5 Ways How The Rich Stay Rich

The Rich Are Rich for a Reason

Many of us envy the rich, being able to live in financial security without worrying about paying the bills, or having enough money to live comfortably. But how did they get there?

Again, many of us believe that we will never truly be that rich.

Unless we have some secret, hidden talent, we will remain in our current financial position.

If you think like that you may settle for mediocre investments, that is if you invest your money at all.

The richest people, those who have at the bare minimum $3 million in investable assets, actually follow a somewhat predictable and steady pattern when handling their money.

They are not merely wealthy off of a whim; they are rich for a reason.

They think about their money much differently than the rest of the world does.

Financial management is critical to keeping and growing their wealth.

When we look at the top 700 investors with a high net worth, we see that they invest very similarly.

They follow what they can understand as a set of unspoken rules or guidelines from which they use to guide their investments, and spend their money.

If you want to raise your financial status, you can follow a similar pattern.

These are the top 5 guidelines from the investment playbook of the wealthy that you can use in your regular trading to boost your financial status.

[ms_divider style=”normal” align=”left” width=”100%” margin_top=”30″ margin_bottom=”30″ border_size=”5″ border_color=”#f2f2f2″ icon=”” class=”” id=””][/ms_divider]
[ms_featurebox style=”4″ title_font_size=”18″ title_color=”#2b2b2b” icon_circle=”no” icon_size=”46″ title=”Recommended Link” icon=”” alignment=”left” icon_animation_type=”” icon_color=”” icon_background_color=”” icon_border_color=”” icon_border_width=”0″ flip_icon=”none” spinning_icon=”no” icon_image=”” icon_image_width=”0″ icon_image_height=”” link_url=”https://offers.thecapitalist.com/p/warrenbuffet/index” link_target=”_blank” link_text=”Click Here To Find Out What It Said…” link_color=”#4885bf” content_color=”” content_box_background_color=”” class=”” id=””]Warren Buffett Just Told His Heirs What He Wants them To Do With His Fortune When He Dies. [/ms_featurebox]
[ms_divider style=”normal” align=”left” width=”100%” margin_top=”30″ margin_bottom=”30″ border_size=”5″ border_color=”#f2f2f2″ icon=”” class=”” id=””][/ms_divider]

Say No to Instant Gratification

One of the biggest problems that people face is that when they get money, they want to spend it.

In the world we live in, we are always swarmed with advertisements for the latest and greatest innovations and items.

We are being told to buy these things, and that we need to have them.

We have also become accustomed to instant gratification, that feeling that we can have whatever we want when we want it.

We all know this feeling when you see something you want, and buy it just because you want it.

You do not think about it; you just do it.

But one of the first rules of smart investing is to say no to instant gratification.

Almost every investor with a high net worth will tell you that the most important thing to do with your money before you do anything else is to invest it.

You must hold to longer term investing goals, rather than using your money to buy everything that you want or need at the moment.

Many people will buy everything that they want and need, and then use what is left to invest.

Instead, follow the wealthy, and make saving money and investing money one of your top priorities, and then spend money.

It can make a world of difference to your savings and investment goals.

To give an example, if you took $100 that you spent on clothing each month and placed it in a retirement fund, or your savings fund, at the end of 20 years, you would have $40,000.

Of course, this is assuming that your fund will have a 5% rate of return.

It is also advised to begin saving early, rather than later.

Use Credit When it is Strategically Smart

Credit has quickly become one of the most misunderstood and misused financial tools.

Many people use credit as a way of buying more than they should.

We see something we want, but we do not have the money in our bank accounts to pay for it.

So, rather than waiting to pay for the item, we use our credit cards.

We can postpone paying for it, necessarily.

But too many people have charged their credit cards up to their maximum, wasting its potential.

The wealthy do not use credit in this way.

Many of the top financial investors and financial analysts believe that credit can be a smart way to help build wealth, but only when it is used to their economic advantage.

