How the Rich Invest their Money
Most people, if not all, invest for one reason: to make money, but investing may not be for everybody. I mean it is for everybody but not everybody who invests makes money out of it. Actually, most people fail to make money from their investments and sometimes lose everything.
It is a given fact that only a few people control the majority of wealth in any country around the world. Those are the super-rich or the wealthy individuals. So what are they doing that made them super rich? How do these rich people invest their money?
Most investors copy the investments of the super-rich when it comes to investment and money matters. The money guru of our time is Warren Buffet –which by the way is so generous in giving investing tips to everyone. Smart investors follow his advice. He is someone everyone can respect for following his own advice and is worth emulating.
So how did they really do it?
Here are some basic facts about the super-rich;
- Big fan of saving, less consumerism
- Own businesses that make money
- Learn continually, are teachable
- Work to improve their bottom line
- Talk more about ideas and are open-minded
- Seek guidance from the best, have a mentor
The rich became rich because they save more than they spend, they invest in themselves to hone their investment skills, and they love to work on ideas that may solve a problem. They always think and plan ahead. They know what they want and take action at each step to ensure success. They start with the end in mind.
Big Fan of Saving
Some people think that the rich spend money whenever and wherever they want. However, you might be surprised at how frugal most of the wealthiest people are. They are often looking for a great deal and they incorporate their frugal habits into their daily lives. They plan, organise, and make a list of their spending and stick to a budget. The secret to becoming Rich and even Richer is to keep your expenses lower than your income. Zero debt mentality.
It’s ironic that the people who spend extravagantly are those who have money, however, this is not wealth. It should be the wealthy since they have more liquid income to spend on anything. They choose to save and make smart investments. In short, that’s how they are Richer.
Own Businesses and more Investments
Investing in multiple businesses is a full-time occupation for investors, they invest in many and take the time out to make sure that the businesses’ investment grows by tackling any issues that come along.
Managing multiple businesses improves financial security; experience is key. It keeps your mind sharp since it demands you to use all your skills. This requires the right strategies to employ, specifically on time management so you can do multiple things and sustain them.
An important investment strategy that most wealthy investors adopt is diversification. Diversification ensures unwanted risk; “putting all your eggs in one basket”. It minimises risk if any of the businesses fail, the others in theory thrive.
Investment requires planning and a clear strategy to keep your money safe. Most investors have a financial planner who they consult along with industry titans who know their industries and can predict the trends in the market. Portfolios can be made risky by the same type of investments which may be highly rewarding however not sustainable. The new emerging investment type where investors are more in control is called the Decentralised autonomous organisation DAO. Is Ethereum Blockchain here to stay?
Learning, as they say, is a never-ending process and is very crucial for growth. People need to learn new knowledge or skills in order to see things in a new light and take that next leap. This gives people practice in adapting to change, enabling them to do so quickly and easily promoting lateral thinking and mental flexibility. Staying ahead of the curb is key when you want the rewards of wealth. The wealthy invest in learning and continuous improvement. They learn to succeed and improve. Or find someone who can help them. “Richard Branson” So why should you invest time in continuously learning?
Today, continuous learning forms a necessary part of acquiring critical thinking skills, discovering new ways of doing business, and relating to people from different cultures. The only thing that is constant is change, learning is how we grow and become better at helping others.
There are so many options today on how to learn and improve oneself. Reading is a key way and offers you time to reflect and learn at your own pace. Some notable super-rich people like Bill Gates and Warren Buffet are avid book readers. By creating this habit in their lives they are able to retire doing the things they love most. They invest time in themselves and learn continually. Make this principle one of your key behaviours.
Time is one of the most valuable assets so use it wisely. The wealthy place more value on their time so they work on something that produces higher returns.
- They put their assets to work and buy assets that appreciate in value over time.
- They do their homework.
- They plan first before they plunge into something.
- They read to learn.
The rich are getting richer because they ‘work more’ than the average person.
Love what they do and it won’t feel like work again. Work to them is like part of their DNA unplugged; they will slowly die. It keeps them alive. It’s not about the money, it’s how they choose to live.
Talk more about ideas
Ideas are very important. Without them, nothing happens. When you put your ideas to work, you can have the power to change the world.
Spending time on a business idea is very important to investors. Through ideas, they get to innovate and create businesses. Entrepreneurs create wealth by using this knowledge too.
Steve Jobs had a bright idea, which became a trillion-dollar company. Ultimately, a business idea is important and strong execution is equally important.
Seek guidance from the best
You are the sum of the five people in your circle. So make sure you include people that matter and make a difference in your business. It is not enough that Your own knowledge is not always enough. The most successful people have a mentor or expert to guide them. More often, they hire consultants that help them solve specific problems. This helps them provide leverage on time.
Wealthy people love to listen rather than speak. It is where they gain outside perspective and helps them discover other aspects of their struggle.
You may also have noticed that they have lots of connections. They connect with other wealthy people so they can exchange ideas and bounce ideas around their businesses. They have a network of trust and use this success to build on.
Your motivation is always your WHY and your journey is how you choose to live it. Getting the wealth you want requires time, patience, and hard work. Having a strategy that works, along with the effort required to sustain learning constantly where your appetite for knowledge is driving your passion to succeed, you may become wealthy. We hope the above has given you insight and food for thought.
Must-do to get better:
- You have to save more than what you spend.
- Own and invest in businesses and let your money work for you.
- Work more and sleep less.
- Talk more about ideas rather than anything else.
- Invest in yourself.
- Continuously learn.
- Always read and seek guidance from the best.