15 Secrets That Alan Musk And All Other Rich People Know

1. The expenditure must be consistent with the target

Michael K., chairman of Financial Life Focus and author of the Feelrich Project, said: “One of the keys to becoming rich is purposeful.”

“[The rich] know what they are worried about,” he said. “It may be to leave wealth to the next generation, or it may be to pursue a special lifestyle. They should be careful not to waste resources on worthless things.”

According to Kay, rich people tend to spend their money only on things they care about. The rest of us can set our own goals and then monitor our spending to see if it meets these goals and learn from them.

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Don’t waste money to impress others

“Most rich people don’t spend time and money to impress others,” Kay said “They didn’t participate in the competition. They knew they were successful, so they didn’t focus on other people’s ideas.” He added, “In fact, many rich people spend their hard earned money to buy things. They won’t get rich if they follow others.”

Writers Thomas Stanley and William Danko also wrote in their best-selling book The Millionaire Next Door: the Surprising Secrets of America ‘s Wealth in 1996 that the secret below the two core living standards of the richest people in the United States is to refuse big money.

Spending money to make yourself look rich before you are really rich will certainly destroy your wealth accumulation goal. So forget about the Jones family and concentrate on the important thing of accumulating wealth in the next few years.

3. Sufficient liquidity

The rich ensure sufficient liquidity or cash to meet short-term needs. Kay said: They said, “They don’t need accidents to disrupt their lives.”

The rich set aside money for a rainy day. This is not just their wealth function. They have enough savings discipline, so they have cash reserves.

Kay said that everyone should be committed to establishing an emergency fund with enough cash to pay for 6-9 months. But you don’t have to put so much money aside at once. You only need to use a penny of salary to work towards this goal. With this in mind, a fixed amount is automatically transferred from your checking account to your savings account each month.

Kay said, “Like anything else, this is the goal.” If you don’t work hard, it will only make you fail.

4. Make your money more suitable for you

Avoid expenses at all costs

Costs easily devour your property. The late fee paid by credit card or the foreign transaction fee or check account overdraft fee for using debit card abroad should avoid unnecessary expenses.

Taylor Schulte, CEO of Define Financial in San Diego, said: “The rich know that they have less money in their pockets for all the expenses they pay.”

Understand the investment costs paid

The rich also care about investment costs, which is ignored by many people. For example, according to the research of the National Association of Retirement Plan Participants, we do not know that more than half of the employees pay for their retirement savings accounts.

But Schulte said that this expense will erode your compensation. “The more mutual fund fees or transaction fees you pay, the less money you have in your pocket.”

Even a small cost will have a great impact. According to the Office of Investor Education and Advocacy of the Securities and Exchange Commission, an investment of $100000 and an annual membership fee of 1% will be paid within 20 years, which is about $30000 less than the 0.25% annual membership fee.

Please check your account statement to find out the fees you paid. If the SEC looks high, we suggest you ask if you can reduce costs. You should also look around for lower cost accounts and investment companies. This will help you save the money you saved by working harder.

5. Asset positioning is as important as asset allocation

If you have read a book on retirement investment and savings, you can get advice on asset allocation. This means having the right product portfolio, rather than putting all your money in one asset. But Schulte said: “The rich know that asset positioning and asset allocation are equally important.”

In other words, the rich will not deposit all their assets(such as Li Yanshi’s retirement savings account) into one account. Instead, they spread it. Schulte said that the rich also invested in intermediary accounts in order to limit the impact of taxes on retirement.

Make your money more suitable for you

6. Correct selection of retirement savings account

You can get tax benefits through grants to the 401k or the Plan to Control the Barbarians. Because the bonus is deducted from your pre tax salary. This reduces your taxable income, which defers taxes. But when you withdraw this money when you retire, it will be taxed according to your normal income tax rate, which is currently 37% for the richest taxpayer.

Investment in stocks, bonds or mutual funds through intermediary accounts will not receive any tax relief. But if you hold such investments for more than one year, they will be taxed according to the long-term return on capital, ranging from 0% to 20%, but the maximum tax rate for most taxpayers is 15%.

Schulte said that the type of investment in your account will have a great impact on your long-term earnings. Generally speaking, it is better to keep bonds, mutual funds, dividend payment stocks and other securities in the tax transfer retirement savings account. Then deposit your private shares in an intermediary account.

