Monday, July 9, 2018
10 Wealth Secrets the Rich Don’t Want You to Know
One thing that most middle-class people don’t know is that many wealthy people started out just like them. Most of them worked hard at a job they probably didn’t like, to make ends meat. It was through this hard work along with smart decisions that most made their wealth. For many in the middle-class, the thought that they too could be wealthy has never occurred to them. We often get so caught up in life that our perception becomes our reality. Today, I am going to show you wealth secrets that the rich don’t want you to know. Now, in all honesty, they probably don’t care that you know. Some of them are so simple that you might already know them. Knowing their importance is the next step.
1) Keep a journal
Now, why would something like this be important? The answer is simple: accountability. When I go over my fact-finding questions with a prospective client I always delve into what their short, medium and long-term goals are. Often, they have never thought about them. For many, it never occurs to them that they should have goals. These can include family, financial, career or personal goals. Having them is the first step, writing them done is the second. Keeping track of them is important because as time goes on you will push them to the side, or even forget about them. You absolutely can’t do that. You don’t want to be 80 years old thinking about them and not be able to do anything about it.
2) Value trumps cost
The middle-class often worry about the cost of an item or service, and rightfully so. The problem lies when you worry about cost so much that you forget about the value aspect of any transaction. If I told you that you had to give me $1000 and in a few weeks, I will give you $3000, would you do it? Hell yes, you would do it! What if I was an accountant? You see, wealthy people understand that hiring professionals saves you money. Seeking the advice of those in the know may cost money, but ultimately is a bargain at the end. The poor always focus on sticker shock for items that cost a good amount of money, often neglecting that there is probably a reason they cost that much money. Meanwhile, they are bled dry by small transactions. Always analyze value, not cost.
10 Reasons Why You Should Have a Money Coach – Budget Boss
3) Time trumps money
Nothing, I mean nothing, is more valuable than time. The reason that is so is that time cannot be replaced, almost everything else can be. When I look back at my 20’s I think of all the bad money decisions I made, and it definitely bothers me. What bothers me the most, however, is the amount of time I wasted. I cannot make up those years. I can, and will, make up the money, but I can’t make up the time. One thing people need to understand is that every day you waste is one less day you are wealthy. The rich understand this, which is why they have extreme urgency when it comes to goal-obtainment. I hear it all the time. I will pay that off when I get a better job. Or I will start saving when the summer is over. I am sure you are reading this now and thinking about things you are putting off. When you put things off you have discounted your time, and your time is the most valuable thing you own.
4) Trading time for money
One thing the wealthy the wealthy understand is that you will never become rich if your only method of making money is trading your time for money. What that means is that you must have passive forms of income to create wealth. What are passive forms of income? These include investment income, rental property income, ownership income and anything that makes you money without using your time and effort. What’s better than 1 million in the bank? The 70K a year in interest a year you could earn would be far better in my opinion. If you focus efforts on creating a passive income stream, you will be wealthy. Even something as small as $500 a month can really add up.
5) Be your own boss
There is a fear of going out on your own. The fear is often justified but what needs to be known is that you will never earn your full worth unless you work for yourself. The reason is simple, capitalism isn’t structured for paying people their full worth. If everyone got paid their full worth, then no one would own anything, because there would be no point. While it is impossible for everyone to be self-employed, understanding worth and potential are important. If you work at a job where you know for a fact that you are severely underpaid, you must address that. If you work at a job where you know for a fact that you have reached your earnings potential and it is capped, you must address that. Owners do what they must do to stay in business and turn a profit. You must do the same except for your goals and dreams. Make sure your potential is never capped.
So You Want to Be Your Own Boss… – Entrepreneur
6) Think forever
Rapper Drake said, “You Only Live Once, YOLO,” and people took it and ran with it. In fact, it got said so much it lost its meaning. Drake can say YOLO for one simple reason, he’s rich. YOLO has been used to justify being an idiot whereas it should be used as it was intended, to live a better life. While you might die tomorrow, chances are you will live a long time. What that means is that you must have a long-term outlook when it comes to life. Living life in the now is for rich people and hippies. You must make decisions based on what will better your life in the long-term. This includes saving and investing your money. Thinking long-term will help your money grow and enable you to achieve major goals like retiring wealthy. If all the choices you make are to get through the month, all you will ever do is get through the month.
