3 Personal Finance Secrets of Successful, Wealthy People

The mega rich seem to have it all. A house in the Hamptons, a yacht in the Med and a Chihuahua named Coco. Some got to where they are by having a multi-million-dollar idea and others were lucky enough to have a wealthy relative that passed on their fortune. Others worked hard and made the right investments. Regardless of how the rich accumulate their wealth, they all seem to have some traits in common when it comes to their attitude towards personal finance. Interested to grow your net worth and find out what secrets they are hiding?

Make Money Work for You

Most of us work for money rather than letting our money work for us. If you want to build your wealth and break the boundaries on your earning potential, it’s time to think of creative ways to get the money you do have working for you. If you’ve just graduated from college, start by refinancing your existing student loans into a new loan with a private lender so you’ll be left with one loan and new repayment terms. You can choose your payment and term and that money you save each month can be used to generate new sources of passive income. Good examples of passive income include real estate, investing in the stock market and royalties on creative works. 

Do Not Keep Up with the Joneses

Keeping up with the Joneses – when you cannot afford to – will set you back in your goal to reach financial independence. A large percentage of people who drive a Bentley and live in a big house in the country got to where they are by living frugally and being smart with their financial choices. Don’t get caught up in your vision for the future by living beyond your means now and putting yourself under huge strain with big loans and mortgages that you will never be able to pay back. Ignore the Joneses for now and your future self will certainly thank you for it. 

The Dollar is Not the Most Valuable Currency

So, what is more valuable than the dollar? It’s simple – your time. Time is your most valuable asset and you must leverage it as best you can. Apply this principal to tax saving investments and you will soon realize the benefit of time when it comes to building wealth. Let’s say you invested $10,000 in stocks when you were 25. With an 8% annual rate of return, your $10,000 will be worth $217,000 when you reach 65 years of age. 

Now let’s say you wait another 10 years, and you don’t make the investment until you’re 35. With the same annual rate of return, you’ll only receive $101,000. That’s a huge difference in the space of just 10 years. The same logic can be applied to your working life – are you happy to trade one hour of your time for $30 with a ceiling on your max earnings? Or do you think it’s more beneficial to invest your time in learning about ways you can leverage the funds you do have to make you more money with no ceiling on your max ROI?

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