What rich people don’t want you to know about money

 if you ever had the thought or  impression that there must be some  secret insider knowledge about making  money that only rich people know this is  probably because there is  the richest one percent of people now  hold more than 40 of the world's wealth  and this is not by luck or chance after  all the rich don't believe in that  but even though the chances of an  average joe becoming a billionaire are  slim we can still manage our money like  one  the truth is it usually comes down to  two principles 

 drive and smart financial planning  so here are secrets rich people don't  want you to know about money but we're  going to share them with you anyway  so grab a pen and paper and be ready to  take down notes because these principles  can get you closer to achieving your big  goals  before we get into the video welcome to  practical wisdom and on this channel  i'll share with you knowledge and  information to help you take your  financial game to the next level  so give this video a thumbs up for that  youtube algorithm and subscribe if  you're new  now let's begin shall we  principle number one your money should  be working for you not the other way  around  conventional wisdom says that you must  get a job and work hard to build wealth  there's truth in that but if your only  means of income involves trading time  for money then your income potential is  limited by the number of hours you work  in a week  the wealthy know that making money  doesn't always require hard work and  th

 

ey take every opportunity to generate  new sources of passive income  passive income can come from several  sources including rental properties  royalties on creative works or investing  you don't need a lot of money to start  investing but it's important to keep  your portfolio diversified so you don't  expose yourself to too much risk  don't try to time the market by selling  when you think it's at a peak or buying  when you think it's at rock bottom  that approach is almost guaranteed to  lose you money you're better off buying  quality investments and holding them for  the long term  it's important to understand the costs  associated with all of your passive  income streams for example if you run  several rental properties there may be  maintenance costs sitting into your  profit  similarly when you invest there may be  costs associated with your investment  products like fees for each trade or  expense ratios on mutual funds  try to keep these low to help maximize  your profits  index funds are a great choice for  investors who want a cheap way to  diversify their portfolios and earn  substantial returns  principle number two don't waste money  to impress others  contrary to popular belief most rich  people don't spend their

 time and money  trying to impress others  riches and wealth is not a race  they know their value and most don't see  the need to show financial dominance in  fact many wealthy individuals wouldn't  have become rich if they had spent their  hard-earned money buying things to keep  up with the likes of john down the  street who lives in a big house and just  bought a brand new sports car  authors thomas stanley and william danko  also agreed to this statement in their  1996 bestseller the millionaire next  door the surprising secrets of america's  wealthy  in the book he mentioned that a couple  of key secrets of the country's richest  people are living below their means and  rejecting big spending lifestyles  spending money to appear rich before you  actually are rich is a surefire way to  sabotage your wealth building goals  so forget about the instagram  millionaires and focus on what matters  accumulating wealth in the coming years  principle number three  it's best not to go it alone  wealthy people don't always know the  most about finances or investing but  they do understand the value of expert  advice from a professional  while some people might shun away the  cost of hiring a financial advisor to  manage their money the wealthy  understand that with an advisor's help  their money could grow faster than it  would if they were managing it on their  own  a financial advisor may be able to  suggest investments and strategies that  you hadn't considered to achieve your  financial goals more quickly it's  crucial that you choose a fee-only  advisor though unlike fee-based advisors  fee-only advisors don't earn com

missions  on the investment products they sell to  you so you don't have to worry

 about any  potential conflicts of interest  you see wealth rarely comes overnight  but by being responsible with your money  and seeking out new and greater sources  of income and asking for help when you  need it you can steadily grow your net  worth over time  principle number four  have plenty of liquidity the rich make  sure they have sufficient liquidity or  cash to cover their short-term needs  they maintain an emergency fund so they  don't have to disrupt their life for an  unexpected occurrence the fact that rich  people have money set aside for a rainy  day isn't solely a function of their  wealth they have cash reserves because  they're disciplined enough to stave  everyone should aim to build an  emergency fund with enough cash to cover  six to nine months worth of expenses  however you don't have to set that much  aside all at once  you just need to be working toward that  goal with every paycheck  with 

 

that in mind arrange to have a set  amount automatically transferred from  your checking account to savings each  month  it should be a target that you set your  mind to every month and one that isn't  too easy nor too hard  principle number five you can buy an  apartment building even if you're not  rich  so let me teach you how  you see historically real estate  investing offers the best long-term  returns a real-life proof of this is  rockefeller ring a bell  there are companies and investment  companies that help you in making  long-term investments in apartments and  office buildings all over the country  although you will not fully own the  property you have the opportunity to  have a stake in the action the beauty of  this is that you don't have to be a  millionaire all you need is 500 to get  you started these are companies like  diversifund and such companies have  helped rich people continue to own their  share of the real estate pie without  having to strain their pockets  when start

