7 Ways The Richest of the Rich Make (And Spend) Their Money

Fourteen crucial finance facts you can glean about the wealthy

Published in

Live Your Life On Purpose

12 min readJan 23, 2021

Have you ever thought about how many zeroes are at the ending of a million dollars? $1,000,000 — that’s six zeroes. That’s 100,000 $10 bills stacked on top of each other, which is pretty crazy when you think about it. According to ABC News, there are about 46.8 million millionaires in the world, in addition to the 2,153 billionaires reported by Forbes Magazine.

The question is, how does an average Joe/Josephine become one?

Let’s face it, we all want to know how to get 100,000 $10 bills stacked on top of each other — particularly when we can’t seem to keep just a few lodged in our wallet or savings account without spending it.

“It’s simple arithmetic: Your income can grow only to the extent that you do.” — T. Harv Eker

The Law of Attraction, money gurus, and the inspirational dude you’re following on Instagram are all telling you that making money is easy. And while that might be the case, making money, making lots of money, and keeping money turn out to be quite a difficult pursuit. I don’t want you to listen to me tell you how to do it, though — let’s look at what the experts do, and learn from the practicing of what they preach. Let’s look at how they make their money first.

1 || Start a company

I used to think this method of making money was unattainable and impossible to achieve great success with. It wasn’t until I began listening to NPR’s How I Built This podcast that it dawned on me how every great company has humble beginnings.

“A big business starts small.” (Richard Branson)

Some of my favorite episodes of the show include Video Artist: Casey Neistat, The Life Is Good Company: Bert and John Jacobs, and LÄRABAR: Lara Merriken. These are all companies and individuals that had no idea they were going to have crazy successful companies. According to CNBC, The Life Is Good Company is a “$100 million ad-free global success story”.

Find a passion, go at it, and turn it into a multi-million dollar business. It’s simple, really.

LÄRABAR sold for $55 million in 2009 after being started at a kitchen table by a woman who simply wanted a better bar. Casey Neistat has an estimated net worth of $16 million. Want to make a ton of money? Find a passion, go at it, and turn it into a multi-million dollar business. It’s simple, really.

2 || Design an app

It occurred to me just today, researching for this piece, that I didn’t know how founded/created the latest social media application TikTok. Turns out, it was Zhang Yiming, a man we don’t hear too much about. He’s a 35-year-old software engineer who’s made billions from this app. He’s apart of the richest startup in the world.

“If you’ve got an idea, start today. There’s no better time than now to get going. That doesn’t mean quit your job and jump into your idea 100% from day one, but there’s always small progress that can be made to start the movement.” (Kevin Systrom, founder of Instagram)

While the app came from apps before and in no way was a revolutionary idea, it was the next step taken by an innovative creator and business owner. He saw an opportunity and a market, and capitalized on it — just look at the teenage girls doing the TikTok dances in the park. They’re making this man millions.

“I think a simple rule of business is, if you do the things that are easier first, then you can actually make a lot of progress.” (Mark Zuckerberg)

You can also follow in the footsteps of other apps, improving on their capabilities, or find a need that you can fill with an application with your own design. Listening to NPR’s How I Built This episode on apps is always fascinating because it’s never as complicated as it seems. It’s hard, sure, but never too complicated to be replicated by everyday people.

3 || Become an eccentric life coach

This category is where I’d put Tony Robbins, no doubt. He became famous by approaching life in a different way and getting paid to show other people to do the same. We’re talking Brian Tracy, Louise Hay, Seth Godin, and Stephen Covey. These are the people who just sat and thought long enough before discovering the secret to some part of making life better.

“There is no finish line. There are only mile markers.”
(Michael Ventura)

Then, they made bank sharing it with the world in creative, clever, and inspiring ways. While this is certainly not an overnight get rich quick scheme, it’s something you could dedicate your life to — and make a lot of money doing it. (To learn more about what made Tony successful, I’d go and check out this amazing Business Insider article about where he started.)

4 || Have a popular and brand-leading blog

A Huffington Post level blog is probably a bit of a stretch goal — but aiming to have an amazingly popular blog is definitely doable. I’m thinking about Seth Godin, Leo Babauta, and Tim Ferriss. They all have made a significant amount of money by writing, selling products, and marketing their ideas.

The goal here is to have an audience — to grow an audience that is truly interested in what you’re saying. What’s incredible about becoming a great writer/popular influencer, is that you don’t have to force anyone to follow you. You don’t have to convince anyone, because you’re already great and people are naturally interested in the work that you’re doing.