7. Annual tax plan is important

Kay said that the rich will not consider tax returns until April. They took measures to mitigate the tax impact throughout the year. With the help of tax experts, the rich also avoided costly tax mistakes.

If you have resources, please consult your financial or tax advisor regularly throughout the year. Please always check the latest information that may affect your tax payment, and keep records or receipts to obtain various tax deductions.

8. Donate to charity

Rich people know that giving to charities is not only good for the world, but also good for their financial situation. If you list your tax returns by project instead of the standard commission, you can deduct charitable donations to eligible organizations. The more you deduct, the less your taxable income.

“Charitable donations are a good tool to reduce tax consequences,” Schulte said The rich know this. You don’t have to be rich to do it.

Whether you write a check to your favorite charity or donate clothes you no longer wear to the charity, you should stick to your receipt and apply for charitable deduction.

Schulte said, or through the establishment of a fund suggested by donors, more strategic donation. These simple and cheap funds can be obtained through investment companies, and you can get tax relief when you leave the funds in your account. Then you can pay the subsidy according to your schedule.

Make your money more suitable for you

9. It’s important to hire consultants

Rich people are surrounded by knowledgeable tax, legal and financial experts. Don’t think that in order to increase the probability of accumulating wealth, consultants should be rich. On the contrary, the investment support system can help you realize the wealth you need now.

Kay said, “If you continue to take money as the reason why you can’t get on the right track, you will continue to make the same mistake.”

10. But please choose your consultant carefully

Don’t hire junior consultants to save money. Kay suggests hiring the best person you can do. That way you can hear bad advice without wasting your money on NAPFA. You can find a fee based financial planner on org(the website of the American Association of Personal Financial Advisers).

Research consultants are important before hiring consultants. This can reduce the chance of loss due to lack of experience, poor judgment or moral taste of others.

11. Wages are not all

Climbing the company stairs will only get you here. At some point, you will reach your income potential and stable period. The rich know that in order to increase their wealth, it is important to let your money work hard for you. It is not the reverse. In fact, Robert Kiyosaki is the best-selling writer of the personal financial book Rich Dad, Poor Dad. His entire financial philosophy is built around this concept.

The best way to achieve this goal is to obtain income from passive income sources rather than from active income sources. Investments that generate passive income include securities that pay dividends, leased real estate, business profits that you do not directly manage on a daily basis, and royalties on creative businesses or inventions.

12. Use time instead of opportunity

No one can predict what will happen to the stock market tomorrow. When the rich know this, they will not try the traders of the day.

Plancorp, Peter Lazaroff, LLC’s registered financial planner, said: “The time of successful investment is more important than time. Most people believe that the time to grasp the market trend is the key to getting rich through the stock market. But the rich know that time and compound income are the most important factors for wealth growth.” express:

although this seems contrary to common sense, to become rich, investors must adopt buy and hold strategies that prevent market fluctuations and ignore the era error of speculation.

Make your money more suitable for you

Please write down

The difference between having an idea and writing it on paper is often the difference between super successful people and ordinary people. If success and wealth are treated equally, I think it is time to write down goals, no matter how big or small, in order to become rich.

Thomas Cowley is the author of Rich Habits: The Day Success Habits of Wealth Individuals. He points out that 67% of the rich people he surveyed wrote their goals and 81% maintained their work lists. If your goal is to become a multimillionaire, please attach an action plan to use it to achieve it.

14. Understand cost performance

“The rich man has three best friends, her lawyer, her accountant and her consultant,” said Justin Kumar, chief portfolio manager of Arlington Capital Management. “When considering how to maximize wealth, the rich tend to take advantage of laws and tax laws. Especially in several generations, they are not afraid to pay lawyers in advance to get such an answer.”

Kumar explained that it is common for middle-income Americans to steal jobs in order to save money, but the results were not enough. “The rich value value rather than cost, but they are still cautious in their decisions,” he said

15. Avoid eating out

People who are interested in saving money do not often drink daily lattes. The rich like to spend money anytime, anywhere, and save from a broader perspective.

The author Paul Sullivan and his colleague Brad Klontz, as clinical psychologists of Kansas State University, studied the consumption habits of the richest 1% and the richest 5%. 1% of people spend 30% less money on dining out, instead, they save it for retirement.

Sullivan wrote in the column of Fortune magazine: “Over time, it is more expensive than a Starbucks latte. This is the difference between the rich and others on the green line.”