Top 6 Things to do When You are Rich
If you are still struggling to achieve financial independence, then it may seem like the wealthy have it easy – that they don’t have to worry about a thing. However, there are Top 6 Things to do When You are Rich to make sure you stay at the “top“.
Luckily, anyone can apply these things to their lives. There are lessons for everyone to be learned from how the very rich conduct their lives, what they focus on and how they maintain their wealth.
Plus, most people who are wealthy have done all the hard work themselves too – out of the 200 people on the Australian BRW Rich List for 2017 just 18% of the top 34 had inherited their wealth, and only four people out of the top 10.
When you are rich, it is not enough to stand still and enjoy it. Instead, the following are 6 things that rich people need to do to maintain their wealth. We can all learn from in our quest for successful money management.
Top 6 Things to do When You are Rich
- Maintain Attitude
- The right Surroundings and Awareness
- Ongoing Learning
- Net worth
- Save Money on Insurance
1. Maintain Attitude
The rich didn’t get where they are lamenting their bad luck. Instead, they have an attitude of wealth. For example, rich people know they create their lives, life doesn’t just happen
Do not Depend on Luck
When you are down on your luck, it is easy to feel like you have no control. Life is just happening to you. However, rich people realise that they are in control of their lives. They are the ones who have the opportunity to make that life a prosperous one.
No matter what is happening with the economy or their luck, rich people don’t blame their circumstances, instead, they know they have the power to change and control their future.
Rich people will always think big, whereas when you’re not rich, you tend to think only within your small sphere of life. Poor people often think that wanting to be rich is being greedy. They don’t need to make a million dollars when they have a job which brings in enough to pay their bills.
Rich people know that they are wasting their minds if they don’t think big and dream big. They want to do whatever they can to create the best life for themselves and their family.
Stay committed to their dreams
Rich or poor we all have dreams, but when you are rich you have to stay committed to those dreams in order to achieve them. Many people want to be rich, but what are they doing about it? Instead, rich people will get into the mindset of doing whatever it takes to realise their dreams.
It is usually human nature to be generous. Wealthy Britishers give just 1% of their wealth to philanthropic causes, while Americans give 15%. Rich people know they can’t help everyone, and their priority is to look after themselves and their family first.
Know money is a tool, not the end goal
Successful rich people know that money isn’t the ultimate goal in life. Money is only the tool which allows you to achieve those goals.
While having an abundance of money is a good dream. You need to do something with it that will make you happy, or better your life. It could be anything like buying a beach house, putting your children through a good school or seeing the world.
When you are rich, you also have to be confident. Confidence is a crucial part because you are making big decisions and big deals with large amounts of money. You need to be able to back your decisions, to make sure others back you for success. The confidence of the rich comes from:
Playing to win
When you play the money game you have to do so with the aim of winning. Play with an ultimate aim is what rich people do. However, when you are poor you don’t have the confidence to play to win. The aim of poor people is to simply not lose their money.
Focusing on opportunities
We all have both opportunities and obstacles in our lives, but the rich have the confidence to look at an obstacle and turn it into an opportunity. This means looking at what can be done, not what can’t be done.
3. The Right Surroundings and Awareness
Rich people also have to be very aware of their surroundings. It is necessary to make sure they are fostering the right environment for success. This means surrounding themselves with other rich and successful people.
If you are poor then all of your friends are probably poor too. The more you mix with a certain type of person, the more you think like them. Therefore, when you associate with rich and successful people you will start to see possibilities and opportunities and change your attitude towards money.
Effective and Timely Calculations
When you are rich you also have to be constantly aware of where your money is going. Treat your finances like a business. It is important to have every expense is categorised and scrutinised, so you can manage your spending.
For example, if your dining expenses are high this month then cut back for a while; rich people may seem to live the high life all the time, but the expenses of that high life are all carefully budgeted for.
4. Ongoing Learning
Knowledge and information are important to your financial success, however, this doesn’t mean that all rich people are highly educated.
While many of the (small percentage of) rich people who inherited their wealth went to private schools, many attended an ordinary public school, and on the BRW Rich List for 2017, seven of the featured Australians didn’t even finish high school.
Instead, ongoing learning for the rich means:
Being a good learner
Rich people know that just because they are rich, that doesn’t automatically make them all-knowing. Where poor people think that they have learned everything they need to know, rich people are always looking for new opportunities to expand their skills and knowledge.
