We ordinary people can learn valuable ways to save money from the rich. The following are the secrets of rich people’s investment and financial management disclosed to ordinary people by financial experts who have worked for the high-income class for a long time.
One, do not spend money easily. If you have the opportunity to walk in the residential area of ​​the rich in the United States, you will find that most of the local cars are high-end luxury cars, but few of them are the latest models. Generally, it has a history of several years. The reason is that the rich are always very careful when spending their money. They use the money to buy a new car on the most valuable investment aspects, such as stocks, etc. They have amazing frugal ways in life.
Second, expenditure is often for better income in the future. The rich tend to arrange the use of income in a way that money can generate money. After paying monthly expenses, they prioritize the investment with the highest return rate, and then consider entertainment, vacations and other hobbies.
Third, have unique insights into risks. The stock market is of course risky, but if you choose low-risk investment, the return is also very low. Since 1962, the average return rate of the stock market around the world is 11%, while the return rate of other investments is 3.8%, including taxes . This is why most rich people always make money by investing in stocks for a long time, regardless of their ups and downs day after day, and they don’t make a one-time investment, but invest in a combination of installments. In addition, they also have various forms of decentralized investment methods to ensure the safety of funds and the stability of income.
Fourth, always ask for help. Before they become rich, the rich pay attention to borrowing the wisdom of others to make money. According to the statistics of the American Consumer Association, most families with an average annual income of less than 100,000 US dollars in the United States have investment plans, and more people always They rely on the help of financial investment consultants in order to find the best money-saving skills. From buying high-end real estate to providing for their children’s college education expenses, they cannot do without the help of investment consultants. Foreign professional financial planners tell their clients Charging $75 to $250 an hour may seem like a lot, but once their program is put into action and it pays off, it can be very lucrative.
5. Always prepare for the worst. The rich always put risk in the first place. Buying risk insurance is a necessary expense for them. By paying a few hundred dollars in insurance premiums every year, they can work without worry. Accident coverage up to $1 million.
Six, know the beauty of accounting comparison. “Millionaires never use credit cards to pay their bills,” said Richard Rojack, president of the International Association of Financial Planning. The reason is that the tax rate of the credit card is very high. Once the debt is overdrafted and the debt is not paid off as soon as possible, the tax will be paid more. When the rich need to borrow debts to invest, there are other methods, such as mortgages on real estate. Moreover, they all carefully calculate an account to see if they have the ability to repay the loan, or to see if their return on investment is higher than the mortgage loan rate, and make a rational choice after various trade-offs.
Seven, never give up the opportunity to make money at your fingertips. Most people agree that little is known about how the rich make their money. In fact, this is a misunderstanding. Rich people know more than ordinary people that they are good at seizing opportunities to make money. They can often learn useful knowledge from successful companies and learn from other people’s experience, just like making money in other people’s ways.
Eight, pay attention to taxes when investing. The rich always invest their excess funds in a certain way to obtain greater returns. They will naturally turn their attention to attractive investment funds, and in the portfolio of investment funds, there are always quite a few Funds are constantly operating in the stock market. Therefore, when they choose investment funds, they all know how frequently the fund company buys and sells, because it directly affects the company’s interests. Generally speaking, the buying and selling frequency of fund companies that invest in securities is inversely proportional to their income, because the higher the frequency, the higher the tax must be paid, and the higher the investment cost, the higher the income tax. The rich have made shrewd choices accordingly to avoid tax offsets for their limited funds. The reason why the rich become rich lies in the above-mentioned seemingly ordinary but higher-than-usual means of financial management. If you master these, you will start to own wealth.
