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What are 10 Secrets of the Wealthy and How Can I Use Them?

Category: Financial Planning

Have you ever thought about a special formula that wealthy people follow? You’re not alone!

Many believe they have secret knowledge. Wealthy individuals usually follow a few practical habits that anyone can adopt. If you want to start building genuine, lasting wealth, keep reading.

They Focus on Equity

Many people believe that a high salary is the key to becoming wealthy. While a good income is helpful, true wealth comes from ownership.

Whether owning a business, shares in a company, or property, those who become wealthy usually have ownership beyond just a paycheck. Studies from “The Millionaire Next Door” by Dr. Thomas J. Stanley and Dr. William D. Danko show that 60% of millionaires are self-employed business owners, an important lesson for those looking to build real wealth.

Here’s how you can apply this:

  • Start a business you’re passionate about.
  • Look for job opportunities that offer stock options or equity bonuses.
  • Invest in assets you own in whole or in part (like property or a business).

2. They Own Property

Your home may not always be the best investment financially, especially if it doesn’t generate income. However, many wealthy people still invest in property to build wealth.

For example, rental properties can be a great way to diversify your investments if the rental income covers the mortgage and other expenses. The goal is for the property to pay for itself and help reduce your mortgage through tenant payments.

Here’s how to get started:

  • Research areas with high rental demand.
  • Calculate to ensure rent covers mortgage and expenses.
  • Consider hiring a letting agent or property manager if you’re short on time.

3. They Rarely Sell Investments

Many people make the mistake of selling their investments in a panic when the market drops or cashing out for a big purchase. In contrast, wealthy individuals usually think long-term. They let their investments grow over time—sometimes for many years.

When the market fluctuates (which it always does), they stick to their plan rather than making hasty decisions. This showcases the power of compounding: the longer you keep your money invested, the more it can increase.

Here’s how to apply this:

  • Invest in a mix of assets (like stocks & shares, bonds, and index funds) that you’re comfortable holding for a long time.
  • Avoid trying to predict the market and stay calm.
  • View your investments as long-term commitments stretching over decades.

4. They Focus on Investing Over Saving

Savings accounts are helpful for emergencies or short-term needs. However, if you want your money to grow, you need to invest. Wealthy people understand that saving is safe, but it won’t always keep up with inflation or help you live the life you want in the future.

How to apply this:

  • Keep a small emergency fund in a savings account that you can easily access.
  • Focus on investing for retirement, property, or long-term goals.
  • If you have extra money, invest some of it instead of letting it sit in a low-interest account.

5. They Focus on Long-Term Wealth

Get-rich-quick schemes can be appealing, but truly wealthy people know that real wealth takes time to build. They research their options thoroughly and stay patient. By avoiding hasty choices and offers that seem too good to be true, they safeguard their money and allow their steady investments to grow.

How to apply this:

  • Be cautious of anything that claims to offer significant returns too quickly.
  • Cultivate patience as part of your investment plan.
  • Keep learning about different investment options to recognise good and bad choices.

6. They Know What They Like and Spend Accordingly

Many picture wealthy individuals spending lavishly on champagne and private jets daily. However, often, they choose to avoid unnecessary expenses and instead focus on experiences or items that truly make them happy.

The key is identifying what brings you joy and prioritising those areas while minimising spending on less critical areas.

Here’s how to do this:

  • Think about what adds real value to your life (like family trips, hobbies, or giving to charity).
  • Spend wisely on these things and avoid the temptation to buy flashy, meaningless items.
  • Regularly check your spending habits to ensure they align with your long-term goals.

7. They Lean on Experts

Wealthy individuals understand that they can’t know everything. They hire experts such as financial advisers, tax specialists, business coaches, and lawyers to avoid mistakes.

Getting expert advice can be more cost-effective in the long run, especially when compared to the potential losses from poor decisions.

Here’s how to do this:

  • Get professional advice for complicated financial matters, especially taxes, pensions, and estate planning.
  • Invest in courses or coaching to develop skills to increase earnings.
  • Work with trusted experts to save time, allowing you to focus on your strengths.

8. They Understand the Value of a Network

You’ve probably heard the saying, “It’s not just what you know, but who you know.” This is especially true in business and building wealth. Wealthy people create strong networks that help them find new partnerships, job opportunities, and mentors.

Here’s how you can make it work for you:

  • Attend local business events, seminars, or webinars to meet others with similar interests.
  • Use social media, especially LinkedIn, to make real connections.
  • Don’t hesitate to contact people you admire. Asking polite, thoughtful questions can help you build relationships.

9. They Use ‘Good’ Debt Wisely

Debt is often seen as a negative in personal finance, but not all debt is bad. “Good” debt is low-interest borrowing, like mortgages, that can help you make money or increase in value. In contrast, “bad” debt includes high-interest credit cards and car loans that cost you more over time.

How to use this information:

  • Before taking on debt, ask yourself if it will increase your wealth (like a mortgage for investment property).
  • Avoid high-interest debt for things you don’t need.
  • Understand the terms and risks of any debt you consider getting.

10. They Have (and Regularly Update) a Plan

Wealthy people understand the importance of having a clear plan. They set specific short-, medium–, and long-term financial goals and take action to achieve them. They also adjust their plans as life changes, keeping them focused on managing their time and money.

Here’s how you can do it:

  • Create a financial plan showing your current situation and goals for the next 5, 10, or 20 years.
  • Review your plan regularly, at least once a year or after significant life events like a new job or having a child.
  • Make small changes, but stay focused on your overall goals.

Building wealth isn’t about luck; it requires consistently following simple principles. Discipline and patience are key. Focus on owning assets, prioritising investing, avoiding bad debt, seeking expert advice, and committing to a long-term plan to get ahead. Remember: real wealth builds gradually; now is the best time to start. Choose one of these 10 habits to enhance your financial life today. If needed, contact a qualified adviser for personalised planning.

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