There’s no shame in a modest lifestyle – even Warren Buffett lives frugally. But if your goal is to get rich, know these secrets the ultra-wealthy aren’t likely to share.
SALARY ISN’T THE WHOLE STORY
Climbing the corporate ladder will only get you so far. At some point, you reach your earnings potential and plateau. It’s important to make your money work hard for you – not the other way around. Generating income from passive, rather than active, income sources is the best way to do this. Investments that yield passive income include dividend-paying securities, rental properties, profits from a business you do not directly manage on a daily basis – even royalties on creative work or inventions.
TAKE ADVANTAGE OF TIME, NOT TIMING
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If the recent market activity proves anything, it’s that no one can predict what the market will do tomorrow. The wealthy know this and make no attempt to moonlight as day-traders.
“Time is more important to investment success than timing,” financial planner Peter Lazaroff said. Adopt an unsexy buy-and-hold strategy, ride out market fluctuations and ignore speculation.
PUT IT IN WRITING
The difference between having an idea and putting it on paper is often what separates the uber-successful from average folks. Start writing down your goals, both large and small, in order to become rich. Thomas Corley, author of “Rich Habits: The Daily Success Habits of Wealthy Individuals,” noted that 67 percent of the wealthy people he surveyed wrote down their goals, while 81 percent kept a to-do list.
UNDERSTAND VALUE OVER COST
According to Justin J. Kumar, a portfolio manager, “The wealthy person has three best friends: her attorney, her accountant and her adviser. The wealthy tend to use the law and tax code to their advantage when figuring out how to maximize their wealth, especially over multiple generations, and they are not afraid to spend money up front for counsel to get these answers.”
Kumar said it’s common for middle-income Americans to cut corners to save money, yet ultimately find the results lacking.