Accumulating wealth takes time, and the rich know this and know not to rush. Of the 200 people on the Australian BRW Rich List for 201, 62 of them are 70 years or older and only 24 are under 50 years old, with the youngest listed person being 35 years old.
Wealth doesn’t always last and rich people know that they have to continue to work at maintaining their financial position. This means continuing to learn about new trends, new products and new ways to accumulate and manage their wealth.
5. Net Worth
It is easy to confuse material possessions with wealth because society views a big house and a luxury car as signs of success. However, having an expensive car or two in the driveway of your expensive house doesn’t make you rich, this is a mistake that poor people make.
Rich people know that true wealth is determined by their net worth and therefore monitor their net worth regularly.
Accurate Evaluation of Wealth
Your net worth is the difference between what you own and what you owe, and for many people, especially those who appear wealthy, their net worth figure is a negative number. Net worth gives a true picture of your financial situation and is the best indicator of your financial success because it shows the amount you would be worth if you had to liquidate your assets today.
For example, you may live in a house which is worth $2 million, but if you have a mortgage on that property with $1.5 million remaining on the principal loan amount, your multi-million dollar house is only contributing $500,000 to your net worth.
Investments for better future
Rich people know that living in a multi-million dollar house doesn’t make them a millionaire, and so they will focus their funds on a range of investments which will increase in value, over and above the amount they owe on mortgages, car loans, and margin loans. Rich people make sure that they spend less than they earn and this is what makes them truly rich.
6. Save Money on Insurance
The importance of buying home insurance should never be underestimated and it’s risky in the extreme to think that you can do without it. A whole range of scenarios could occur that might result in you to needing urgent financial assistance and this is when buying the right cover will prove a shrewd investment.
It can, though, be quite expensive, so, in order to reduce the cost as much as possible, check out the following tips.
Save money on home insurance
Log on to get great discounts
The Internet has revolutionized how consumers go about purchasing everything from your house itself to all the various items with which you fill a property.
Insurance – be it a car, home or travel – works out a great deal cheaper online, especially if you enlist the help of a price comparison website, where you’ll receive an instant series of quotes from lots of different companies. If you want to save yourself time and money, click here for more information.
Time for a bit of DIY
Don’t be fooled into thinking insurance companies can hold you to ransom because there are ways other than shopping around to find better deals online –take a pro-active lead and do your bit in the home itself.
Get a burglar alarm fitted to your property and motion-sensor security lights as these should hopefully deter any members of the criminal fraternity from your house as well as get you cheaper premiums.
Buying CCTV cameras is another option. If you can’t afford the real deal, don’t worry, because you can also buy ‘fake’ cameras that produce the same effect. Plant thorny bushes under windows to make them an unappealing exit/entrance point for any potential thieves. Fit secure locks to doors and windows, too.
Having spent time, money and hard work improving the overall security of your home, don’t undo it all by being careless. Make sure you keep doors and windows locked because it only takes a few seconds for an opportunist criminal to be in and out of a property with potentially thousands of pounds of belongings. It might also be an idea to get timer switches for lamps to make it appear like there is somebody at home when you’re actually out for a night or longer.
Keep valuables out of Sight
This follows on from the last point and it’s crucial for common sense to come to the fore. Just as you would if you were leaving your car for any length of time, hide your valuables and keep them out of sight. If you own a lot of expensive jewelry or items of high sentimental value then it might be an idea to buy a safe and keep them locked away.
Raise your excess
If you can afford it, raising your excess – or deductibles as they are also known – will save money in the long run on your premiums. However, it’s a risky approach to take as it’ll mean you have to pay more in the event of having to make a claim, but you could view it as a gamble worth taking.
Make a bumper policy
There could be a significant amount of money to be saved by combining multiple policies with the same company. Car owners should talk to their current insurers to see if this is possible. You may just be surprised by the results.
You may have earned interests from your excess cash deposited in a savings account. But is that income tax-free? No, under normal saving schemes and taxation principles you can’t put tax-deductible money in an account. Means you still have to pay tax on your savings as it is your income earned. Check out for Cash Converters Log Book Loans available in UK to ease the process
Moreover, if your savings are being used for further investment it is not tax-free. Sometimes you may need to pay tax during withdrawal as well.
On the whole, your net income is not attractive although you have made so much of effort.
Here comes the importance of the unique saving idea through ISA (Individual savings account). It keeps your saving completely tax exempted with a bunch of other facilities.