7) Never panic
Another important topic is panic. People have lost more money panicking throughout history than in any other way. I have a few clients that were paid extra compensation by their employers with stock options. Every payday they would buy a share of their company’s stock and the employer would match that share and give them one for free. Over the past 20 years, there have been 2 major stock market declines, the dot.com bubble in the early 2000’s and the crash of 2008. Each time, people with company stocks got hit hard and lost much of the value of their portfolio. Those that sold missed out on a huge windfall, whereas those that held on made all their money back and much, much more. There are no absolutes in investing, but one thing is tried and tested. You never make money by buying high and selling low. Panic will destroy your bottom line and even prevent you from obtaining your goals. It could be the difference between retiring early, or not at all.
8) Understand markup
While I appreciate the concept behind the “Latte Effect,” (the Latte Effect states that if you save small amounts consistently you will become wealthy over time) I believe it is not the greatest problem. We live in a throwaway society and sadly one of those things we throw away is our money. There are certain establishments that destroy your bottom-line with markup. The leading culprit is restaurants. Think about it, they buy a beer for $1.50 and sell it to you for $5. They buy a chicken breast for $1.00, cook it, and sell it to you for $12. The wealthy know that spending too much time dining out will crush your bottom-line. Treating yourself with a $5 latte here and there is nothing compared to $100 nights out, once a week. Remember that if you spend more money every month on pizza and wings than you save, you have messed up. Big time.
Prioritizing Your Spending – Budget Boss
9) Ignore the bullshit
There is a whole industry of bullshit that exists. Much of it is contained with the media we consume. Here is a list of things that don’t matter:
- What celebrities do, ever
- What politicians are doing, for the most part
- What some “expert” thinks about any subject
- What the people who don’t live in your home think
- What is on the news, for the most part
The reason these things are not important is that they don’t better your life at all. Celebrities do not care about you and by paying attention to them you are indirectly making them richer. Politicians are not in the business of saving you. It is idiotic to think they will ever make your life better. What they can do is try to not make your life worse and institute programs that help those who need it. Experts are important when it comes to planning, not when it comes to predictions, like how the stock market will fair. If an expert could consistently predict the market you would never know, because they would never tell anyone. People outside your door will think what they want about you, just like you do about them. We all have biases, so it is important to understand other people’s opinions are meaningless to your life. Lastly, the news is in the business of staying in business. They stay in business by getting you to watch. They get you to watch by sensationalizing almost everything. If we all focused on what was important to us and our families as much as we did about everything is, the world would be a better place. The wealthy focus on the things that matter to them, the poor focus on what everyone else is doing.
10) Think efficiency
A tried and tested strategy to obtain wealth is to focus on efficiency. The wealthy know that there are obstacles in their way as they attempt to obtain wealth. These obstacles are taxes, interest rates, fees and their own habits. As a rule, they try to pay as little tax as possible, eliminate high-interest debt, save on fees, and develop wealthy habits. Many people complain about taxes and yet never do anything to lower their taxable burden. Many more complain about the wealth of large institutions yet make them richer by paying absurd interest rates on debt. Even more still complain the world is out the get them and yet it is their habits that ultimately do them in. Eliminate debt, save your money, invest for the future and pay as little tax as you can along the way. That is an efficient machine that will lead to wealth. It is not brain surgery, it is common sense. The wealthy use this only a daily basis and it dictates how they run their lives.
As you probably realize, these secrets aren’t secrets at all. They are a simple, straight-forward approach to becoming wealthy. If you apply them, the possibilities are endless. The wealthy attempt daily to lessen the effects of the things they can’t control and magnify the things that they can. At that point, it is all about making sound decisions. Do that, and you will be wealthy indeed.
“The only question with wealth is, what do you do with it?” – John D. Rockefeller
Email – joe@budgetboss.ca
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