12 Things Financially Successful People Do Differently

What would financial success look like for you?

Certainly, everyone has a different definition. For me, it’s not about having more money than I know what to do with.

It’s about making wise decisions with the money that I have.

It’s not all about pinching pennies, although, there is a place for managing expenses and keeping them to a minimum.

It definitely involves entrepreneurship and generating multiple streams of income.

Not so that I can be rich, but that I can give more, provide for my loved ones, and create more freedom and time to do the things that interest me the most.

If that definition of financial success relates to you, consider these 12 things you can bet financially successful people are doing differently than the average Joe.

1. Have an eye for entrepreneurship.

Financially successful people don’t just think about how to manage expenses are cut them back when times are tough. They think about ways to increase their income. They are constantly on the look out for new ideas that will allow them to leverage their skills and abilities to generate additional income.

For them, there are two parts of a budget. Expenses and income.

People often just focus on spending and expenses when there is a world of opportunity out there to increase the income side to not only meet expenses, but support their long-term goals and plans. You don’t have to think big in this area or come up with the next product on “Shark Tank.”

Instead, think about ways you could generate an extra $500 a month. How about a $1,000? You get the idea.

2. Assemble a team of experts.

I constantly hear about how successful people surround themselves with the right people to support them in what they are doing. Personal finance is no different. Who said it had to all be personal, anyway?

Successful people have identified where they are experts and where they aren’t. Most people will find that at some point in their lifetime they need a good family or business lawyer, accountant, financial counselor (short-term decisions, budgeting, debt management, etc.) and financial advisor (long-term decisions, retirement planning, etc.) to help them along the way.

Seek out these people now so you don’t have to hunt for them later. Aside from the lawyer, the other three subject matter experts are people you’ll want to meet with several times a year.

3. Minimize taxes.

Financially successful people look to minimize their tax burden in order for them to get the most out of their money and investments.

How do they do this? As I mentioned above, they have a certified public accountant on their team so they don’t miss applicable deductions when it’s time to file their taxes.

They also invest pre-tax dollars in tools such as a company 401(k) up to the employer match. They also invest after tax dollars in a Roth IRA to avoid paying taxes on their earnings in the future.

It’s always better to pay taxes on today’s dollar versus tomorrow’s!

At the end of the day, taxes are every American’s responsibility, but there is nothing wrong with taking advantage of tax benefits to the degree the law allows.

4. Never stop educating themselves.

Walk into the house of the financially successful and you’ll perhaps find the latest issue of Money magazine, Entrepreneur and some financial staples, such as Dave Ramsey’s “Total Money Makeover,” anchoring down their book library.

That’s not to say that they spend all their time reading, rather they stay informed on the latest tips and ideas and seek to be inspired by others in the financial and business industries.

Even the most financially successful know that there is plenty to be learned from others and life’s journey always demands new strategies and ideas.

5. Build wealth.

Building wealth is a top priority in their plans and it’s done with steady plodding over time, not overnight. The financially successful seek to maximize retirement investments via their 401(k)’s (up to employer matching) and Roth IRA’s, but go further in creating assets that appreciate in value.

Such assets come in the form of businesses or real estate that can eventually be sold or can generate monthly income to support them later in life, or even replace the need of working for another employer in a full-time capacity. Time is extremely valuable and the investment in assets, which may require work upfront, creates free time once it grows in value and produces passive income.

6. Don’t deprive themselves.

While making wise business and financial decisions is core to their nature, they don’t deprive themselves of having fun. Doing so would only create more of a tendency to spend money later in life. That’s why they make the most of the journey, budgeting for family vacations, date nights and time with their family.

While these seem like expenses on the surface, they can also be viewed as investments targeted toward their most valued relationships. They also know that it’s important to celebrate accomplishments along the way so they can be recharged to accomplish their next business or financial goals.

7. Set goals.

And speaking of goals, the financially successful have them. Who needs goals? You do if you have dreams and aspirations you want to accomplish in life. Interested in replacing your day job with a small business or generate passive income while you sleep?

Doing so requires a plan and setting SMART goals (specific, measurable, achievable, realistic and time-bound) to keep you moving. Otherwise, you’ll squander time and just tell yourself you’ll get to it tomorrow.

Setting SMART goals works for their personal finance goals too. Such financial goals help with saving more money and managing spending month to month.