Credit is not utilized by every investor; many believe that it can be too risky, and one should only use it in emergency situations where one cannot find immediate funding for basic needs.

However, a vast majority of the most lucrative investors at the higher end of the commercial scale believe that it is a good idea.

The average person can use credit to their advantage in several ways.

The first of which is to pay your full credit card off every month, and use the ensuing rewards perks for extra spending.

For larger loans, such as student loans or mortgages, rather than paying them off as quickly as you can, pay them at the agreed upon schedule.

With the money you would have used paying them off quickly, you can use that money to add to your savings or investment funds.

Utilize the Buy and Hold Strategy

When people get into investing and trading in stocks, the temptation to use a quick and fast trading strategy becomes very hard to turn down.

The excitement of the business and the possibility of a high and immediate financial return is often a substantial motivating factor.

However, there are many drawbacks to this method.

By only using short-term trades, you are missing out on the chance to see a stock grow.

You may only choose to go after immediately high stocks which will give you a decent return, but you will miss out on an even bigger return if you had waited for the stock to mature and reach its full potential.

Almost all high net worth investors say that some of the best and biggest investment returns have occurred when they follow the buy and hold strategy.

It is a long-term plan, typically lasting many years.

You purchase a stock that you see potential in, and that you believe will increase in value if it has the time to mature.

Rather than try and find complicated stocks or groups of stocks, most investors typically purchase traditional bonds and stocks to use when they follow this strategy.

For those who are looking to apply this into their regular financial investing routines, you can begin by taking one of two routes.

One of the best routes is to start looking at the markets and seeing what companies are famous.

Being a known company does not mean that it will be successful, and you will need to look at the company’s market statistics as well as its profit margins.

You can also go the second route, which is less advisable.

You can follow the advice of well-known financial investors, such as Warren Buffett, and trade in companies that they recommend.

Always Remember the Taxes

As the famous saying goes, “In this world, nothing can be said to be certain, except death and taxes.”

Despite this, many people make major financial decisions without looking at the impact it will have on their taxes.

Even when people make smart investments which bring back huge returns, they do not see that it will still have implications for their taxes.

Improper tax management, no matter how well your investment and financial management skills are, can wreck a person’s total gains.

To be truly and completely successful at building and maintaining wealth, you need to be able to look at a potential investment, and see how it will give you a profitable return, as well as be a good tax decision.

For those who make productive investments but reduced tax decisions, they can lose up to 40% of their returns to taxes.

Most investors will tell you that when you are making important investment decisions, a plan that will include the tax implications will always be more effective than programs which ignore the importance of taxes.

To be savvy about making positive tax decisions with your investments, you will need to look at the type of investment that you are going to make.

For those who are seeking to invest for their retirement, some of the best ways to do this are to use a tax-advantaged plan.

The plan includes 401(k) and IRA plans.

For those looking to save money for their children, 529 plans are a good option.

Any flexible spending account could be used to stock money without adverse tax implications.

Tangible Assets Should Not Be Ignored

As the financial world around us becomes more and more uncertain, people are becoming more and more unsure about the types of investments they should pursue.

What is a smart investment, and what is not?

Should you look to stocks and Wall Street?

Or should you buy a house?

With all of the confusing messages coming from the media and financial analysts, it is no wonder that people do not believe anything that they hear. Many follow different strategies and trading philosophies, but the best is one which combines trading stocks and bonds and intangible investments, with tangible assets.

Most of the world’s most successful investors own more than just stocks and bonds, but will invest in something tangible, like property.

Real estate can be one of the most profitable investments that a person can make.

Purchasing property can help you secure two of these five tips from high net worth investors.

Buying into real estate is a tangible investment that gives you a diverse set of investments that you can use.

It can also give you a long term investment, following the buy and hold investment strategy.

You can purchase real estate and hold onto it until it is worth enough money for you to sell it.