Why do you need to adapt the smart money spending and managing habits of the rich?
We are not rich. We are not born with financial freedom.
Not all of us are rich. Financial freedom isn’t something that most of us are born with, and we should all strive for it!
Despite the hype, most of us would never actually work for it. In all honesty, there are a lot of factors that go into winning a lottery, and it’s not just a single trick.
You have to learn how to manage your money in order to become a multi-millionaire.
In all truth, there isn’t an one trick that will make you wealthy, but rather a sequence of strategic strategies and such.
But, in order for that to happen, you’ll need to develop a few new money habits, which may be unfamiliar territory for you.
You probably don’t hold the title of “Multi-millionaire” yet, or else you wouldn’t be reading this post.
But don’t worry if you take action today, the days of financial freedom are not far.
Let start with smart money habits of rich people.
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Here are the smart money habits of the rich,
Rich People Save and Grow their money efficiently.
The annual inflation rate for the United States is 5% for the 12 months ended May 2021 after rising 4.2% previously, according to U.S. Labor Department data. Source: US-Inflation Calculator)
What this means to you,
Each year the worth of dollar is decreasing and the result is due unceremoniously inflation.
Just saving money at savings account won’t make you rich instead it makes you poor due to inflation. This is the reason why rich choose to invest and and make more money over it.
But there are people like my parents who don’t like to invest, for them a high yield savings account is the best fit.
It’s not just my parents even if you’re a business man or a freelancer or a salaried employee just opening a new high yield savings account will give you much higher returns.
Do you know most of the high APY (Annual Percentage Yield) are online savings account and not traditional offline bank?
Online banks have lower overhead costs(since they have no physical branches, bank tellers, etc.).
Also very less expenses compared to traditional banks, therefore higher APYs for customers compared to the traditional banks.
But again one big question,
Which High Yield saving account to choose from?
They keep their expenses low,
Not too surprising but still a little hard to believe right? How come the make millions and still manage to keep their expenses low?
Here are a few ideas to help you keep your costs in check:
1. Don’t spend on luxury items.
Don’t buy items that are expensive which have better alternatives at affordable price available.
If you buy expensive items you only gonna need emi to pay them which isn’t good financial decision.
Our goal should always be to “Be rich” not “Look rich”
2.Cashback While shopping .
You have to join Rakuten if you purchase online frequently like I do (formerly known as Ebates). Earn rewards every time you shop online using our web platform.
This money refund guarantee extends to all purchases, no matter where you got them, from Amazon, Kohls, Nordstrom, or any other retailer (only for online purchases)
3.Use automation to pay your bills
With on-time payments, a tonne of additional costs can be saved. Enabling automatic bill payments frees you up to not worry about it.
For instance, Trim is an excellent Robo-finance tool that will handle all the hard work for you. Not only does Trim handle all of these things, but it also negotiates your internet bill, gets you better vehicle insurance, and much more.
They have multiple sources of income.
in fact, Inc.com reports
The number of self-made millionaires who had three or more streams of income was approximately 65 percent.
In over half of all self-made millionaires, the individuals possessed four or more streams of income.
Among all self-made millionaires, 29% had more than five streams of income
The idea here is simple, having multiple income streams allows you NOT to depend on a single income source. Diversifying your income portfolio will not just increase your income but can also save you from a financial crisis. Even if one of your sources will tank, the rest will make up for it.
If you had a side hustle that makes you a little more money every month, after a period of time, you will no longer need to keep that soul-sucking job you had from the last 10 years.
This is a great idea, consider starting a side hustle from home.
“Work From Home Jobs/Businesses” will give you a means to generate numerous sources of money whether you are working full-time or are a busy mom.
To stay rich, they not only invest millionaires, but also make their money work for them. Read the beginner’s guide to investment to learn about investment requirements and approaches.
We always think of “investing” as related to stocks, real estate, properties, enterprises, and so on whenever we hear the term “invest.”
But have you ever thought about it like this: You are probably your finest investment? Acquire a new skill, and that will be an important financial investment.
They have long-term goals in mind.
Many of us have developed financial illiteracy as a result of our ignorance. These habit patterns we’ve created throughout our entire lives have kept us in poverty and have never gotten us to a level of financial freedom.
There was a time recently when I was interested in buying a smartwatch (priced at $295), I had the money, and I was fully invested in getting it. Just as I was about to click “Buy,” I hesitated and backed out.
I regrettably couldn’t purchase that high-tech tablet for a week because of how much I wanted it.
Once the week was through, I had the opportunity to buy an online course on the topic of making money (which was valued at $197) for just $17 more. Although I knew the content was important, I ended up hesitating and therefore didn’t buy it.
Never bother me after that event.
It then dawned on me.
On the entirety of our lives, we are always more inclined to spend $295 on materialistic junk that does nothing to improve our lives than to invest $197 in talents and opportunities that can benefit our lives in various ways.
Perhaps the top one percent of wealthy people are substantially different from the rest.
In other words, the rich are the ones who pay themselves first.
They concentrate on enhancing their abilities first
First, they seek to diversify their portfolio of income sources.
They try out various approaches first.
They continue to seek financial education.
Financially knowledgeable adults are simply absent from our academic curriculum growing up.
When it comes to such topics as how to handle your taxes, how to save for retirement, 401(k) plans, investments, etc, we often remain in the dark for the most of our adult life.
It is critical that we invest in ourselves in order to understand our money. The one and only responsibility we have is to wake up and look after ourselves without reliance on others.
Not only does Amazon have billions of dollars in assets, but in 2018 the corporation made $11.2 billion in earnings and paid ZERO federal taxes. according to a Washington Post report
I mean, do you have to be financially savvy to think of creative and legal ways that are also smart?
Leverage your money knowledge!
In order to finance their own aspirations, individuals must save a portion of their income so that they can do so.
It is true that many of them still spend a lot of money, but the fact is their income is significantly higher than we can comprehend. We only see the purchases they make, not the money they earn.
When discussing money, here are several facts that may make you anxious:
68% of the workforce are financially precariously positioned.
Over a quarter of households don’t have any funds in case of an emergency.
According to the average household, the average credit card debt incurred by American households is $7,283.
New car payments average $480 per month for a typical household.
While living over their means, the average person ends up being the average!
Lifestyle funding is critical because no one is going to fund your dream.