Tweet

7 Secrets of the Wealthy

Written by: Bob O'Brien

Article Overview: Veteran Financial Planner shares his experiences financial planning for both the wealthy and the less wealthy. These are the keys to wealth building!

7 Secrets of the Wealthy

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

Related Articles
  How Many Ways Are There To Make Money?
  Secrets Of Wealthy Work From Home Entrepreneurs
  You Could Be One Of The "Wealthy"
  Wealth Creation
  Master Wealth in Todays Economy

Article Tags: assets, bottom line, downside, financial education, financial planner, financial security, freedom, liabilities, middle class, money, net worth, new ways, personal responsibility, point of view, rate of return, retirement, score card, television
Referred by: http://www.mywealth.com



Related Forum Posts
7 words or less for Structogram - Some "7 words or less" (more or less) for Structogram for your comments: Training to get your message across(6) Secrets to get your message across (6) Training so people will listen to you (7) Helping you get your message across (6) Training to learn to get your message across (8) Communications training for yourself and your team (7)
Re: Marketing to Wealthy Consumers - Russell, I also wanted to add that you should market your luxury rugs as something "money can't buy". For example, you could offer your latest collection designed by those artists you mentioned earlier to preferred/repeat customers only (sort of like how you can't buy an Amex Black Card or Ferrari, they're "invitation only" with a set number of them issued). I think the key is to promote exclusivity and the fact your rugs are limited edition (e.g. only 3000 produced) rather than going with the "custom" route. The reason being that while "custom" is always fun, it's expensive to produce and there's no community behind it. Wealthy people enjoy knowing that they're a part of an elite community or that they're "special". It's like their social glue to connect with other wealthy folks. I feel that two rich people with a BMW 7 series will have more to say to one another than if one had a BMW and the other had an unknown expensive custom car. Even at tennis lessons last summer, I just so happened to make friends with a guy who drove a white Acura RSX (I have a red one). And when you brand your luxury rugs, you may want to consider using numbers or letters like luxury cars to appeal to status seekers.
Re: What would you do with your last $1000? - I would put into my business certainly. If money sleeps then you will lose it. Nearly the eaxct situation happened with me. I had my last 750$ in my pocket to make money online. If I spent it in a wrong way, I would have to lose my chance to own business on the Internet. But I used it wisely and bought D. Gerl's Insider Secrets to Internet Marketing. Then put the rest of the money into Google Adwords and could save my business. But now..... I would continue my monthly membership on SubmitYourArticles Article Submission Service (37$), buy Revolution Wordpress Theme, maintain monthly membership on J. Humpereys ASC membership program and the rest of money put into Google Adwords and Yahoo Ads. Orxan
Re: My Favourite 7 Boldest Entrepreneur Moves of All Time - Hi Evan, I have a new suggestion for "Boldest Entrepreneur Moves of All Time" and a suggestion for your Learning from the Masters series: 1. Boldest Entrepreneur Moves of All Time = Christopher Columbus: "... he saw the possibility of treasure and commerce where others saw only danger. He committed so wholeheartedly to that vision that not even dozens of rejections and ongoing penury could dissuade him from pursuing a journey to Asia via the West. He built on his technical strengths as a seaman to plan a viable journey and eventually marshal an expedition." - Christopher Hoenig, 6 Essential Secrets for Thinking on a New Level I bought Hoenig's book about 10 years ago but couldn't make head or tail of it then... reading it now and finding it inspirational... 2. Nomination for Learning from the Masters video: Dee Hock, founder of VISA. (Source = Hoenig.)
Book: Why Good Girls Don't Get Ahead But Gutsy Girls Do - Book: Why Good Girls Don't Get Ahead But Gutsy Girls Do: Nine Secrets every career woman must know Kate White 1995 Foy years Kate White lived as a good girl - a rule follower, a people pleaser, a busy beaver - until she was passed over for the job of editor-in-chief of a magazine she had been running for months. She finally realized that being gutsy, not good, was the only way to succeed. A gutsy girl : 1. Breaks the rules 2. Has one clear goal for the future 3. Does only what's essential 4. Doesn't worry whether people like her 5. Walks and talks like a winner 6. Asks for what she wants 7. Faces trouble head on 8. Trusts her instincts 9. Takes smart risks This book has NO table of contents, but above are the chapter headings. A good book, although I really wish they'd stop talking about "girls" and start talking about women.


Share this article with your friends. Fund someone's dream.

Leave a comment below or share on the left and you'll help support entrepreneurs in Africa through our partnership with Kiva. Over $50,000 raised and counting - Please keep sharing! Learn more.

Tweet

Newsletter

Get advice & tips from famous business
owners, new articles by entrepreneur
experts, my latest website updates, &
special sneak peaks at what's to come!

Name:
Email:

Popular Articles

Why SEO is important for your online success

Using Social Media Marketing

Suggestions

Email us your ideas on how to make our
website more valuable! Thank you Sharon
from Toronto Salsa Lessons / Classes for
your suggestions to make the newsletter
look like the website and profile younger
entrepreneurs like Jennifer Lopez.