8. Reinvent themselves.

The financially successful know that things change with time and you can’t always stick to yesterday’s goals and plans. New opportunities arise all the time whether it be in business or in the tools used to manage their finances.

The last few years have seen a big movement in Cloud technology and how people can now manage their finances online with applications such as Mint, Ready for Zero, Betterment, Credit Karma (for credit scores) and many more.

There is information at our fingertips and the ability to access it anywhere, anytime. From a business standpoint, social media is here today, but what will it look like tomorrow and what business opportunities will the financially successful capitalize on in the future?

9. Help others.

Financial success isn’t always about looking in the mirror. It’s about knowing what’s within and the most successful know that acquiring money can’t be the top priority in life. Putting money first tears apart relationships and the race to acquire more can never be won.

The financially successful keep money in it’s proper place by giving it away. Yes, they make giving their top priority. They give to their house of worship or favorite charity, as well as look to help others.

10. Avoid personal debt.

Debt is the number one thing that robs people from time and freedom. Why? It requires time to work to generate income and make the payments. Sometimes that requires overtime work!

Brearin Land, financial adviser and CEO of Irvine Wealth Management adds, “Being weighed down by debt puts a damper on a families ability to meet their retirement goals down the road. Don’t pass the buck to yourself. Staying out of debt allows you to buy life’s most important asset when you need it most — time.”

Without debt, you have a lot more flexibility and most importantly, get back the time to invest in wealth building activities such as starting a business or in creating products and services to sell. The financially successful know that personal debt is a hindrance and they do everything they can to avoid it.

11. You Down with OPM.

While personal debt might be hindrance, the right kind of debt could give your business the edge it needs. Jude Wilson, financial strategist and founder of Wilson Group Financial, says:

“Many financially successful clients I work with view the use of debt very strategically. Their focus is, “how can I use “other people’s money” to enhance my business opportunities. This is in stark contrast to the way many see debt, as a way to satisfy more immediate desires, like that next grand vacation or a means to purchasing that dream mac-mansion.”

Financially successful people see debt as a tool to purchase or own a greater percentage of an investment — that if successful, could result in earning far more than the interest on the loan. Of course there are those of us who use debt irresponsibly and others who view debt as something to be avoided at all costs, but the financially savvy relish the chance to leverage debt to maximize returns.

12. They have persistence.

Finally, you will never be successful unless you have persistence. This characteristic is never been more important when striving to attain financial goals, overcome obstacles and certainly, in growing a business into the black.

The financial successful are persistent and don’t give up when the little voice inside says to do so, or when naysayers try to hold them back.

Persistence pays off debt, increases retirement savings one percent at a time and continues to create and market products when you don’t think anyone is listening.

There you have it. 12 things financially successful people do differently. They sound simple on the surface, but how many people in your life do you consider to be financially successful?

Not everyone has the discipline and persistence required. Think about the people in your life you’d like to model after and consider how they live out these 12 things.

Invite them to coffee or dinner and talk about their success, these 11 characteristics and perhaps learn more things you can add to the list.

This post originally appeared on DailyFinance.com.

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Five Things You Could Afford If You Didn’t Buy a New Car

America’s love affair with cars has reached critical mass. According to Experian’s quarterly “State of the Automotive Finance Market,” the average car payment for a new vehicle is an astounding $482 per month – stretched out for 67 months, or more than five years.

That amount of money is hard to fathom on a national level, but it’s even crazier when you consider something else: The average American household is saving just 5% of their disposable income for retirement, which isn’t enough for most people to ever retire – let alone retire comfortably.

Almost worse than that is the fact that almost half of American families – including ones with ginormous car payments – couldn’t even come up with $400 to cover an emergency or financial crisis. Yes, you read that right. A recent poll by the Federal Reserve showed that 47% of families don’t have the cash reserves to cover emergency car repairs, unexpected medical bills, or any other minor life crisis that pops up.

But at least we’ll all look and feel awesome driving our new cars… right? 

What You’re Giving Up for That New Ride

Well, on second thought, maybe not. Although we recently argued that 84-month car loans might be the worst idea ever, I’m going to up the ante and say that all car payments suck. 

There are exceptions, of course. If you have the cash to pay for a car but opt for a 0% APR loan so you can invest instead, that’s super cool. Or let’s say you have other high-interest debts – borrowing money at a lower interest rate so you can completely annihilate your other loans is yet another smart use of your funds.

