Editor's note: For today's Master Series essay, we welcome back Mark Ford, the founder of The Palm Beach Letter advisory and one of the most successful entrepreneurs we know.
Mark made a personal fortune in an incredible range of businesses in the service industry, retail, real estate, and publishing. But those who know Mark well recognize him as a true teacher at heart... A best-selling author, Mark loves explaining his wealth-building secrets and helping people reach financial independence and live a full, rich life.
In today's essay, Mark shares invaluable secrets anyone can use to "live rich." These secrets can help you live as rich a life as Bill Gates... even without Bill Gates' bank account.
How to Live as Well as a Billionaire – on the Income You're Earning Now
By Mark Ford
When you think about the rich – the really rich – you may find yourself marveling at their... well, their money.
Take Bill Gates, one of the world's richest men. If you think $10 million is a fortune, consider this: He has 5,000 of them. If he put his money in $1,000 bills, he'd have 50 million of them!
But how much better does he live? Sure, he's got a huge house… and a yacht. He's probably got a jet, too. But who needs that crap? Really!
If you make at least $100,000 a year ($150,000 if you are attached to a family), you can live as well as Bill Gates does, and I'll prove it to you in this essay. If you aren't yet making that much, you'll have to put this aside until you are. If you're following The Palm Beach Letter, it shouldn't take very long.
Now, the purpose of becoming rich – you would think – would be to make your life as enjoyable as possible. The more money you have, the more choices you have.
Take sleeping. What does a billionaire want out of his sleep time? I'd say the same thing you do: blissful, uninterrupted unconsciousness. And what will give you that (besides peace of mind, which you can't buy)?
Answer: a great mattress.
And how much does a great mattress cost? Maybe $5,000. That means you can buy yourself a million-dollar sleep on a "billion-dollar" mattress for no more than $5,000. If you are making $100,000 a year, you can afford it.
So get rid of that lumpy thing you are sleeping on and find yourself the absolute best mattress you have ever sat on. Buy it, and go to sleep content that Bill Gates can have it no better.
Fact is, you can pay almost any price for anything. But after a certain point, you are no longer paying for quality… you are paying for prestige.
Take steak. Ask someone who knows about beef and you will be told that the quality of a steak is entirely a matter of the meat you buy. Order filet mignon at the Outback Steakhouse and, for around $20, you are eating the best steak money can buy. Order the same cut of meat at Le Cirque, and you'll pay $75. What's the difference?
Yes – just prestige.
The same is true when it comes to clothing. Beautiful, comfortable clothes are not cheap, but they don't have to cost a fortune. You can buy a great pair of slacks for $150 or you can spend 10 times that amount. The difference will be the label on the waistband.
Champagne, anyone? Consumer Reports had some wine experts test a variety of Champagnes. Of their five best, four were less than $40. Dom Perignon, listed fifth, will set you back $115. A better Champagne can be had for only $28.
And so it goes on. The point is this: The best material things in life are affordable. They are not cheap – quality never is – but if you buy them selectively and use them with care, you can enjoy a life as materially rich as Bill Gates on an income that wouldn't get him through lunch.
Here's how you can live rich, starting today:
Your Dream House
I have lived in a three-room mud house in Africa and a 5,000-square-foot mansion – and I can tell you this: The quality of a home has little or nothing to do with how much it costs or how big it is.
Think about the houses you most admire. They are probably NOT huge and flashy. One of my current favorites is a modest, three-bedroom house in Cleveland, which has been transformed by the lady who owns it into a lush, luxurious museum of her love of travel, dance, and learning. Every room is a gem. I am completely comfortable and endlessly amused in this rich and interesting house.
Its value? As great as Bill Gates' 40,000-square-foot monstrosity in Seattle. Yet this one has a market value of about $150,000.
Your Car
I have a friend, a wealthy friend, who loves cars… especially sports cars. He drives a Camaro. Why would he? Because he says it is as good as a Corvette, a Porsche, or even a Ferrari. Instead of forking out $150,000-plus... he gets his thrills in a car that costs one-sixth that price.
What about prestige? Well, that's what you have to pay more for. But if you are willing to go the classic route... and buy a car whose design doesn't change every year or so... you can buy yourself prestige at affordable rates.
For example, I drive a mint-condition [Acura] NSX that you couldn't tell from a brand-new one. My car is worth about $30,000. You'd have to pay almost three times that amount for a new one. The same holds true for older Mercedes and BMWs.
In fact, in terms of "living rich," you should never buy a new car. You'll save a bundle by purchasing a late-model vehicle with low mileage. If you shop around, you can find a five- or 10-year-old car that will cost 25% or 30% of the new car price, but will be just as good.
