Six things we can learn from the wealthy
In this article, we focus on a range of things we can learn from the wealthy. Take a second and think of someone you really admire. Chances are that nine out of ten of us would have chosen someone who’s successful and wealthy. The wealthy are different. Not only do they have cash the likes of which most could never realistically dream of, they also have a different mentality.
While you might think, “well yes, being worth a few million would make me see the world through different eyes”, it goes deeper than that. Whether you admire the wealthy or not, copying some of their habits could help you become more successful – and wealthier too. Here are just six things they do that could help you.
What can we learn from the wealthy?
To summarise the six key things we can learn from the wealthy are:
- Putting their money to work
- Only ever borrowing to invest
- Being tax-clever
- Retaining control of their funds
- Mixing in the right circles
- Being perceived as shrewd, not tight
Let’s take a look at each.
1: They put their money to work
Whilst we all understand the concept of working for money, not many of us understand the concept where money works for us. The wealthy get their money to work for them by investing. Whether in their education, in property or investing in the markets; the wealthy are good at putting their money to work.
2: They only ever borrow to invest
Whilst one should avoid borrowing to invest in anything high risk, good borrowing would include property purchase or, investing in your education or own business. Borrowing money for luxuries such as holidays, cars or fancy clothes is a to be avoided especially via high interest credit cards and personal loans.
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3: They are tax-clever
There are many tax breaks and tax efficient investments available to UK tax payers but many people don’t know about them and how they work. This is where engaging the services of a good financial adviser and or accountant would make sense. As a first step, use your pension and ISA allowances.
Once those are exhausted boxing clever with how you manage your taxes could make an enormous difference to your wealth. This applies even after you are dead!
Furthermore, they are well-versed in the different ways to avoid inheritance tax and invest in pensions as they are highly tax efficient.
4: They are in control of their funds
The smart, or long-term wealthy, don’t throw away cash like the proverbial footballer’s wife on yet another shopping spree. They watch their money carefully and treat every penny as though it were their last. And that’s how they stay wealthy.
There are plenty of super-wealthy (inherited and self-made) who drive old bangers, live in modest homes and send their kids to state schools. Throwing your money away is a fool’s game and only leads to one thing – you get poorer whilst others getting richer.
5: They mix in the right circles
Wealthy and successful people (who are, after all, often one and the same) mix in circles that benefit them. Opportunities come their way, either because of who they are, where they are, or who they know. Either way, it’s easier for them to come across the sort of opportunities that most of us would die for.
6: They are perceived as shrewd, not tight
Tight and shrewd are not the same thing. Shrewd people have respect for money, whilst tight people are just mean. Take advice and generally act with caution, whether you’re spending, or investing. Money doesn’t grow on trees. It’s hard to come by and even harder to hold on to – unless you follow the wealthy and handle what you’ve got with supreme care.
Related reading: The secret of being an effective saver
Six things we can learn from the wealthy
And there we have it – six things we can learn from the wealthy. If you want what they have, the simplest advice we can offer is to copy their behaviours.
Be shrewd, be tax-savvy, only borrow to invest, and mix in the right circles.
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