However, most car shopping isn’t quite so strategic. Most of the time, we head to the dealership, fall in love with something shiny, and sign our lives away without thinking twice.

We’ve been programmed to think that “everyone has a car payment,” and that it’s an inevitable fact of life. Even worse, we’re convinced that a new car is the ultimate sign of affluence – that upgrading is our “right” as we earn promotions at work, secure bigger and better paychecks, and take our position as the head of our households.

• Related: Keeping Lifestyle Inflation at Bay

Sadly, all of that is bull$#!t, and complete propaganda perpetuated by the car dealerships and automakers who profit from our hard-earned dollars.

That’s why they pay people like Matthew McConaughey big bucks to pretend he won a huge poker game with his friends then drive away smoothly in a Lincoln MKX. When you really think about it, it’s so, so, so, so sad that we actually fall for this crap.

In an age when cars are better built and more reliable than ever, there’s no need to trade up every five years and live in a state of perpetual new-car debt.

The average age of cars on the road in the U.S. was a record-high 11.5 years in 2015. That’s just the average –meaning for every brand-new car sold, there’s another one out there that’s 20 years old — and an owner who might have been living sans car payments for 15 years by now.

Five Things You Could Afford If You Didn’t Have a Car Payment

Imagine what the world would be like if everyone (or at least most of us) saved that new-car cash and drove an old beater-mobile. Imagine if we said, “To heck with the Joneses,” and drove that smart Honda Civic to the ground instead of buying a new one every few years.

What could we buy then? And what could we save? What dreams could we achieve with that money?

It could be anything, but let’s start here:

A College Education for Your Child

While no one knows exactly how much a college education could cost five years from now, it’s fairly safe to say it will cost a pretty penny.

College Board estimates show that the average cost of tuition at a public, four-year school ranges anywhere from $4,891 in Wyoming all the way to $15,160 in New Hampshire – and that doesn’t include room, board, and living expenses. Even tuition at public, two-year schools ranges from around $2,000 per year all the way up to $6,500, depending on the state.

Obviously, a lot of what you’ll pay depends on where you live, but it also depends on what type of school your child attends, and for how long. But let’s just say your goal is to pay for most of your child’s college education – maybe not all, but as much as you can.

If you funded an investment account for your child at the moment of birth with just $500 and added $482 per month for a full 18 years, your child would leave high school with $163,921.02 for college – and that’s if your investments earned just a conservative 5% per year!

While we’re on the subject, that $482 per month could also bankroll your own online masters degree.

An Income-Producing Rental Property

While landlord horror stories may have dampened your dream of owning rental property, plenty of people still hope to get in the game one day – and it is a time-tested way to grow your wealth if you can handle the headaches. However, the biggest barrier is usually coming up with a down payment. To buy most rental properties, you need a down payment of at least 20%, plus excellent credit.

Imagine you started socking away that $482 right now, and kept doing so for four years. You might get seriously sick of your beat-up minivan by then, but you would ultimately wind up with $23,136 stashed away.

Depending on where you live, that might be enough for a down payment on a small rental to get you started. Over time, you could let your renters “pay off your property” while building equity in an investment that will hopefully increase in value over time. This plan is totally feasible, but you’ll want to prepare yourself for the realities of rental property before you get started.

• Related: What I Wish I Had Known Before Buying Rental Property

An Annual Vacation to Europe (or Somewhere Else Really Cool)

Let’s say you have all your financial ducks in a row – you’re saving like crazy for your children’s college education, socking away 20% of your pay in your work-sponsored retirement accounts, and sitting on an emergency fund big enough to handle nearly anything that pops up.

That’s all fine and dandy, but are you taking the time to smell the roses? If you were able to sacrifice that monthly car payment, you would have plenty of cash to live – and travel – nearly any way you wanted.

These days, you can easily score a sale fare to Europe for $800 or less round-trip, depending on where you live. By saving that $482 per month – or $5,784 per year – you could afford to fly your family of four to Ireland, France, Italy, Portugal, or Spain every year, for example, plus pay for a standard bed-and-breakfast and most of your activities.

Or choose a cheap, all-inclusive resort in the Caribbean, and you could take your family twice per year easily. With average round-trip airfare to most places in the Caribbean at around $400, a family of four could fly for around $1,600 and still have money to select a nice property and have a boatload of fun.

