7 Secrets of the Wealthy
7 Secrets of the Wealthy
I can also speak from experience and say that it is not as important as to how much you have right now, but where you are going financially which is really important. Everyone goes backwards financially from time to time and riding out the bad times and minimizing your downside when times are bad is essential.
Here are the 7 Secrets of the Wealthy:
Spending… the rich are wealthy because they save, they would not “even think” about spending more money than they have coming in. They generally under estimate their income and over estimate their expenses in order to error in a favorable way for their bottom line. It is nothing at all like what you see in the movies and on television!
Net Worth… They realize that their net worth is the ultimate score card as to how well they are doing. They are constantly looking to increase their assets, and reduce their liabilities. Borrowing is leverage to them and therefore they use debt and do not let debt use them.
They seek out financial education. They are constantly seeking new ways of looking at things, and are open to a professional’s point of view. In the end they decide what is best for themselves and their families but they always take into account the pro’s opinion before doing so.
Retirement is a concern… They save for retirement and make it a personal responsibility. They do not rely on others to take care of them. They do not necessarily save for retirement in order to become less active, but in order to have financial security and the freedom to do the things they want to.
They Invest… They are constantly seeking to make their money grow at a better rate of return, with safety. They know that wealth is not built overnight and that it comes from saving, and getting rate of return over a long period of time.
They have a good understanding of the tax system. Taxes are a big concern when you are wealthy. 20% of the people in the US pay 80% of the taxes, so it is important that they understand all the rules in order to minimize their tax bills through legal channels.
They realize that money itself can be a false sense of security. Money is not everything to them. They realize that it can be lost and there are limits to its power. I think Forrest Gump said it best when he found out that he was wealthy and Lutienant Dan told him that he no longer had to worry about money: He said “Good one less thing”. Money cannot buy everything, but it may enhance your life. The pursuit of true wealth should make you a better person.
I think the most important question to ask yourself is do you want to be wealthy? Or do you want to look wealthy? There is a distinct difference. People that have achieved true wealth did it by making sacrifices along the way, and they didn’t care about what people thought when they drove an older car, or lived in a smaller house.
I have been guilty of wanting to look wealthy myself, until I realized that it stemmed from insecurity. Reducing my discretionary purchases, saving and learning more and more about investing was how wealth is built.
Sincerely,
Bob O’Brien
7 Secrets of the Wealthy - To learn more about this author, visit Bob O'Brien's Website.
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I have been a financial planner for the very wealthy and the not so wealthy, the rich and the poor, the middle class and every other class. I can tell you first hand that there are major differences in the way the wealthy people care for their money, as opposed to the way the less wealthy people do.
I can also speak from experience and say that it is not as important as to how much you have right now, but where you are going financially which is really important. Everyone goes backwards financially from time to time and riding out the bad times and minimizing your downside when times are bad is essential.
Here are the 7 Secrets of the Wealthy:
Spending… the rich are wealthy because they save, they would not “even think” about spending more money than they have coming in. They generally under estimate their income and over estimate their expenses in order to error in a favorable way for their bottom line. It is nothing at all like what you see in the movies and on television!
Net Worth… They realize that their net worth is the ultimate score card as to how well they are doing. They are constantly looking to increase their assets, and reduce their liabilities. Borrowing is leverage to them and therefore they use debt and do not let debt use them.
They seek out financial education. They are constantly seeking new ways of looking at things, and are open to a professional’s point of view. In the end they decide what is best for themselves and their families but they always take into account the pro’s opinion before doing so.
Retirement is a concern… They save for retirement and make it a personal responsibility. They do not rely on others to take care of them. They do not necessarily save for retirement in order to become less active, but in order to have financial security and the freedom to do the things they want to.
They Invest… They are constantly seeking to make their money grow at a better rate of return, with safety. They know that wealth is not built overnight and that it comes from saving, and getting rate of return over a long period of time.
They have a good understanding of the tax system. Taxes are a big concern when you are wealthy. 20% of the people in the US pay 80% of the taxes, so it is important that they understand all the rules in order to minimize their tax bills through legal channels.
They realize that money itself can be a false sense of security. Money is not everything to them. They realize that it can be lost and there are limits to its power. I think Forrest Gump said it best when he found out that he was wealthy and Lutienant Dan told him that he no longer had to worry about money: He said “Good one less thing”. Money cannot buy everything, but it may enhance your life. The pursuit of true wealth should make you a better person.
I think the most important question to ask yourself is do you want to be wealthy? Or do you want to look wealthy? There is a distinct difference. People that have achieved true wealth did it by making sacrifices along the way, and they didn’t care about what people thought when they drove an older car, or lived in a smaller house.
I have been guilty of wanting to look wealthy myself, until I realized that it stemmed from insecurity. Reducing my discretionary purchases, saving and learning more and more about investing was how wealth is built.
Sincerely,
Bob O’Brien
7 Secrets of the Wealthy - To learn more about this author, visit Bob O'Brien's Website.
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