There are several steps, mindset adjustments about money, and sacrifices that you must undertake to become a rich person.
For one thing, you need to get out of debt. Rich people don’t carry debt to become financially liberated. Pay off all of your debts in a structured and financially responsible manner.
Save money. And it doesn’t matter how much money you per month as it does to keep up with the practice and mindset. Money is a tool that must be leveraged to offer you more options in life. Broke people have few to nil options in life.
Start a business based on existing or soon to be acquired skills. Study local business markets and start a business that serves a demographic with a demand.
And make smart and shrewd investments designed to pay off in the long term.
This is the basic synopsis and crash course to becoming financially independent. There is no one general path to financial independence. Everyone finds their own path to becoming rich, and the luckiest among us are born rich.
I sincerely recommend that you read “The Millionaire Next Door,” to learn more about achieving financial independence. The book was written in the 1980s and is the result of the authors interviewing hundreds of millionaires about their financial philosophies.
Additionally, I have written many articles about strategies to become wealthy, so please click on my name to view these articles.
Still, if you want to know how to get rich, it could be helpful to also know how to stay rich.
Here are four ways that the rich stay rich.
No New Friends Policy
It may seem like snobbish behavior, and maybe it is, but the rich expose themselves to scams and lawsuits whenever they make new friends.
Over 80% of wealthy people are afraid their wealth makes them the targets of frivolous lawsuits.
Look at it this way – as a working-class person, do you know who your friends really are? Are they the people who socialize with you no matter how much money you have?
Or the Fairweather friends who instantaneously teleport nearby whenever you have a windfall or get paid? Are your true friends the ones who duck your calls when your paycheck runs out and become available when you get paid again?
The problem is worse for the rich. You don’t have to feel sorry for them, but you should appreciate that if you become rich everyone you ever knew in life would contact you soon after.
You would need to vet such people heavily or decide how new people in your life become friends.
They Manage Taxes Shrewdly
If there is one expense that rich people willingly pay a lot of money for, it is for legal retention and advice.
You may have read how billionaires like Jeff Bezos, Elon Musk, and Mark Zuckerberg pay nothing in taxes. Well, they are in a tax bracket where they can pay tax lawyers to find every tax loophole that benefits them.
You are not going to get away with their shenanigans, but as a millionaire, you can mitigate your tax obligations with the right lawyer.
Wealthy people have diversified investment portfolios. And they distribute these portfolios across various tax-free and tax-deferred accounts. Many get their lawyers and accounts to put their money in overseas tax havens.
The point is that after becoming rich, you must retain a legitimate tax attorney and accountants who will help you mitigate your tax liabilities. Whether this is right or wrong is another matter, because when the rich do it, it’s legal.
Have Several Sources of Income
It is very difficult to get rich off of one idea and one revenue source.
The rich usually have several incoming revenue streams. So, if one is disrupted or ends, you have several others to leverage while getting time to create new ones.
They Never Believe in Get-Rich-Quick Schemes
The rich always take a “slow-and-steady-wins-the-race” approach to wealth generation. They make wise investments, generate and maintain several income streams, and hold diverse portfolios.
The Walton family owns the Walmart franchise and is worth over $247 billion. And there are almost 11,500 Walmart stores in the world.
But you must remember that the first Walmart opened in 1962. The Walmart empire didn’t appear overnight.
And the Waltons operate several other businesses. The Waltons own over 16 Arvest Banks in Arkansas alone.
You won’t become rich overnight via a get-rich-quick scheme. And the first thing you must remember about being rich is that you must adjust your mindset about making, money to keep it.
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Allen Francis was an academic advisor, librarian, and college adjunct for many years with no money, no financial literacy, and no responsibility when he had money. To him, the phrase “personal finance,” contains the power that anyone has to grow their own wealth. Allen is an advocate of best personal financial practices including focusing on your needs instead of your wants, asking for help when you need it, saving and investing in your own small business.