• Related: Why I’ll Never Feel Bad About My Vacation Spending

New car? I’ll take a gondola, thanks. Every year you put off buying a new car is worth a trip to Venice. Photo: Piervincenzo Madeo

A 15-Year Mortgage

Just like we’re programmed to think a five- or six-year car loan is normal, we’re taught early on how it makes sense to borrow as much money as we can to buy our dream home. And of course that involves a 30-year mortgage, which is absolutely nuts if you think about it. Thirty years is a long, long time to be mailing in a monthly payment on something – anything — yet we do it all the time, on purpose.

But, what if you could get out of debt 15 years sooner? That’s exactly what you would accomplish if you took out a 15-year mortgage instead of the standard 30-year ball and chain.

Even better, a new car might be all you need to give up to make this happen, even if you already have a 30-year mortgage. Let’s say you borrowed $200,000 for your home at the going interest rate of around 4% — your monthly payment on a traditional 30-year mortgage, including principal and interest, would be about $955.

If you simply put that $482 car payment toward your mortgage principal each month, you could pay off your mortgage a full 14 and a half years earlier, and save about $75,000 in interest over the life of the loan.

Better yet, for another $42 a month ($1,479 total), you could just choose a 15-year mortgage from the outset, cutting the life of your loan in half. You’d save close to $80,000 in interest over the life of the loan.

Raise your hand if you want to be mortgage-free a full 15 years sooner. I think most of us would say, “Yes please!”

A Rocking Emergency Fund

Remember how almost half of American families don’t have an extra $400 laying around for emergencies? If you fall into that camp, forgoing the fancy car and car payment should be an absolute priority.

When you go without an emergency fund, you’re just one step away from losing it all. One job loss, a health scare that keeps you from working, or an emergency situation might be all it takes for you to lose your home, your car, and anything else you might own.

Once your car is paid off, don’t trade it in! Instead, stash away the equivalent of your monthly payment and start building your emergency fund. Based on the average American’s car payment of $482, after year one with no emergencies, you’ll have $5,784 saved up. And after your third year, you’ll have $17,352! And if you were sticking those funds in a high-interest savings account the entire time, you’d have even more stashed away.

And all you have to do is drive your old car a few years longer. Sounds look a good trade-off to me.

The Bottom Line

While the idea of driving a brand new car might get you excited, the reality of those monthly payments can be downright ugly. With all that money on the line, it’s important to consider what you’re giving up when you insist on buying new all the time. Chances are, you’re sacrificing a whole lot more than you think.

Before you head to the dealership, stop and think about what you really want. A shiny new ride – or more freedom, financial stability, and choices in life. As always, the decision is yours to make.

How do you feel about car payments? Is there something you can afford only because you don’t buy a new car every few years?

Related Articles:

• Best Used Cars for Simply Getting Around
• Comparing Costs Between New and Used Cars
• Best Cheap Car Insurance Options in 2016

The post Five Things You Could Afford If You Didn’t Buy a New Car appeared first on The Simple Dollar.

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Thanks to Her Love of Fashion, This Woman Made $1 Million Working From Home

Like many of us, Linda Lightman had too many clothes in her closet.

Unlike many of us, she figured out how to turn those excess garments into a thriving business.

Last year, she earned $25 million running Linda’s Stuff, which she says is the “largest, most successful consignment seller of designer fashion on eBay in the world.”

Fascinated by her success, I chatted with Lightman about how she built her business — and how to find and resell designer items yourself.

Want to learn her secrets? Keep reading…

That Time She Started a Multi-Million Dollar Business in Her House

It all started with video games.

More than 15 years ago, Lightman’s 7- and 10-year-old sons wanted new ones. Since Lightman was only working part-time in her husband’s business, buying them just wasn’t in the family’s budget.

When they tried trading them in at the store, her sons were disappointed by the low prices they were offered.

So one suggested selling them on eBay.

“The games [began] selling to people all over the country,” says Lightman. “All over the world. They were getting bid up to close to what we paid.”

And that inspired an idea.

“When the kids’ supply of video games that they were willing to part with was complete, I decided to start selling my own clothing, shoes and accessories that I no longer wanted, used or wore.”

Like the video games, the clothes sold well. Once people heard about her success, they started asking Lightman to sell items for them.

“Before you knew it, a business was born,” she says.

That was in 2000, and the stuff soon took over her house.