Your Wardrobe
What does it cost to dress like the world's richest people? Much less than you think.
If you can forget about brand names and focus on quality, you will save thousands and look better. As with cars, you'll do better by going for a classic look. Then, you won't have to discard perfectly good items simply because the lapel trend has changed.
The other big secret of dressing rich is this: Less is more.
Ralph Lauren – a guy who has the money and the access to dress as rich as can be – wears the same thing almost every day: classic-cut jeans and a T-shirt.
You can dress beautifully in second-hand clothes, too. What could be more impressive than a vintage suit, properly tailored, impeccably clean?
There are books on this subject. They all say pretty much the same thing. A few really nice items are much better – more enjoyable for you, more impressive to others – than a huge wardrobe of trendy, ordinary stuff.
Want specifics? Get yourself two or three pairs of slacks (or skirts). One or two suits (or dresses). Two or three pairs of shoes. The idea is to have much less, but love everything you have.
Make sure your socks are cashmere ($19.50 at Banana Republic) and your T-shirts and underwear are the finest cotton. Use only one cologne or perfume, but love it. Do the same with hair products and cosmetics.
Buy classic. Insist on quality. Few are better than many. Simple is better than complex. Understated is better than flashy. Do this, and you will have what Bill Gates can afford to have: a very pleasant feeling each time you pull on your shirt or buckle your belt.
Food and Drink
Want a "billion-dollar" meal? Take a good bottle of wine, a freshly baked baguette, some cheese and ham, and go to the nearest park with a loved one. You need only a knife and a corkscrew – what you have in your kitchen is fine – to have a truly memorable time.
Le Cirque? Well, I told you my opinion about that. But if there's an expensive restaurant you are dying to try, go ahead and treat yourself. But not too often. As someone who has eaten countless expensive meals, I know how tiring rich food can be. More important, I can remember few expensive meals that surpassed the simple wine and cheese lunches my wife and I have enjoyed when we were lucky enough to have them.
Music, Books, Movies, Etc.
With today's audio technology, even a $300 boom box sounds great. Spend a grand. Don't even try to tell me you need to spend more than that. The secret is in the music you select. There is music that can make you feel like a billionaire.
The great thing about books: The best ones cost no more than the worst ones. Treat yourself richly – read only that which makes you feel richer afterwards. The same is true for movies, theater, and just about any form of entertainment.
There is only one extravagance you can't buy reasonably: front-row tickets to professional basketball games. I have made the mistake of becoming a Miami Heat fan. If you are smart, you will learn to love college ball.
Your Office
Warren Buffett, one of the world's richest (and smartest) men, has his office in a simple building. His walls are paneled plywood. His desk is a table. He doesn't need the prestige of a cathedral-sized room and an altar-sized desk. He is not God. And he knows it.
But what he does have is a room that is uniquely his, with a comfortable chair and a place for everything he needs. On the surfaces and hanging from the walls are things that inspire him. Warren Buffett's office is his own. It looks like no one else's office and it works for him.
That's what you want in your office: the right amount of space, good lighting, a very good chair, and things that stimulate and inspire you.
Everything else is a distraction.
I'm not saying your office should not be luxurious. I am saying it should be luxurious in a personal way. You probably spend most of your waking life in your office, so put as much thought and care into it as you do your home.
Silverware
Shopping for a Christmas present for my wife, I wandered into an antique shop that specialized in silver. The proprietor, a genteel, 86-year-old lady from Georgia, showed me this and that. And then, when she sensed I was looking for something very special, took me to the back room and showed me an absolutely beautiful set of silverware by Reed & Barton. It was the Francis I design – the finest they ever made. "If you were a millionaire," she said in her seductive southern drawl, "You could not buy a finer set of silverware than this."
It cost me $4,500. Nothing to be sneezed at, but that was for 14 place settings and a lot of serving utensils. Now think of that. You can own the finest silverware that money can buy – antiques at that – for $4,500. Such a set could give you pleasure for the rest of your life and make even your ordinary meals elegant. The Queen herself couldn't do better.
It's All Entirely Within Your Reach
The way you dress, the way you eat and drink... even the home you live in... can be as good as any billionaire's. Spend time shopping. Buy very selectively. Limit your possessions. And take a half-hour a day to really appreciate the good things you have. That's all there is to it. (Oh, yes. And don't scrimp on the mattress.)
Editor's note: If you've ever suspected the markets were rigged against you, you're right. But Mark has found several ways for the "little guy" to retire comfortably rich – even if you're over 50 years old and have less than $250,000 in personal savings to your name. Click here to learn more.