How Do Rich People Spend Their Money? 5 Strategies

People often wonder what the rich do differently when it comes to their spending habits. So how do rich people spend their money? In terms of how rich people invest and spend their money, it’s a couple of levels higher than how poor people do it. 

That’s a question I’ve pondered on for some time, and I’m going to address it further. In this post, I will explain some strategies that rich people use that the majority of society doesn’t do often.

What Do Wealthy People Do With Their Money?

Wealthy people use their money to buy time– meaning time for personal development or to scale their businesses. Whether that’s to improve themselves or invest money back in their businesses, that’s what makes them different from the average middle-class person.

How the rich utilize their money and time

It’s easy to think about all the luxury items you can buy if you’re rich. Some people think it’s buying fancy cars and houses. However, I beg to differ on those points.

Sure, those things are nice to have. But I think that’s not what rich people always want. It’s something far much deeper than just having nice stuff.

From a different standpoint, I’ll go over some ways the rich spend their money. Now where they spend or invest their money is a topic for a future post, which I’ll review later on.

We’ll look at some things that can help build wealth rather than what rich people buy.

  1. They Spend Less Than They Make
  2. They Practice Reverse Budgeting
  3. They Save For A Rainy Day
  4. They Invest In Education
  5. They Go Into Debt

They spend less than they make

As I mentioned, spending less than what you earn can help control your spending. Spending more than what you make does not make economic sense, yet a lot of people still do it.

Those who are wealthy may own multiple successful businesses. If they’re profitable, they know they cannot be spending more than what they earn. For any business to thrive, spending less will help in the long run.

I believe that one is the easiest way to build long-term wealth. If those who are rich can do it, they will remain wealthy for a very long time.

How do rich people spend their money? Spending less than you make can help with long-term wealth building.

They practice reverse budgeting

It may apply to you personally and in business, but this type of budgeting can be effective. Reverse budgeting basically means you “pay yourself first”, and then use the rest of your money goes for expenses and necessities.

By paying yourself first, you put your money in savings and investments first. After that, any money leftover goes to paying bills or spending on other categories; for example, leisure and recreation can be one of them.

This approach is commonly practiced by wealthy people. When they pay themselves first, they are essentially prioritizing where their money should go.

How do rich people spend their money? Wealthy people often will pay themselves first.
What The Rich Spend Money OnWhat The Poor Spend Money On
-Used (but good) cars
-Good debt (borrowing to start a business- using their assets)
-Mentors (i.e. Mastermind sessions)

-Restaurants/Take out
-TV subscription services (i.e. Netflix, Huli, Disney Plus)
-New cars
-The newest iPhone
-Bad debt (i.e. borrowing for consumption; spending more than what they earn)
Rich vs. Poor Spending Habits

They save for a rainy day

This approach is often endorsed in the personal finance space. It’s why having an emergency fund can help in case the unexpected comes up.

Not a lot of people have sufficient funds to cover unexpected expenses. For example, a trip to the emergency room can be a deal-breaker for a lot of people. In the event of something like that happening, it can set them up for financial difficulties.

According to a telephone survey conducted by Bankrate (January 2022), around 56% of respondents said they’re unable to pay a $1000 emergency bill with savings. The fact that more than half of individuals don’t have sufficient rainy day funds is alarming, to say the least.

But those who are wealthy, they’re likely to have enough money to save for any type of emergency. Whether that’s enough to live off savings for a year or two, that can come in handy in case the unexpected comes up.

How do rich people spend their money? For the most part, wealthy people put money aside for a rainy day.

They invest in education

Whether that’s for their children or themselves, wealthy people will spend money on education. Education is well-worth investing your time and money, and those who are wealthy won’t hesitate in that area. 

The wealthy may invest their money by putting their children into private schools, or even homeschooling depending on the curriculum. Or, they’ll invest in educating themselves.

Reading more books or buying courses may help them learn a new skill (or strengthen their skillset). Also, they may go to a seminar to learn about new topics or network with like-minded individuals. 

How do rich people spend their money? The wealthy invest a lot of money into education.

They go into debt

You may be thinking, “Wait, rich people go into debt?” But they do so in order to increase their return on investment.

When we go over the subject of debt, there are good debt and bad debt. Here’s a breakdown of the two types of debt:

  • Good debt: Borrowing money to start a business (i.e. loans) or borrowing money against your assets. 

The idea is that borrowing now will bring in a better return down the road. If you make more money after initially borrowing, then that’s good debt.

If that works, going into debt was well worth the effort.