“All the work was being done in our kitchen, and in our living room, and in my kids’ bedrooms,” she says. “My kids would come home from school, and they would have homework to do, but there were people working in their bedrooms, and there were people working in the dining room. There was no room that was ‘spared eBay,’ as we called it.”

In 2003 (after she’d earned a million dollars from her home!), Lightman and her husband decided to take a leap of faith; he left his job and they made Linda’s Stuff into their full-time gig.

“It was terrifying,” she says. “Imagine: We had a mortgage, children, cars, you name it, like anybody else.”

Scary, but worth it.

“I have to tell you, we never looked back,” she says. “It’s been a great ride, and a great journey. It’s hard to believe.”

If you’re interested in following her entrepreneurial path, she recommends starting slowly — but definitely starting.

“The time is now,” she says. “If not, now, then when? I always say ‘If the thought occurs to you, then you should do it.’”

From her home to a 93,000-square-foot office space, from 1,000 to 140,000 listings, from solopreneurship to 110 employees and from a few bucks to over $25 million in sales last year, it’s certainly worked for her.

How to Spot Designer Items — and Resell Them for a Big Profit

Not everyone will be able to start a multi-million dollar business, but nearly everyone can find things to sell online.

I’ve found designer items at thrift stores — but have been hesitant to buy them, since I didn’t know if they’d sell.

I figured many of you might have the same concerns, so I asked Lightman for her advice on finding items that will bring a high resale value.

The next time you’re out thrifting, follow these tips:

1. Make Sure It Has a Discernible Label

The number-one tip Lightman shared?

Make sure your item has a clearly discernible label.

“It doesn’t have to be a designer like Louis Vuitton, or Prada or Gucci, but, some sort of designer name,” she explains.

“The designer name is what drives the search, and the sale. People aren’t looking for something that has no designer.”

2. Know Which Designers Have a High Resale Value

If you’re anything like me, you barely know the difference between Banana Republic and BCBG.

To help, Lightman has a large list of popular designers on her site.

I’d recommend bookmarking or taking a screenshot of her list. Then, when you’re at a thrift store or garage sale, you can quickly see if something is a designer brand.

Just because a designer is on the list doesn’t mean it’s a good buy — and vice versa. But it’s an excellent place to start.

“Our list of designers is pretty inclusive,” she says. “They all sell well. We also have a list of designers we don’t take.”

The list of no-nos includes Gap, Old Navy, Jones New York, Forever 21, Talbots, Ann Taylor, Linda Allard, Ellen Tracy and Dana Buchman, which don’t have a high resale value on eBay.

3. Focus on the Photos

One of the keys to Lightman’s success? The photos.

Though she’s not a professional photographer, she’s always spent time making sure her photos are high quality.

She also used natural light and creativity to her advantage.

“I didn’t have any fancy lights, and I didn’t have mannequins,” she explains. “I just brought them outside to my outdoor furniture, and… if it were Halloween, I would put pumpkins around it… When I was selling some of my earrings, I put them in an apple, or I hung them from a twig.”

4. Be Well-Researched and Efficient

Just like photos, don’t slap a haphazard description and price on your item and expect it to sell well.

Make sure you do your research and are thorough with your business. (Yes, I said business — because treating it like one is the only way you’ll find success!)

“You want to describe the item well,” says Lightman. “You want to do research into what the item is selling for. You want to make sure you answer questions from potential buyers. You want to make sure you ship it quickly, and in the cheapest way possible.”

5. Go for Accessories

Accessories like wallets, purses, sunglasses and jewelry sell the fastest and the best, Lightman says.

“They’re that one-size-fits-all item, right?,” she explains. “You don’t have to try it on.”

6. Don’t Worry About Things Being “Out of Style”

As a non-fashionista, I’ve always wondered about purchasing things that are in good condition — but might be “out of style.”

If something’s from a high-end designer, but was released several years ago, should I still buy it?

Lightman says yes.

“What might be out of style for somebody might not be out of style for somebody else,” she explains. “Style is subjective. I don’t believe in ‘out of style.’”

I don’t know about you, but Lightman’s tips gave me the confidence I need to pick up designer items while I’m out thrifting.

Here’s to hoping I make a few million off my purchases!

Your Turn: Have you ever sold a designer item for a profit?

Susan Shain, senior writer for The Penny Hoarder, is always seeking adventure on a budget. Visit her blog at susanshain.com, or say hi on Twitter @susan_shain.

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