“Don’t buy anything you can rent”

“Don’t buy anything you can rent”

Many people know how earn Money, but that’s only a small part of the equation. You also have to know how to multiply it over time, and when you should – and shouldn’t – spend on something.

It took me 20 years of trial and error before I achieved a net worth of millions of dollars. I had to exercise tremendous discipline and invest as much money as possible in income producing assets.

Now, I get income from the 18 companies I’ve started, and from 12,000 housing units I own that generate passive income.

Here are the four unpopular rules and spending rules that I followed, at a young age, that helped me get rich:

1. Do not make large purchases unless their price is provided twice.

Once some of my friends start making more money, they reward themselves with fancy cars, boats, and trips to Paris.

But I made a rule for myself: in order to buy an expensive watch or even a house, I had to save twice its price. This kept me from overspending on something, while also giving me time to think about whether I really needed it.

Instead of spending money on big one-off purchases that had a limited impact on my overall quality of life, I focused on putting my profits into improving my business.

2. Don’t buy anything you can rent.

As I worked my way to becoming a millionaire, the only expensive items I would buy were those that could increase my cash flow, like commercial properties that I could rent out.

I never bought anything I could rent – like a main condo or a car – so I could avoid the high monthly payments and maintenance costs associated with owning.

In 2012, for example, I sold my house and lived in rental homes for nearly 10 years. This freed me up more money to invest in real estate. Once I saved a huge amount, I bought a house with cash.

To this day, I still rent my cars. However, I never extend the lease for more than 24 months, even if it makes the bill affordable. A lot can change in a couple of years, and I try to avoid getting stuck in a car that doesn’t meet my needs.

3. Don’t spend to impress others.

My goal has always been to create a legacy of the wealth of generations for my family. That was more important to me than buying things I didn’t need.

So even when I could buy something, I didn’t just buy it to impress my colleagues. Instead, I invested at a higher rate and built my fortune in the private sector.

Even though I have money now to buy expensive things, I still consider myself fairly frugal. I don’t care to be flashy, I try to live without my means.

4. Spend your passive income only.

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