  • Bad debt: Borrowing to consume, or borrowing money to pay for your expenses.

A lot of people will borrow for personal consumption, which I think is a bad financial practice. If it’s not going to make any money in return, that’s bad debt.

Borrowing for consumption is not my cup of tea. To consume for personal leisure, I’d rather pay now upfront.

How do rich people spend their money? Going into debt can help if you're running a business.

Final Words

How the rich spend their money is more strategic than just making an instant purchase on an item. According to what we discussed earlier, the rich spend their money differently than the poor.

These are some effective ways to think about spending your money. From a business perspective, you can do well in growing a business and managing your finances.

If the purpose is to make more money (getting a higher return on investment), these tips can help keep your spending in shape. Furthermore, if used correctly, it can contribute to long-term wealth accumulation.

Your Turn: Do you spend your money as the wealthy do?

I would like to get your thoughts on this topic. Do you think rich people spend their money differently than the poor do?

Which of the strategies do you find interesting? Are you practicing any of them to build long-term wealth?

If not, what can you do today to get on the right track? Can it help you succeed over time?

Feel free to share your thoughts by leaving a comment below. I look forward to reading your responses, and I’ll gladly respond promptly.

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Eric is the owner and chief editor of 

He takes great pride in helping people manage their time and grow their businesses. 

Eric is a firm believer in financial and time freedom, as he believes in financial independence and taking ownership of your time. 

“Time is your most important asset. It can be your best friend or worst enemy. How you use your time can shape the future you desire to have.” 

In his leisure time, Eric loves to write and read whenever possible. He enjoys going for long walks outdoors while doing in-home workout videos every week. 

You can also connect with Eric via LinkedIn.

Self Photo 2019: Here's a picture at a building in downtown Chicago.
Rich Dad Poor Dad: Robert Kiyosaki's book on personal finance.
Rich Dad Poor Dad

4 thoughts on “How Do Rich People Spend Their Money? 5 Strategies”

  1. I very much agree with you. The rich have a different mindset about money. 

    The rich do not prioritize liabilities but focus on educating the mind, reducing their cost of living, and investing in ventures that are sure to bring good returns. They are not careless about their investments- they watch every dollar.

    • Hello Ayodeji,

      There’s something unique about how the rich think about money. Unlike the middle class and the poor, the rich think of money as a tool to improve the quality of their life.

      From a poor mindset, money is seen as a quick getaway to buy more “stuff”. But once the money drys up, an individual is back to thinking like a poor person.

      Whether that’s for personal values or for growing a business, thinking about money that way comes in handy. If only more people thought of money in a rich mindset, life may be different for most of them.

      You’re right about the rich not focusing on liabilities; instead, they work on building assets. That’s a key point in achieving financial freedom.

      Thank you very much for your insightful thoughts- they’re greatly appreciated.

  2. It is only the second time I’ve come across the view that one way to have more money is to spend less. My dad told me that when I was young and a bit foolish with my money.

    Your post reminded me of Robert Kiyosaki, and when I got further in your post and saw your recommendation for his book Rich Dad Poor Dad I smiled.

    Everything you mention in your article about good debt and bad debt, investing in yourself and family and such is spot on. It’s a shame there isn’t more of a focus on this in the public schools. 

    Which makes your recommendation on spending money on mentors one of the top tips. Folks don’t have to spend a fortune to do that either.

    There are many different types of organizations with an annual fee and one is able to have access to very successful people who share their strategies and more important, help set a mindset for success by becoming immersed in those ways of thinking.

    It’s tough saving for a rainy day, and the figure you shared about more than half of us unable to access 1000 dollars isn’t surprising. One thing I noticed about many self made successful people is that they often will put in 80 hour or more weeks to build something.

    The sad fact is most of us will never get ahead just working the traditional 40 hour week anymore. Those days for most of us are long past. 

    Studying how rich and successful people structure their habits is a great step towards changing ones life. An informative article and nicely presented-  Thank you.

    • Hi Jason,

      It’s sad to believe that a lot of people don’t know how to use the money they earn. I believe the problem is mindset- most people don’t think like the rich today.

      It’s unfortunate that it’s not emphasized enough in public schools. I know I didn’t learn any of that in school- not until I was in my 20s did I learn these methods.

      You make an excellent point about the most successful people working more than 40 hours a week. The traditional 40-hour workweek doesn’t work well these days- it’s hard to get by following that model.

      You made some excellent points that I think are worthwhile. So I like what you had to say.

      Thank you very much for sharing your thoughts- they’re greatly appreciated.


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