Wealth. It's a loaded word, isn't it? For some, it represents the pinnacle of success. To others, it's a source of endless frustration. No matter where you stand on the issue, one thing is for sure: building wealth is easier said than done. Or is it?
Life would be a whole lot easier if someone would just wire us $10 million, but unfortunately the chance of that happening is, well, probably zero. Contrary to popular belief, becoming a millionaire actually doesn't require luck or privilege – it simply takes working smarter, dedication and perseverance.
Becoming a multi-millionaire is very possible even for the those not born into privilege. So read on – your future self will thank you!
Here are the 10 biggest money secrets most rich people won't tell you, so I will.
- Your salary alone won't make you rich – you must invest. Most millionaires didn't get rich by working for a salary all their lives. In fact, the majority of them became wealthy through investing! Whether it's buying stocks, real estate or mutual funds, investing is one of the smartest things you can do for your future.
- Inflation steals your wealth, so invest your money wisely, expecting to get rich off the 0.1% interest your bank gives you will not help you at all. Rich people know that inflation is one of the biggest threats to building wealth. That's why they invest their money in assets that will protect them from its effects. For example, real estate and gold are two investments that tend to hold their value during times of high inflation. Oh, and before you say "I don't have the money to invest", think about how much your last fancy meal cost, or that must-have brand name item that you bought. The point here is you don't need a lot of money to start investing.
- Understand which items are assets and which are liabilities. Your car and home are most likely not assets, they are liabilities. An asset is something that puts money in your pocket, while a liability is something that takes it out. Rich people know this simple distinction and they use it to their advantage. They invest in assets such as businesses, real estate and stocks. And they avoid liabilities such as cars, boats and expensive vacations, unless you paying for it with reward points, we'll get to that in point #5.
- Compound interest is the ultimate key. Einstein once said that compound interest is the "eighth wonder of the world." And he was right! Compound interest is what makes millionaires out of average people. It's simple – but it works! All you have to do is invest your money and let it grow over time. The more you invest, the more compound interest will work for you.
- Collect reward points when you spend. Millionaires know that every penny counts. That's why they take advantage of rewards programs whenever they can. Whether it's airline miles, hotel points or cash back, these programs can add up to big savings over time. Our family has not paid for a flight ticket in the past 10+ years. Our vacations and travel are all paid for with rewards points and this is not an exaggeration. When I left corporate life to pursue my dreams and passion, I had accumulated >3million frequent flyer miles. Even without a corporate card, you can use credit card reward points to your advantage. DM me if you want to know more.
- Create multiple sources of income. The richest people in the world understand that having multiple sources of income is key to building wealth. So get your side hustle on.
- You should compare your car and home Insurance every 6 months. Millionaires know that they can save a lot of money by comparing car and home insurance rates. In fact, many of them switch insurers every year in order to get the best deal on insurance.
- Never spend more than you make. This is one of the most important money secrets that rich people know. They live below their means and they are always mindful of their spending. They know that if they spend more than they make, they will never be able to build wealth. *There are exception to this rule, especially applicable to point 9.
- Learn how to spend other peoples money. Reading this statement, you might think I fell out of a tree and hit my head really hard. It is, in fact, what wealthy people have been doing all their lives. What most rich people won't tell you is that they know how to spend other peoples money. They know how to get other people to pay for their expenses. Whether it's through investments, loans or credit cards, they know how to use other people's money to their advantage and how to use other peoples money to make money. This topic is so broad that it needs to be discussed separately.
- Calculated risks are a must in order to achieve success. Millionaires know that taking risks is a necessary part of building wealth. You can't win when you are not in the game. They are not afraid to take calculated risks in order to achieve their goals. And they are always prepared for the worst-case scenario.
You don't need to be born into privilege to become a millionaire – you just need to be persistent and never give up on your dreams. Millionaires are persistent and always take action towards their goals!