Why Do Some People Always Seem To Have Extra Money?


Being hard up financially is no fun. You can’t do what you want, and it often requires significant effort to get out of a debt hole. 

That’s why many people dedicate themselves to financial freedom. These individuals want to be in a position where, no matter what happens, they can still live well. 

Of course, the number of people who fall into this category is small. Only a handful of individuals attain this level of financial freedom. But when they do, you certainly know about it. These people always seem to have extra money hanging around, no matter what life throws at them. 

The question we answer in this post is what are their secrets. We look at how they live and the practical things they do to escape financial problems and generate an endless stream of income. 

They Believe They Can Be Wealthy

The most important factor that differentiates people who always seem to have extra money is the fact that they seem to believe in the idea of themselves being wealthy. These individuals don’t have any psychological blocks getting in the way and undermining their attempts to do well financially. 

On one level, this practice is spiritual. These people think they’re destined for high income or a massive pile of assets. On the other hand, they’re open to possibilities. They don’t have to be wildly successful, but it can help. 

This belief might sound unimportant. But when it comes to day-to-day decisions, it really matters. Individuals with a wealthy-oriented mindset focus on money as their goal, helping them make better choices in every situation. If something goes against their objectives, they don’t do it. 

It can also change the way people think. Instead of seeing wealth as something earned after working hard, they start to view it as a reward for being smart. This changes the nature of their efforts completely. No longer do these individuals feel satisfied doing the same things over and over every day. They always believe what they do should be different. 

They Make Smart Financial Choices

At the same time as developing this self-belief, they also develop smart financial choices. These help them navigate the world of asset-building, enabling them to generate new income streams. 

Ultimately, they understand that capital is what creates wealth, not income. Even people with the highest salaries often have wealth that pales in comparison to company owners, investors, and property magnates. The former rely on work, while the latter get their assets to generate income for them. 

Making smart financial choices is far more challenging than many people imagine. It requires a real understanding of how various financial markets work and where to invest for the highest return. 

Many people take aggressive actions and later discover they made a mistake, leaving them out of pocket. That’s not the best strategy and can often lead to ruin over the long term. Smart decision-makers take smaller calculated risks and give themselves a longer time horizon to achieve their objectives. 

They Avoid Impulse Purchases

Part of making smart financial choices is avoiding making impulse purchases. Rather than blowing money on random holidays and fast cars, they stick it into investment accounts and attempt to grow and nurture it over time. 

With careful budgeting, many investors grow their capital by 10% per year. Compounded, this rate can double their capital pile in less than ten years, and triple it by 15% (even without making any additional contributions). 

Once asset-derived income reaches a high level, managing it starts to become a full-time job. The need for salaried work starts to reduce. That’s why many people who always seem to have extra money don’t have formal jobs. Instead of working for a low wage, they’re cooking up ways to leverage their existing assets and turn them into income streams. Many top entrepreneurs save 70% of their income for the first 5 to 10 years before they enjoy the proceeds. 

They Nurture Multiple Income Streams

Another habit you’ll discover in people who always seem to have extra money is that they constantly nurture new income streams. These wealthy individuals know that the more they diversify their investments and focus on generating cash from different sources, the more secure they’ll become. 

This diversification is the main reason the rich always seem to do well during recessions. Even if one sector is going down, they have investments in another that’s going up. 

For example, they might own a golf course that’s seeing fewer memberships during an economic downturn. But at the same time, they also own dollar stores and thrift shops, attracting more business than during boom times.

In many ways, it doesn’t matter where these income streams come from. As long as they exist, they provide security. Many of the wealthiest people get income from: 

  • Renting out properties to tenants and holidaymakers
  • Investing in crypto
  • Investing in bonds, stocks, and ETFs
  • Starting a dropshipping business
  • Making money via an online personal brand
  • Starting businesses that later become cash cows
  • Renting out offices, parking spaces, and portaloos

As you can see, there are so many ways to nurture multiple income streams. It’s often just a question of finding out what’s out there and taking the plunge. 

They Don’t Bother With Side Hustle

People who always seem to have extra money also don’t bother with side hustles. While we might be in a “work until you drop” culture, simply working more hours isn’t always the smart move. 

The problem with side hustles on top of your regular job is that you don’t have time to research where and how to invest the additional funds. There’s too much time on the job, and not enough being strategic about where to use finances. 

Sometimes, side hustles are essential (usually for getting that first $50,000 to $100,000) but their value beyond that starts to diminish rapidly. Once you have capital, you can start making it work for itself and finding high-value applications. 

People with extra money aren’t working all the time. Instead, they’re finding some way to make their money work for them and using the proceeds to fund their lifestyle. 

They Release Money If It Benefits Them

Many people are worried about releasing money from their homes or annuities because they fear it will evaporate. However, wealthy individuals do this sort of thing all the time. If they think they can improve their financial situation by remortgaging or taking out a lump sum, they will do so. 

You can read more about the best ways to use windfall finances online, but the main point is this: if there’s a better way to use the money, they’ll use it. There’s no point in sitting in an investment account or trust earning 5% a year if plowing it into something else could earn 10% or 20% a year. 

They Don’t Compare

Another feature of people who always seem to have extra cash is their refusal to compare their lifestyles with anyone else’s. Instead of looking at what others have and feeling jealous, they just focus on their future. Sure, right now they might be living frugally, but that’s going to allow them to have more later on. 

When people stop comparing themselves to others it makes them much less willing to spend unnecessarily. Compulsive purchases disappear from their lives (along with feelings of envy or resentment). Instead, they compare themselves to themselves the year before, ensuring they are making slow but steady financial progress). 

They Ignore Luxury

You also find people who always seem to have money and ignore luxury. While they might appreciate a fast car or expensive vacation, they seldom purchase these items.

These individuals know that the most valuable aspect of their wealth is the freedom and independence it gives them. For many, it is worth driving an inexpensive car if it means they have more time to spend on their hobbies or with their families. 

They Believe In Earning More

Finally, people who have extra cash tend to be those who believe in earning more. These individuals aren’t afraid to go for promotions or ask for more pay if they think they deserve it (especially if they are at the start of their wealth journey). Often, a higher salary is all that’s needed to get them off the ground and to a place where they can begin investing their excess cash in things. 

Wrapping Up

In summary, we can say that the people who always seem to have extra money are those who live a life of discipline. These individuals aren’t afraid to go without the things they want in the short term if it means accumulating them in the long term. 

It doesn’t necessarily mean they live a life of privation (though they can). It just means they are making consistent positive choices about their finances.

The problem with wealth-building is that it takes a long time. Therefore, people with extra cash view it as a lifestyle choice. Yes, they will suffer slightly now, but the rewards will more than pay for themselves in the future.