“You can buy attention (advertising). You can beg for attention from the media (PR). You can bug people one at a time to get attention (sales). Or you can earn attention by creating something interesting and valuable and then publishing it online for free.” — David Meerman Scott

This is essentially the idea behind the book 1,000 True Fans by Kevin Kelly. Think about it. If you have 5,000 followers on Instagram, and 1,000 of them give you $5 a month on Patreon, then you have $5,000 a month in income already. Multiply that by 12, and you’ve got a $60,000 annual income. Then, think about if you wrote a book — a book that sold 1,000 copies. If you were making $3 from each book, then you’ve made $3,000 more.

“I always point people to the article ‘1,000 True Fans’ by Kevin Kelly. If you choose your thousand ideal customers or readers properly and find the single author blog that targets that audience, you never have to do any more marketing. You’re done. That is a lesson that very few product developers and marketers have learned, and it’s unfortunate.” — Tim Ferriss

Then, maybe you get a few more followers on Instagram and then you launch an online course, coaching program, or public speaking business. That could be $10,000 more a year — and that’s with a small group of Instagram followers and just a blog/product.

Entrepreneurs take this concept and multiply it by 10, if not more. They get 10,000s of individuals to commit a significant portion of their money every year to what they’re creating. In the past two years, I’ve contributed hundreds of dollars to different authors, creators, coaches, and more. Why? Because they made me want to and it was worth the money I was spending.

5 || Write an amazing book (or books!)

This is basically the same point as above, just a little more specific. Real creators make a lot of money writing. According to insanegrowth.com, Tony Robbins has sold more than 50 million copies of his books. (Think about how much income that’s created for him, both in royalties, additional coaching and speaking clients, and large book advances.)

If you want to learn more about writing an amazing book, I’d recommend reading my article “10 Rules For Writing Your Bestselling and Brand=leading Book” and Tim Ferriss’ “How To Make A Perennial Bestseller”. Writing a best-selling book takes work, and it isn’t something you’re likely to do on the first try, but it’s something to work towards and can pay off in the end if you’ve created a committed and intrigued audience base.

6 || Smart investing

Warren Buffett is the poster child for investing and making a whole lot of money doing it. I’m not going to try and summarize his advice here, but reading up on what he’s done, as well as the investing actions of people like Dave Ramsey and Ramit Sethi is definitely something I’d recommend. Nothing makes better passive income than an investment account with a lot of money in it, high returns, and outside management.

“Price is what you pay. Value is what you get. Someone’s sitting in the shade today because someone planted a tree a long time ago.” (Warren Buffett)

Investing in a way that you’re setting aside significant amounts of money for later is a genius idea that I’m surprised more people don’t take advantage of. Gather up whatever money you have, and do a butt-ton of research finding out where to put it. Be smart, and you’ll be happy you invested now. The rich know this and invest their money in a way most of us don’t even think to do. Learn from them — they certainly seem to know what they’re doing.

7 || Create a life-changing product

This is usually a step above an app or tied closely to it. But before I get into details and examples, I want to put kind of a crazy idea into your head. You don’t need as much marketing to launch a product as you think you do. Many of us believe that in order to have a product launch and be successful, we have to have YouTube ads, billboards, sponsors, and more.

While those help, the two biggest things that can impact your ability to sell and make significant amounts of money from a product is your audience and the quality of your product. The reason I say marketing isn’t always the right fish to fry is because

“Good business leaders create a vision, articulate the vision, passionately own the vision, and relentlessly drive it to completion.” (Jack Welch)

Read more here: 10 Ways To Guarantee Better Sleep

But the real question is: How do they SPEND their hard-earned money?

Although I will say, this question is more pointed when you specifically ask where they put their money. In fact, if you look at the numbers, most millionaires and billionaires only spend a small fraction of their number, living rather frugal lives, giving quite a bit of their money away in addition to lofty investments.

1 || Modest homes they enjoy

Something that fascinates me is that the vast majority of rich people, happy rich people, is that they don’t buy things for the sake of buying things. They buy homes, and devices/appliances/decorations/cars for those homes based on their tastes, needs, and what makes them truly happy.

I think about Tony Robbins and the ice baths he has at all of his homes. I think about Tim Ferriss, who lives in Austin, Texas. Warren Buffett still lives in his first home — despite having the capacity to buy something much grander. Tim Cook lives in a $1 million home, which is modest for the CEO of one of the greatest companies in the world.

2 || More investments

Good investors don’t stop at their first payout. Good investors know that it’s better to let the money sit and grow in strategic places than get rich quick and become poor even quicker. Warren Buffett, again, is a great example of this. He’s always recommended long-term investments, those that are going to be good in the end, even if they have to go through some valleys.

