 A couple of months before he died, Steve Jobs ordered Venus, a super yacht to be built for him. It would cost a whopping 100 million euros. 100 million euros is a lot of money. Steve had a few clothing as a CEO. Too often, the financially unintelligent use this kind of spending as an unconscious excuse to spend the money they don't have. The wealthy use luxuries. Doesn't it make sense for me to use luxuries if I want to appear luxurious? Well, the problem is you're not rich. And those who are wealthy today would not have become rich if they spent money the way you did years ago. A few years ago, Jay-Z spent more than $100,000 in a single night, and the internet broke for it. The poor and the middle class see this and think to themselves, there's only one life. Let me enjoy my labor. The problem with that thinking is twofold. First, Jay-Z spent that money on his own company. Just imagine me spending $100,000 in a nightclub I owe. The second problem with the middle class who want to copy that sort of spending is, this guy made tens of millions of dollars every year. So the money he spends in a night is equivalent to you spending $50 on something you like. Ellen DeGeneres recently bought a watch for $750,000. This was likely going to become an example for some people who don't have any money. But think about this. This woman makes more than $80 million every year. Now get the picture very clearly. Everyone likes and uses luxuries. The difference between the rich and the poor, however, is that the rich, unlike the poor, know when to utilize luxuries and what money to set aside in buying luxuries. The poor and the middle class, on the other hand, buy their luxuries from their income. The rich buy theirs from their assets. Your income is like a cup of water, while the asset is like a stream of water. When you drink the water in a container, it's gone forever. But when you drink a cup of water from the stream, the stream remains full. Now imagine two young people who have the same income. Let's assume that one of them is going to be productive, while the other will be poor. The following are the things the poor guy will likely spend his money on, which the guy who will be rich will avoid. 1. Parties and social events When I was around 15, I started questioning how people do weddings in my country. It didn't make any sense to me that these poor folk save for the entire year, or borrow a lot of money, only to have a pleasant five hours of their lives. Yes, when you have an opinion at 15, fairly likely it's immature. But I was right. The older I get, the more I see how people waste the money they don't have to impress people through parties. Again, the poor and the middle class have some role models. For example, when the richest woman in my country hosted her child's wedding, she probably went through at least a million dollars. But think twice about this. She is the richest woman in my country. She is a billionaire. And she has several friends who are billionaires and millionaires. What if she hadn't spent at all on that wedding? What if she got back more money than she spent as a result of gifts from her friends? What if she makes in one single day the entire money she spent on that wedding? Most poor people don't think deep enough to know that the rich don't waste money, even when you see them spending it. 2. Lottery Tickets Most people in the world believe in luck. While I also believe in being fortunate, I personally don't believe it exists, and I probably need to figure out how to look for it. Lottery tickets are targeted at the poor because they are the ones who buy them. The probability of you winning the lottery is 1 in 13.9 million, yet many poor people buy lottery tickets every day. 3. Impulse Buys Check your wardrobe and see the number of clothes and shoes you buy, and don't actually need. Look at your mobile phone and ask how many of its features do you need or even use? One of the big problems with our world today is advertising. Advertisers are psychologists, who know you more than you know yourself. They aim to sell, and for them to do that, they have to make you feel guilty. If, for example, I'm selling a children's product, my goal is to make you think that you're a terrible parent if you don't buy my product for your kids. If I'm selling cars, what I want to do is make you feel bad if you can't buy my car. Even Coca-Cola makes you think that you need their unhealthy sugar to be trendy. If you don't know how advertisers think and their motives, you'll be a victim of impulse buying decisions and waste your money on things you don't need. 4. High-end Brands I know a man who went to buy a beautiful car because he was a contractor, and using a simple car would make him lose many contracts. Essentially, the vehicle for this man is an asset, because it will make him more money than it costs. Unfortunately, when many people in society see this man, they want to be like him by using the kind of cars he uses. He gets his vehicles for free, and you're getting yours with the money you don't have. 5. Taxes Everybody hates taxes, but most people don't know how to avoid them. The rich know how to avoid tax. With a corporation which doesn't have to be a big business, you can save tons of money from taxes. Many of the expenses and luxuries the rich acquire are done with pre-tax money, while everyone else spends after-tax money. Someone is using government money while others are using the money they don't have. How to be smart with money Being smart with money is simple, but it's not easy. Most of the world's population have read or heard about the richest man in Babylon. Most of us understand the simple principle Robert Kiyosaki taught in his book Rich Dad, Poor Dad. By the same token, think and grow rich is a simple book to follow. The problem isn't that we don't know what to do, what to do is too simple for anyone to claim ignorance. The problem is that we allow our emotions to dictate our financial decisions. We look at the shiny objects we can't afford and go for it, even though we don't need them. We think we deserve a good life, and yes, we do. But what about timing? There's a famous saying in my country which goes something like this, I'll enjoy today because I don't know tomorrow. That seems to make sense until you get to tomorrow broke. The wise thing to say is I'll endure today because I don't want to be broke tomorrow. I will pay myself first today because I want to have everything I need tomorrow. I will delay gratification today because I want to have everything I need tomorrow. If this video makes sense to you, don't forget to subscribe.