A large percentage of the wealthy have a lot in common with regards to the way they handle their finances. This is according to a survey conducted by U.S. Trust encompassing nearly 70 high-net-worth investors.
The survey delivered some interesting insight into the way rich people grow their wealth. Let’s take a look at five ways rich people grow their money, and what you should consider doing as well.
1. Rich People Delay Gratification
This might seem strange, especially with the world’s association of excess and opulence when it comes to rich people. However, more than eight in 10 of the high-net-worth investors surveyed report that their long-term investment goals are more important than bankrolling their current needs. If you’re serious about building wealth, then the ability to delay gratification is one of the first disciplines you’ll have to master.
2. Rich People Use Credit Strategically
Rich people consider credit a great way to build wealth. Put simply, they use credit to build their own wealth but in a strategic way. Successful investors know how to use credit to their financial advantage.
It can be easy to let credit get out of control, so keep the strategic use aspect front of mind. Also keep in mind that credit can become costly, and you want to avoid falling into a debt spiral at all costs.
3. Rich People Have Long-Term Vision
Many of the investors surveyed reported that they made their most significant investment gains using long-term buy and hold strategies. This strategy involves acquiring investments and retaining them for many years.
This is solid advice that investment guru Warren Buffett himself lives by as well. According to Buffet, money is made in investments by investing. He also says that money is made in owning great companies for long periods of time.
4. Rich People Make Tax-Savvy Investment Choices
Many successful investors will tell you that investment choices factoring in tax implications make more sound sense than pursuing investments with high returns, irrespective of tax implications. This is because what really matters is the net pay – how much you’re netting post-taxes.
It can be easy to get flustered by big numbers, but do you know what you’re really getting at the end of the day? Invest smartly and know what returns you’re truly receiving after everyone receives their share of the pie.
5. Rich People Invest In Tangible Assets
Roughly half of the high-net-worth individuals surveyed say they’ve invested in tangible assets, such as investments in farmland and real estate that can produce income and experience growth over time. Adding real estate to your investment acts as a good diversifier and a solid additional income source. It’s the staple of a well-rounded investment portfolio.
These are only five ways in which rich people become richer. If you tailor these points to your own wealth building strategy, you’ll be well on your way to reaching your financial goals.
Louis Stevens is a South African writer who enjoys writing about the financial news while learning valuable insights about the management of wealth. When not writing for Archetype Copywriting or Yalu Credit Life Insurance Providers, Louis can be found scrolling through wealth management blogs ing trending articles