Learning to keep your spending in check is extremely important. We had one client who spent $40,000 a month. But she was worth over $30 million so she was OK with spending that amount. Others were not so fortunate.

We had one client who sold a business and the deal paid him $700,000 a year for the next 7 years. His final installment was a few years before I started at the firm. By the time I left, he was broke because he couldn’t control his spending.

It reminded me of professional athletes who go broke. They think the gravy train will never end, so they never really plan to save and invest their money. When the ride ends, they keep spending as in years past. Before they know it, they are in debt up to their eyeballs.

Those who followed our philosophy of buy and hold investing did well. In fact, most earned back the money lost from the market crash in 2008 by mid-2011. We did have one client though that didn’t do so well.

He was a trader and would make all kinds of trades based on his hunches or fears. His portfolio was always down while his wife’s, who followed our advice, was usually doing well. He questioned why her returns are always so much better than his. He didn’t like the answer that it was because his hunches were usually wrong.

Non-Financial Lessons Learned

While the above lessons were mainly financial, I did learn a lot of non-financial things too. The biggest was that to be successful, I was probably going to fail. I need to learn to get over failure and get back up on the horse as they say.

A good many of our clients told stories of their failures but added in how it eventually led to their success.

I also learned that experiences are more important than things. Our older clients would talk at length about family trips and vacations they would take with their kids and grandkids every year. They never talked about the new flat screen TV or the cool memory foam bed they just bought.

It was all about experiences that made them the happiest. In fact, one time an older client of ours left his eyeglasses in our conference room. Since he lived close by, I offered to drop them off when I went out to lunch.

I was shocked when I walked into his house. He lived like I did when I was in college. His house wasn’t huge and it didn’t have every fancy gadget or contraption that most people have. He lived a simple life. I guess when you don’t spend on things to appear to have wealth it is easy to amass a $20 million dollar fortune.

Summing It All Up

To recap, here is a bullet list of the things I learned:

  • You can be successful and wealthy doing anything. You just have to work hard and put in the time.
  • You may become rich overnight through an inheritance or by winning the lottery, but if you have crappy money habits, you will be right back in the same financial spot as before or even worse.
  • The typical signs of wealth, cars, boats, houses, etc., are the signs of the uber wealthy. The true rich cannot be picked from a line up. They live frugally, save and invest their money.
  • A long-term investing strategy is one that will make you a successful investor. If you try to time or beat the market, you are going to fall on your face.
  • Accept failure. If you are going to be successful at anything in life, you are going to fail a lot. The sooner you can accept it and learn from it, the better off you will be.
  • When spending money, spend it on experiences, not things. The memories are priceless

Final Thoughts

Overall, I loved the job. Just about all of our clients were down to earth and great to spend time with. I learned a lot just by being around them and learning how they became wealthy. The biggest lesson though was that being wealthy wasn’t all about the huge houses and fancy cars, etc.

It was about retiring by the time you are 50 and traveling, spending time with your children and grandchildren and enjoying life. That is what most of the small business owners did.

But with that said, I would be lying if I didn’t drool and get a little (OK a lot) excited when one of the doctors would pull up in his brand new Porsche 911. After all, everyone deserves one toy, right?

The following article was republished with permission from Money Smart Guides.