Most wealthy people are born into affluence and are taught how to keep their assets growing. But what about the ordinary folks who build their prosperity themselves? What are their secrets? Lucky for our readers, we got to the bottom of it and boiled it down to 12 money secrets of wealthy families we should all steal — starting now. These tips and tricks might just be the thing that starts many healthy new money habits for families!
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I don't know about everyone else, but a few of these are lighting a bulb over my head. I actually do need to plan ahead better. I could save more if I just committed to it. I may not become enormously wealthy, but if I manage my money more carefully, I think I could create more abundance in my life and for my family. These don't seem like hard principles, but I could definitely use a refresher on some of the finer points of personal finance. We found advice from money experts who gave us some of the best money advice we've ever heard. I personally can't wait to start applying some of this information to my own financial habits. Read through this handy list of the best money secrets wealthy people already know!
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Think About Your Money & Future Every Day
"It's like when people diet," says Andrew Bauer, CEO of his family business, Royce Leather. "You can't just go on a diet for a while and expect those changes to stay permanent. You have to change your whole lifestyle." Your finances are the same way. "You need to create a healthy budget that keeps you focused on the future every day," he says.
Invest in What You Can Control First
This tip is especially for small business owners. "I came from one of the poorest financial districts in New Jersey," Bauer says. "But my family was able to succeed by investing our money in our business as opposed to investing our money in the marketplace."
This means Bauer and his family reinvested their profits back into the family business before putting anything into the stock market. It's an effective strategy because he has more control over and autonomy with his business. "I have more freedom to allocate our funds for the highest outcome, as opposed to the market where we have no control. You're better off investing in your family and personal gains first."
Focus on Your Goals Every Day
Thomas Corley, author of Rich Habits: The Daily Success Habits Of Wealthy Individuals, studied how rich and poor people live and discovered some major differences between the two. One is that wealthier people are more likely to set goals, put those goals in writing, and focus on those goals every day.
Watch Less TV
Wealthy people watch a lot less TV than the poor do — an hour or less a day, according to Corley. And only six percent watch reality TV. (The Real Housewives' peers aren't watching them, apparently.) "The common variable among the wealthy is how they make productive use of their time," Corley tells Business Insider. "They wealthy are not avoiding watching TV because they have some superior human discipline or willpower. They just don't think about watching much TV because they are engaged in some other habitual daily behavior — reading."
Wait for Sales
Wealthy people love a good bargain. Bauer says he waits for holiday and flash sales for two reasons: "You're not only getting a better deal, but you're making sure you really want that item." So no impulse buys: Make purchases slowly and deliberately.
Don't Let Your Money Manage You
Manage your money, don't let your money manage you. "Wealthy people pay attention to their money, while lower income people scramble last-minute with emergencies," says Nancy Gaines, founder of Women Gaining Wealth, a company that teaches women financial skills. She advises us to plan ahead well in advance for all our necessities and bills. "Every month, look at the expenses you have coming and decide how much money you have to work with."
For example, Gaines always refills her gas tank when it's about a quarter empty so she has time to find a station with the lowest prices. This is better than waiting until you're all out and having to fill up at the nearest station, no matter what the cost.
Another trick? Gaines had some tenants fall behind on the rent when they had to pay a ticket for being late on their car registration — an expense they could have avoided if they'd anticipated that registration fee, budgeted for it, and paid it on time.
Save 10 Percent No Matter What
"Most people can do that if they really try," Gaines says. Look to see where you can cut to make sure you save that 10 percent.
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Don't Raise Your Standard of Living After a Raise
"People will take their raise and buy a new car or a larger home," Gaines says, "and they'll never get ahead because they're just increasing their cost of living." You don't really need more stuff, according to Gaines. "Take your increase and save it instead," she suggests.
Get the Education You Need
This doesn't necessarily mean going back to college or taking a finance class. But adding to your knowledge can help you find ways to earn more money. "Learn how to trade in the stock market, learn how to sell real estate," says Gaines. "Invest in yourself and your personal development."
This doesn't even have to cost you money. It can be as simple as having coffee with an expert. Gaines recommends attending free meet-ups. Even your local bank provides free workshops and other educational personal finance programs.
Close Your Spending Leaks
Are you wasting money on "healthy" food you think you'll eat but don't because you just never get around to washing and chopping that head of lettuce? "Not paying your bills on time and having to pay a late fee, paying more for necessities you can buy for less at other stores — these little expenses are like a leaky faucet," Gaines says. "They seem small, but they all add up over time."
Make a To-Do List the Night Before
Corley says wealthy people make to-do lists, and they get them done. Entrepreneur and host of CNBC's The Profit Marcus Lemonis says he makes a to-do list every night before he goes to bed. Not only that, he tries to get everything done on that list before noon, because after noon "it's like the wild, wild west," he says. He has less control through the latter part of his day.
Make Friends With Other Successful People
One more tip from Corley: Wealthy people make friends with other success-minded people. Now don't go dumping your true-blue friends and start social climbing! Just think about building a relationship with someone whose goals you admire. Corley says as you invest in helping them reach their goals, they will eventually reciprocate in helping you reach your goals. You're creating a partner in financial success. You'll learn a lot from each other.