“After all, you only find out who is swimming naked when the tide goes out.” (Warren Buffett)

Ramit Sethi, author of I Will Teach You To Be Rich, offers some similar advice — be sure and play the long game in certain investment areas and categories. You’ll need money to spend later when you go into what will be your final retirement. (After all of your Tim Ferriss styled mini-vacations, of course.)

When you’re on a rewarding track, you can only keep going farther. Keep finding better investments, keep refining your strategy, and keep putting money in places where it can yield high returns for you.

3 || Health products

It’s actually quite shocking how much rich people spend on staying healthy. I’ve read books and articles and watched countless YouTubers from various millionaires who speak frequently about the resources that they expend trying to stay as healthy and energized as possible.

Stefan James, for example, uses fancy water filters to keep at the top of his game. People like Jocko Willink spent money upfront to have nice home gyms.

There are also individuals who hire personal chefs to prepare great, healthy meals for them. Wealthy people know how vital their health is — and so they spend a significant amount of money on keeping it up.

4 || Travel and adventure

Maybe this is more of the “fun” category, but I believe that mindful and intentional travel can contribute not only to someone’s well-being but their view of the world. Travel and adventure give people hope, a sense of beauty, creativity, new relationships, and more.

“Live with no excuses and travel with no regrets”
— Oscar Wilde

The richest in the world have money to spend on travel that can expand both their minds and their hearts, taking them to new heights — sometimes literally, depending on where you like to travel to.

If you’re looking to spend your money like the rich, consider getting outside and going somewhere new. Even if you can’t go to Mount Everest, the Baja peninsula, or the Alaskan mountains right now, you can still find someone new to travel to and adventure in.

5 || Philanthropy

The greatest rich people in our world are those who spend a massive amount of their wealth helping other people. This can be by growing communities, donating to causes they believe in, starting non-profits, and more.

“You don’t build a business, you build people, then people build the business.” (Zig Ziglar)

No matter how they do it, rich, wealthy, happy people tend to give a lot of their income back to their communities and things that are important to them. According to his Wikipedia page, Tim Ferriss has contributed to the Center for Psychedelic and Consciousness Research at Johns Hopkins University School of Medicine, as well as the Center for Psychedelic Research at Imperial College London.

Bill Gates and his wife Melinda created the Gates Foundation, which is doing important work all over the world. The wealthy know how important giving back is — we should too. Even if you don’t have significant amounts of money to give away right now, you can give away your energy, your thoughts, your prayers, and your voice. Giving back is vital to living a rich life.

6 || Their family

The adorable story of a recent millionaire buying a house for their aging mother is actually a common thread amongst rich people. Rich people give to those that they love, making sure that they can carry on the rich life both in terms of finances and lifestyle.

Rich people buy homes for their parents, pay for their kids’ educations and travels, and make sure that the people closest to them are well taken care of. This should come as a given, but it’s nice to mention. When you’re on your way to becoming a millionaire, don’t forget to set aside some money for your parent’s retirement. After all, they took care of you for eighteen+ years.

7 || Learning and personal growth

I was looking at Bob Goff’s website earlier today and was admittedly surprised by one of the questions on his coaching questionnaire. I wasn’t filling it out, simply taking a quick peek, but this one point still caught my attention.

“Income seldom exceeds personal development.” ―Jim Rohn

He (and his team) ask you what your budget is for personal growth and coaching is this year. It hadn’t occurred to me until I saw that I realized that all of the richest people in our world, give or take, commit time to grow themselves.

Think not just the people that make a lot of money, but the ones that people admire and want to learn from. These are the likes of Bob Goff, Gary V, Tim Ferriss, Tony Robbins, Oprah, and more.

These are individuals that commit money every year to being coached, to reading, to growing, to retreats, and any and all means of growing themselves.

They set aside money, time, and energy to make sure they’re constantly growing, becoming better, and being the literal best that they can be. They also invest in personal training for fitness goals — making sure that their body is in its peak state.

“Every moment of one’s existence, one is growing into more or retreating into less.” ―Norman Mailer

It’s like they always say, you have to invest in yourself. Make sure to take some of your money and pay yourself. Keep growing. Keep expanding your heart and mind. That’s the only way your wealth can sustainably expand, and that your life can grow along with it.

In the end, the richest people in the world spend their money the same way we do — they just do it better. While we don’t have to follow their exact model or do things right in line with what they do, paying attention to how they make and how they spend their money can give us some key insights into how they think and how they make their money.

These individuals have thought long and hard about what to do with their wealth, and are able to make and spend it sustainably.