Most people are after „fast money“ and if/when they manage to achieve it, they decide they’d like to start saving or suddenly become stingy. The rich know that saving is extremely important but more important than saving is the profit. The Average Joe is interested in small profits and not willing to invest their energy and mental power to create money-making ideas.
The rich tend to look at the bigger picture, so most of them have wealth managers or financial life managers – how they’re called in more recent times.
Here are some advices from wealth managers that you can follow if you’re looking to improve your financial standing:
1. Rich people don’t go into debt (if they want to stay rich)
An important part of not getting into debt is keeping track of your expenses. According to many wealth managers, most rich people actually follow a set budget and meticulously track their money flow. Managers are often tasked with creating their rich client’s spending plan so that they can afford the necessities and remove wasteful expenses.
2. They’re not afraid to ask for financial advice
If you don’t want a wealth manager or simply can’t afford one, don’t worry: there’s always Google and personal finance books. Millionaires are aware that with knowledge comes power and the only way to get ahead it to constantly study and surround yourself with people that inspire you.
Successful people will work steadily to be at the top of their fields, continuously expanding their skills so watching documentaries, reading books or looking at a couple YouTube channels about finance can get you a long way.
3. They always have multiple sources of income
They say that the average millionaire has 7 sources of income. According to Steve Seibold’s book How the rich think: “The rich get richer because they know the world is overflowing with wealth disguised as problems that need to be solved. They know any free market economy will gladly make them as rich as they desire in exchange for solutions to problems. The bigger problems you solve, the wealthier society will make you. That’s another reason the rich get richer: they’ve learned how to make money work for them twenty four hours a day.”
So instead of focusing on spending and saving, there is a need to focus on how to earn more money and invest some of it, while still having some money for perks. This will help you diversify your income flow and bring in more money.
4. They invest often but only what in what they understand
While world-class thinkers understand the importance of saving and investing, average standing folks mostly, have a savings account with a low rate of return, and very often, they pay it until they retire. The rich use their earned money to make more money, either by themselves or with help from wealth managers and this is what makes such a huge difference in those two groups.
Warren Buffett, currently the third-richest man in the world according to Forbes, shared some of his investing advice: “If you don’t understand a business, don’t buy it”. We all have different interests and you should make yours work for you, the ultimate goal being to translate that knowledge into valuable trading information.
5. They save money but take risks
In the event of a financial disaster or when a financial opportunity that requires investment presents itself, the average person scrambles to earn enough money to meet their needs. Since they’re in the money game all the time, raising emergency cash in a short amount of time is never an issue.
Saving money is the secret downfall of the masses and while we’re not saying saving is bad, it is the level of consciousness it originates from that could be blocking your future financial opportunities.