ing out do consider such  options because such companies know how  to ride out the market's ups and downs  they've historically seen annual returns  of 17 to 18 percent  as a partial owner you make money on  rent payments and when property values  go up  principle number six avoid fees at all  costs  fees can easily get out of hand and eat  away your wealth whether it's a late fee  on a credit payment a foreign  transaction fee from using a debit card  abroad or an overdraft fee on your  checking account it's important to avoid  incurring unnecessary fees as stingy as  it may sound the rich know how much of a  pest these fees can be  they understand that every fee they pay  means less money in their pockets so  they try to avoid them at all costs  principle number seven time is your most  valuable currency  when it comes to investing your most  valuable asset without a doubt is time  trading time for money is a loser's game  especially as technology makes redundant  many jobs that don't require a highly  skilled human being for this principle  you need to throw away any teaching  you've heard about working for long  hours and paying for money if you truly  explore this avenue you will find that  hard labor is taxing yet the returns  aren't substantial enough  compare someone who works at a mine  digging the earth all day while someone  who works at wall street only invests an  hour or two yet making great returns  also in another perspective if you  choose to invest your money today slowly  but surely you will end up building your  portfolio and before you know it that  five hundred dollars will grow to one  thousand two hundred dollars by the end  of the year  principle number eight growing money  non-wealthy people think you get wealthy  by finding the quote-unquote hot stock  but rich people understand the key to  building wealth is compounding  this means you can build wealth by  watching your money grow year on year  a good example is by using

 your  employer-based retirement plan and then  supplementing it with an individual  retirement account ira the best option  in both cases is a target date  retirement fund long-term investments  that are pegged to a future retirement  date the holy grail is index funds as  opp

sed to actively managed funds where  the advisor is trying to beat the market  you can test the waters with money that  you're comfortable losing whether that's  a hundred dollars or a thousand dollars  principle number nine don't quit until  you get the deal know your worth and  stick by it do not sell yourself short  ensure you get the best because you  deserve the best most people are  comfortable taking the l's because  they're used to it but the rich will  always stand their ground and claim  compensation  for example do not stick around with a  computer that broke down on you simply  because you initially bought it at a  discount the repair costs may require  more than the purchase cost as long as  you haven't broken any rules you're  entitled to a refund or full repair  principle number 10 asset location is as  important as asset allocation  if you've read anything about investing  and saving for retirement you've likely  encountered advice about asset  allocation it means having the right mix  of investments rather than putting all  of your money in just one asset however  the rich know that asset location is  just as important as asset allocation in  other words the rich don't keep all  their assets in one type of account such  as a tax deferred retirement savings  account instead they spread it around  wealthy people also have investments in  brokerage accounts to limit the impact  of taxes in retirement  principle number 11 salary isn't the  whole story climbing the corporate  ladder will only get you so far at some  point you reach your earning potential  in plateau the rich know that in ord

er  to grow wealth it's important to make  your money work hard for you not the  other way around  in fact robert kiyosaki author of the  number one best-selling personal finance  book rich dad poor dad built his entire  money philosophy around this concept  generating income from passive rather  than active income sources is the best  way to do this  investments that yield passive income  include dividend-paying securities  rental properties profits from a  business you do not directly manage on a  daily basis and royalties on creative  worker inventions  principle number 12 savings if you're  already vigilant about tracking your  finances whether it's your bank account  or your 401k you're already on the right  path  some of the most valuable money you can  save is the money you earn in your 20s  and 30s it's recommended to have a  weekly money day  people whose net worth is somewhere in  the range of 10 million dollars are  often the most unassuming and don't feel  the need to keep up with the joneses the  ability to live beneath your means  rather than look wealthy is crucial if  you're angling to become a millionaire  look at it this way you can make a  million dollars but if you spend 1.2  million you're in no better shape than  someone who makes forty thousand dollars  and spends forty two thousand another  characteristic of people who are likely  to build wealth more successfully is a  willingness to self-educate even just at  a basic level  even people with money pay attention to  the minor tweaks that can save them some  extra bucks principle number 13  understand value over cost  while it's common for middle-income  households to cut corners in order to  save money they ultimately find the  results are lacking there's no need to  compromise on value the rich know this  the wealthy look at value over co

st but  they're still prudent in their decisions  they keep close people that will help  them maximize their wealth especially  over multiple generations and they're  not afraid to spend money upfront for  

council to get these answers  these people can be their attorney  accountant or advisor  principle number 14 use other people's  money to the average person the old saw  that it takes money to make money might  sound like a tired cliche used to  justify irrational spending for the  wealthy however it's a golden rule the  key is leveraging other people's money  to increase your own wealth as mentioned  earlier trading time for money is a  loser's game especially as technology  destroys many jobs that don't require a  highly skilled human being however using  money from banks or invest

ors and hiring  people to work for you is a time-tested  formula for building wealth not to  mention the tax laws which heavily favor  businesses  whether you're fundraising to start a  business or flipping real estate for a  profit relying on other people's money  to do the heavy lifting greatly  increases the return of course it's also  riskier than relying on your own funds  but as legendary investor warren buffett  once put it risk comes from no

t knowing  what you're doing  and finally principle number 15 don't  pay with credit cards  credit cards are a great way to build  your credit score however if you want to  be wealthy it's important to never live  above your means one way to ensure that  is to only spend money yo

u actually have  rather than charging purchases on a  credit card and getting stuck in a cycle  of high interest payments simply put if  you use a credit card you don't want to  be rich well there you h

ave it guys