To get rich and stay rich you need to live the lifestyle of the rich. Life is all about principles, there are some basic principles that are attached to a particular outcome, life is all about cause and effect, when you sow you will reap, whatever goes up comes down e.t.c
For you to get rich and stay rich there are some principles the rich adhere to that have made them get rich and stay rich.
In this articles we have seven of these principles which every rich man knows which can add value to us in our journey of getting rich and staying rich.
Spending must align with goals
One of the keys to being rich is having specific goals. The rich know what they care about.
Whatever goals they might have from passing wealth to another generation or attaining a particular lifestyle. They are always mindful of not wasting resources or things that have no value.
Don’t waste money to impress others.
They are not in the race. They know they are already made, so their attention is not what others think.
They have learnt to live below their means and reject big spending life styles which is one of their secrets of being rich. Spending money to appear rich before you actually are is a surefire way to sabotage your wealth building goals.
I see people who can’t afford three square meals, pay children school fees celebrating elaborate birthday parties for a three year old child. Who are they trying to impress?
Have plenty of liquidity
The rich make sure they have sufficient liquidity or cash to cover their short term needs. They have emergency funds so they don’t disrupt their life for an unexpected occurrence. They have money set aside for raining days. They have cash reserve because they are disciplined to save.
Know what they are paying in investment fees
The rich are very mindful and sensitive to what fees they are paying as regards any investment they make. Know the more you pay in mutual fund fees or transaction fees means less money in your pocket.
Note small fees can have a big impact.
Asset location is as important as asset allocation
If you’ve read anything about investing and saving for retirement, you’ve likely encountered advice about asset allocation. That means having the right mix of investment rather than putting all of your money in just one asset. The rich know that asset location is just as important as asset allocation, they don’t keep all of their asset in one type of account.
Year Round Tax Planning is Crucial
They don’t wait till end of financial year before they start thinking about their tax returns. They take steps throughout the year to lessen the impact of taxes.
Finally they check with financial or tax advisor throughout the year.
They know it is important to surround themselves with knowledgeable legal and financial professionals. Investing in a support system now can help you achieve the wealth you desire down the line. Get the best advisors!