions and especially material wealth

If that is the definition of rich, then I am definitely not rich. At least according to this definition. Most of us are not. But that doesn't mean we'll never be rich.

My definition of "being rich" is financial freedom. Being debt free, having a low cost of living, and having the ability to do what I want, when I want, without killing myself trying to earn all that money.

Want to read more about how to get a grip on your money? Check out Dave Ramsey's The Total Money Makeover. It really is a game changer. You can read it here.

So, here are some observations I've made throughout my life and things I personally do to hopefully be included in the "rich" category. My definition of rich that is.

Make your money work for you.

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Top 12 Things that Rich People Do (that you should do too

Rich People Do Not Spend Money to Look Rich

Have you ever seen that person that always seems to have the latest iPhone, best car, and designer clothes? Yet, they can barely make their rent. Yup. That is the person I am talking about. The person that lives paycheck to paycheck, however, eats at the best restaurants and has the hottest gear.

Are you that person? If you are that person then you need to stop right now. I understand you want to look good. You want people to see you can afford these things. I understand that. But that doesn't help build wealth. They're making someone else rich.

Some of the richest people I know are very modest and reserved. They don't worry about how to look rich. Don't wear designer brands. You do not drive expensive cars. But what they have is financial freedom. I'd rather have that than a fancy car any day.

Rich people don't drive brand new cars

On TV you see all these billionaires driving fancy new cars, but let's face it. In the real world, most rich people I know buy a new car and keep it until they wreck it. Do you know what it's like to live a life without having to pay off a car?? It is amazing. So why bother investing in something that doesn't pay anything, other than getting those coveted headshots at traffic lights. These head turns won't help you if you want to retire early. So take a cue from some of the richest people out there and resist the urge to upgrade your car every year.

Rich people invest

The word "invest" is a scary one. Especially when you're in your 20s and 30s. But don't let that scare you, I mean scare you. Investing can mean a million different things. It can mean anything from setting up a savings account to working with an investment advisor. The best thing you can do is educate yourself. Even if you feel like you can't afford it, even the smallest investment can make a big difference. This leads me to my next point.

Rich people invest: Quality over quantity

That's not a typo. Rich people make a point of investing in the things they buy. It's not about quantity. It's all about quality. Think about it. Let's say you find a good deal on a vacuum cleaner. It costs $50. Except you have to replace that vacuum cleaner every year for the next 10 years. Well, that $50 vacuum just cost you $500. A rich person would instead invest in a $250 vacuum cleaner that lasts 10 years, saving $250. Same goes for furniture and clothing. When making purchases, think about the cost per use, not the deal you get. That's what makes the difference between frugal and cheap.

Rich people read…a lot

Rich people read and learn all the time. When I started college, the first book I read was Get a Financial Life (you can find it here). This book changed my life. It gave me the guidance I needed to avoid making the same mistakes as my fellow students. Reading and studying are definitely beneficial. Don't be intimidated, go to your local library and pick up a few books on money management. Or take a look at some of your favorite bloggers. You'll be surprised at what you'll learn.

• Hustle Harder, Hustle Smarter by 50 Cent. You can read it here.
• Think and Grow Rich by Napolean Hill. Check it out here.
• You're a Badass at Making Money by Jen Sincero. Read it here.

Rich people live below their means

During the housing crisis, many people couldn't afford their homes, let alone their lifestyle. Many people lost their jobs. Others went from having two incomes to one and still couldn't afford the mortgage.

That taught me an important lesson. Live below your means. Just because you make more money doesn't mean you have to spend more money. Bigger paychecks mean bigger bills. But for those of us living below our means, a bigger paycheck means we're very close to early retirement.

When most of us graduate from college, we can barely make ends meet. Between rent, student loans and living expenses, there's little else left to do. So it's only natural to lose your mind after that first big raise. I agree 100% that you should enjoy your money and your life, but ask yourself. Do you really need it?

Instead of buying a bigger house or a fancier car, take the extra money and invest it or put it toward your retirement. They will thank me later. This is what I promise. But if you really want a bigger house or a fancier car, make sure you can actually afford it.

Be prepared for the unexpected. There are too many people living paycheck to paycheck even though they have a six-figure income. There is no reason why you should be in this position. I know people object to this statement, but as someone who lives and works in New York City, one of the most expensive cities in the world, I can confidently make this statement. Be realistic and make the decision to live below your means.

Rich people have no debt

Good debt. Bad debts. In my eyes, debt is debt. They are an additional bill I receive each month. Paying off debt is the best way to get closer to wealth. And when I say rich, I mean that you have liquid assets. Think about it. Let's say you have a credit card, an autorate and a student loan. Let's say you have paid off all these things. How much extra money would you have in your pocket each month? I am pretty sure it would be a good chunk of money.

Most wealthy people do not have debt. You have liquidity. This gives them the flexibility to spend the money when they need and want it.

I say this personally. The day I paid off my student loans I felt rich. I had no idea what to do with myself. I spent so many years blowing so much money that I learned to live without it. What did I do then? I took the amount I paid for my student loans and put it into my savings and retirement savings. So I still do not see the money in my pocket, but I can be sure that I will soon enjoy this money.

Rich people budget

The word budget seems like a bad word to many people. What do you mean, I have to stick to a budget? Well, guess what. If you sit down and make a budget, it can be very beneficial to you for many reasons. First, it helps you realize how much you may be spending on things you don't need. Second, it gives you the ability to evaluate your finances so that you can take action.

You don't have to miss out on fun to enjoy yourself. Get creative with free & cheap date ideas. Here in NYC, for example, we take advantage of free outdoor movie theaters.

Rich people have a budget and stick to it. So they can afford to live the way they do and still have some left over for retirement and investments. Just because you have a lot of money doesn't mean you can lose your mind buying everything you see. You can live on a budget fabulously.