It’s a well-known truism that it takes a certain kind of person, with a certain kind of mindset to become wealthy. Those who make up the ranks of the global 1% didn’t just get there by getting lucky and sitting on their money for all eternity. They use a number of tried and tested methods to nurture their wealth, allowing it to grow so that they don’t have to worry about being wiped out by a spell of bad luck.
A big win from a lucky bet or a genius business decision might be enough to launch you into the big leagues, but it’s easy to fall back out again if you don’t know the tricks of the trade. There are certain tips and tricks that rich people use to keep their finances healthy – methods that have a high success rate and that are generally seen as quite low-risk ways to shore up your assets.
Here are the top ten financial tricks that rich people use to stay rich.
Save, Save, Save
This one might seem rather obvious, but it can’t be overstated. According to Daria from Red Eye CPA, no matter where you fall on the income spectrum, saving should always be your first and foremost priority. Whether you earn $10,000 or $100,000 a year, a little bit a planning means you’ll be able to start putting money aside, even if you’re living paycheck to paycheck.
Saving should be considered an essential cost rather than a nice bonus activity to do when you’re feeling flush. The wealthy often commit to putting around 20% of their income into a savings account, meaning that they’ll always have plenty of reserves left over for a rainy day.
Don’t Try to Play the System
People try time and again to play the system and cheat their way to prosperity, and this more often than not will come back to haunt you. The most surefire way to look after your wealth is to ensure that it isn’t needlessly lost through attempts to cheat the law or get rich quick. This means always anticipate any fees and pay them on time, read the small print for any financial agreement you enter and ensure you stick to it, and of course, pay your taxes.
While the wealthiest of society finding innovative ways to avoid paying tax is nothing new, the majority of wealthy people pay their taxes in full, as it’s a much more attractive alternative to being clocked by the IRS and being slapped with a multi-million dollar fine.
Always Ask for Bonuses
Rich people are rarely humble, as they know that there is always a little extra to be had, if only they ask for it. This applies to everything in life, from business deals to sign up to a new service – ask and you shall receive. This also applies to pretty much any decision in life.
For example, if you were going to start boosting your fortune by betting big with casinos or bookmakers, why choose a platform which won’t offer you anything for your custom, when you can opt for a platform like Oddschecker, which gives out generous matched deposit bonuses to new members? As a rule, never pay for something that you could get for free from the right person.
Stick to One Credit Card
This is one that many people don’t often consider. While middle-class people often have multiple credit cards in order to spread out their payments, rich people tend to only ever have one. This is primarily because it allows you to keep track of your finances much more easily, and avoid any late fees or damaging impacts on your credit score.
If you have multiple credit cards, chances are you’re doing something wrong with your personal finances, as someone on tops of their money would not need more than one credit-based form of payment. A credit card is a financial necessity as it allows you to insure yourself for large purchases, but they can also become a burden that will leave you in debt. One credit card is all you’ll ever need.
Invest in a Slow-Burner
It’s tempting when following the drama on Wall Street to think that all you need is one lucky investment to propel you into the upper echelons of society overnight. The truth is, there are more than enough scam-artists out there to convince you to pile all of your money into what they’ll tell you is going to be the next Facebook.
However, the stock market is unknowable, and your best bet is always going to be investing in a slow-burner that will see your returns increase over an extended period of time. This also applies to many other forms of investment, such as housing and artwork. The soundest investments are almost always the ones that increase in value gradually.
Don’t Rent, If You Can Help It
While homeownership may seem increasingly out of reach to many people, renting is seen by the wealthy as nothing more than a bottomless money pit. Going the extra mile to ensure that you actually own whatever it is that you’re paying for is a time-honored financial tip that’ll keep your wealth much more safe and secure. If you can help it, do everything you can to avoid renting out assets, as the only thing this is doing is transferring your wealth to the owners of those assets.
This goes beyond housing; cars, appliances, vacation homes and even clothing are all hugely popular to rent, despite the fact that you aren’t actually gaining any assets in exchange for your hard-earned cash. Ownership is one of the only sure-fire paths to security, to this should always be high on your list of priorities.
Stay on Top of Outgoings
Keeping on top of your personal finances can seem like a challenge, especially if you have a lot of outgoings, but being able to monitor exactly what you’re spending will guarantee financial security. If you’re the type of person who would rather not check your bank balance, especially after a particularly extravagant weekend, then you’re doing it all wrong.
You should be comfortable confronting your spending habits so that you know what you need to change, or what exactly you’re wasting money on. Keep a spreadsheet documenting all of your monthly expenditures, and ideally use a banking system which gives you alerts and updates on your spending habits. If the results alarm you, then use that to push for change and achieve healthy financial habits.
Diversify Your Investments
Even if you’re a savvy investor, one of the worst mistakes you can make is betting on one horse. Even the most sure-thing investments are prone to collapse, so make sure your assets are evenly spread across a wide variety of sectors. The wealthy always recognize the importance of having as many backups up your sleeve as possible, as they more than anyone understand the volatility of the market.
Having diversified investments also greatly enhances your chances of striking it lucky and receiving massive returns on a good bet. It’s always better to have lots of small investments spread far and wide, rather than a single massive investment that you’re hoping will make you rich.
Never Pay Full Price
The wealthy might be able to afford the asking price, but that doesn’t mean they pay it. It all comes down to exploiting every and any available opportunity – a cornerstone of the wealthy mindset. You might think you’re getting a great deal on a $1 million dollar home that your advisors tell you will quadruple in value, and this may be completely true, but why pay full price if you don’t have to?
Learn the art of negotiation, and never be afraid to ask for a lower price with anything. The worst any seller can do is say no, and more often than you’d think, they’ll be happy to accept lower prices in return for your custom. Always ask for more, and you shall receive.
Don’t Get Complacent
A good piece of imparting wisdom is this; no matter how secure you feel with your finances, and how rosy your returns look, never just sit back and rest on your laurels. A staggering 99% of Americans who reach the top 1% of earners fall out of that bracket within a decade, often never to return. This is because they become complacent and assume that the good times will never end, which any seasoned money maker will tell you, is simply not true.
While these are tips that are used by the very wealthiest in society, anyone can apply them to not only attain great wealth but maintain it also.