4 Personal Finance Tips from the Extremely Wealthy

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Managing your personal finances is hardly enjoyable, but doing it properly can make the difference between a lifetime of debt and a lifetime of comfortable living. If you compare two people with similar skillsets, the same education level, and similar expenses, it is perfectly possible for one to be drowning in debt and one to have a hefty retirement account. It all comes down to how you manage those personal finances.

So if you’re looking for a few lessons in personal finance, why not look to the most financially successful people in the world? Here are 4 personal finance tips from people who have clearly figured out the secrets to financial success.

Cultivate Your Rare, Valuable Skills

Mankind has long had an obsession with scarcity. The rarer an item is, the more value it tends to have. The price of gold, for example, rises and falls with its availability. So, if you want to increase your income, focus on cultivating your rarest, most valuable skills. As multi-millionaire Tai Lopez explains, professional athletes make millions of dollars a year because their skills are extremely difficult to come by. And, while what a teacher does adds more value to society, the ability to teach is much more common and, therefore, pays a whole lot less.

Money is almost always attached to rarity, so decide what your most valuable, rarest skills are and decide if you can market that in some way. It may be a creative skill, a technical skill, or an intellectual skill, but everybody has something exceptional to offer. Find what your rare skill is, and cultivate it to turn it into your main source of income.

Focus on Finances Early

When did you first start thinking about saving and investing? Probably not until after college. Up until that point, most people seem to be focused on just making ends meet. But the true financial successes are the people who start early.

As an example, consider Carlos “Slim” Helú, who was ranked as the richest person in the world for several years. Slim began buying shares in a Mexican bank at the fresh young age of 12, and earned 200 pesos a week working for his father’s business when he was a teenager.

Of course, if you’re already in your 40s and struggling financially, this might feel like somewhat useless advice. But in such a case, you can alter the advice slightly to be “start now.” Even if you have little income to spare, focus on saving and investing as much income as you can. Just putting a few dollars away every month can add up quickly.

Simplify Your Life

We life in a consumer society, and are constantly bombarded with advertisements enticing us to buy the newest, shiniest version of one thing or another. But the best thing you can do for yourself financially is to ignore those screaming advertising voices and focus on the basics. For example, billionaire Warren Buffet has lived in the same house since 1957—a house he bought for just $31,500

John Caudwell, David Cheriton, and Chuck Feeney (all three of them billionaires as well), all walk, ride bikes, or take public transportation every day. While they could afford to buy the flashiest, most expensive cars on the market, and Warren Buffet could certainly get himself a mansion in downtown New York, they’ve simplified their lives in ways that allow them to put their money in smart investments instead of physical things.

Focus on the Long Run

You don’t have to game the system or make fast money in the stock market to be financially successful. Warren Buffet, for example, spent the early part of his career investing in insurance companies. It wasn’t a “hot” investment at the time, and he didn’t make a million dollars overnight. But it they were smart investments in companies with consistent annual cash flow.

This applies to your personal finances as well, whether investing it or not. Focus on financial choices that are going to yield long-term benefits instead of short-term gratification.

These tips may not make you a millionaire, but they can guide you on the path to a more secure financial future.