What’s that phrase populating the internet today? Oh yeah, eat the rich.
Here are ten secrets about money that the one percent has figured out. But there is nothing stopping the rest of us from applying these lessons to improve our financial situation.
1. Debt Can Be Good
Many people look down on debt and despise owing money, but having good debt increases your leverage. Rich people tend to have property or vehicle debt but have plans to pay it off.
2. Spend Less Than You Make
Although this tactic seems simple, many people spend more than their income brings in. You must control how much money comes in and how much you use for daily life. Make sure the income is always higher.
3. Invest
I have a friend with a wealthy father who made her begin investing and buying stocks when she turned 18. However, you must educate yourself on the stock market to understand where to invest. She spent about a year researching the market.
4. Pay Attention to Your Bank Accounts
Do you receive a check before or after taxes? Before taxes, you’ll see the whole amount for the desired work period; post-taxes, you may tear up looking at the lost money. To avoid receiving checks post taxes, rich people classify their bank accounts as independent contractors or freelance accounts to trick the bank.
5. Write-Offs Are Huge
After receiving pre-tax salary checks, the wealthy invest and use their money wisely, distributing cash to various accounts before writing off their purchases in tax season. Depending on how you file your taxes, you can write off business expenses, healthcare, childcare, property taxes, travel expenses, and rent deductions to lower the amount you pay to the IRS.
6. Passive Income is a Huge Factor in Wealth
Instead of focusing only on salary streams of income, the wealthy look for other methods of cash flow to set up to increase their net worth. Passive income refers to money made while you sleep without much effort. investments, funds, real estate, and vending machines are some examples that generate passive income
7. Work With Other People’s Money
Here’s another cliche for you. Teamwork makes the dream work. According to rich individuals, fundraising and collecting money from banks or lenders can create a greater output, giving you more wealth than when you started.
8. Bigger Picture
Rich people say they avoid daily treats because they see how that affects the bigger picture. If you buy a cup of tea from Starbucks each day, you lose out on that much money you could throw into your own business and stocks. Instead, the rich buy in bulk and plan where they want each dollar.
9. Write it Down
Sometimes people are born into wealth, but self-starters meticulously plan each step of their path. Those who write down plans are likelier to follow through and see success than those who don’t.
10. Save
Aside from having multiple income streams, the wealthy know how to save a good amount of cash to live off of in case of emergencies. The stock market fluctuates daily, and since the rich invest so much money in stocks, they need a reserve of funds to keep them going.
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