Discovering and Applying the Secrets of the World’s Richest People in Your Life
If there was ever a dream or desire that most people share without having to say it out loud to others, it’s the fact that they want to live in financial prosperity. There’s nothing to be ashamed about the fact that you want to be rich, and it’s a perfectly valid aspiration to have. But the thing is that most people aren’t born into a life of luxury and privilege, and thus, they are compelled work hard in order to achieve the kind of wealth they want to have.
In fact, there are countless examples of wealthy individuals who weren’t born rich but worked hard until they reached the point where their goals exceeded their humble expectations. People like Bill Gates and Oprah Winfrey had humble beginnings and ended up being highly influential multi-millionaires due to their diligence and committment to their respective careers. And these well-known figures didn’t just rest on their laurels when they struck gold; they were smart enough to enhance their level of success.
But just like everyone else on the planet, no two billionaires are alike, especially when it comes to the subject of how they were able to acquire their massive wealth. But based on the research of financial analysts and experts, it appears that there are certain things that high net worth individuals do in order to sustain and enhance their earnings. Look to the secrets of the super rich below to know how you can increase your own net worth.
Remain grounded and frugal
The stereotype of rich people being portrayed in media isn’t exactly how some actual rich people live in real life. For instance, Facebook’s founder Mark Zuckerberg (pictured below) doesn’t dress like a typical executive and prefers to wear inexpensive jeans and hoodies as his daily work uniform. Another example is billionaire CEO Warren Buffett, who still lives in the same residence he bought back in 1958 for just over thirty-one thousand dollars.
Too often, most people get blinded by so much money that they tend to blow it all away on frivolous luxuries without thinking about the consequences of living an extravagant lifestyle. Those who are blessed with an excess of financial resources understand the importance of remaining frugal because they know that wealth is merely ephemeral and that the true measure of success is how they contributed to the advancement of society.
Purchase index funds
One of the smartest things that rich people do to help diversify their income is by buying stock market funds. This strategy may be risky considering that global stock market indexes tend to rise and fall frequently, but the major benefit of putting your money on the stock market is that it’s generally low-cost on the buyer’s part and they’ll be able to sell their stocks at a profit if their investments do really well.
It’s important for you to do some research before deciding to invest in the stock market because you must be prudent about purchasing stocks or index funds. Consulting with financial analysts or experts is ideal since they have a better understanding of how the stock market works. Furthermore, this particular options gives you greater fiscal flexibility as it will help save money on expenses and provide you with more investment opportunities.
Learn from your mistakes
Hard as it may be to believe, even the richest people have experienced major problems that caused them to make some bad business decisions. It could be making an investment on a failed business or dividing business ownership without first establishing a proper vesting arrangement—these kinds of mistakes might set you back, but it will help you understand where you went wrong and what you can do to avoid doing them in the future.
Most importantly, encountering mistakes allows you to remain humble and eliminates the presence of hubris. Most wealthy people are highly prone to thinking that they’re infallible or untouchable just because they have an unbelievable amount of resources at their fingertips. Experiencing faults and hardships gives rich people the reality check they need to see that they’re just as human as everyone else.
Trust your investment instincts
Another key aspect that wealthy individuals possess that keeps them ahead of everyone else is that they have the ability to invest in businesses or stocks that they deeply believe in. While everyone else might take caution to the wind, savvy rich people know that following their gut feelings will pay off for as long as they know that there will be minimal risks involved. Simply put, they will only gamble on something if their instincts tell them that it’s worth the risk.
If you want to apply this philosophy to your life, you should think about investing in companies where their brand values are similar to yours. When you can closely relate to the aims of a given business, you’ll get that sense of security that will compel you to take a leap of faith. Moreover, if you invest in something that succeeds, you’ll receive the financial rewards and the knowledge that you supported something that aligns with your beliefs.
Monitoring your cash flow
Rich people who are smart about handling their money are aware of the responsibility that is placed upon their shoulders when it comes to managing their finances. That is why they’re always keeping a very close eye on their cash flow because they need to know where their money is going if they’re going to spend or invest in something, as well as how much money they are getting from their ventures or investments.
It definitely pays to be extra attentive with your cash inflow and outflow because you won’t be able to make any opportunistic moves unless you know the exact state of your finances. For example, if you know that you’re earning more money than spending it, this will give you a great opening to invest your extra earnings into more lucrative business ventures which will help make your portfolio even more attractive and flourishing.
Understand how taxes work
If you want to follow the example of successful rich people, then take a page from their book by understanding how taxes work because it will really prompt you to be more careful with how you decide to use it. Bear in mind that when you invest in something, you’re required to pay taxes for every investment that you do. As such, wealthy individuals know that whatever they decide to invest depends on how much they will be taxed.
For instance, if you were presented with a very promising investment that promises a high rate on return but the taxes are too high for your liking, then you’d be better off putting your money in a special savings account where the bank will let your account grow at a specific interest rate per year. Doing investments are acceptable for as long as you realize the taxation implications of such transactions.
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