It can be said that almost no one in today's world does not want to be rich, but the end result is that there are always more poor people than rich people. There must be some differences between the poor and the rich, otherwise it would be impossible to explain why some people become rich while others work hard all their lives and still live in poverty. People don't have to be lucky, work extremely hard, or even have a college degree to become rich. It can be seen from the path taken by the rich that if a person wants to become rich or achieve success, the most important thing is to have a wise mind. A wise mind will make people form good habits, and this good habit will Leading to financial abundance, enabling people to live the lifestyle they like. Of course, the rich people we are talking about are not the world's top rich people like Bill Gates. If a family net worth of US$1 million can be considered a rich person in the United States, this should be a promising prospect for many people. An attainable goal.
David King, a well-known American financial management expert, believes that there are two huge differences in financial management between rich and poor people, which will have a profound impact on whether people can become rich. First, how to manage money. Rich people manage their money based on effectiveness. The rich have an obvious similarity in financial management, that is, consumption cannot exceed income, and the money saved must be used for investment. If a person can manage his money effectively, save reasonably and invest effectively, his wealth will increase little by little, and people who are good at managing money will naturally be richer than people who are not good at managing money.
Second, poor people mainly make money for consumption, while rich people mostly make money for investment. Rich people use their money as capital and invest it in value-added projects, such as real estate, gold, or other valuable assets. The poor regard money as a means of consumption, and they often spend money on depreciating items, such as cars and televisions.
From an economic point of view, the biggest difference between the rich and the poor is that they are much richer than the poor. When asked about their secrets to wealth, their answers were simple. They mostly included long-term smart investment, hard work and frugality. The American media once compiled the top ten secrets of wealthy people's financial management based on the success stories of some millionaires. Although these secrets may not seem surprising, the profound truths contained in them are worthy of people's consideration.
Tip 1: Develop good habits early
"Earn 7 million in 7 years" blogger Carter Wood worked hard while setting up his own portal in the technology industry Save money and live frugally. The 49-year-old said that many people rely too much on credit card borrowing when they are young. As a result, borrowing consumes their savings and they never save money. He believes that if people want to live a prosperous life, they should not buy whatever they want when they are young and let themselves be controlled by the satisfaction of material desires. When you are young, if you can develop good financial management habits early, the money you earn will stay in your pocket, and you will truly become a millionaire.
Secret 2: Have confidence in yourself
Corey, the author of the book "Make 1 Million Before the Age of 30", when he was young, almost all the millionaires he could find on the market were I read all the biographies and autobiographies, and was inspired to start investing in real estate. As a result, I became a millionaire before I was 30 years old. Corey said that he used reading to find the common characteristics of these rich people's career success, which can help him choose the path to wealth that best suits him. In the end, he discovered that almost all rich people have one common characteristic, that is, they have incomparable self-confidence and believe that they can definitely achieve great financial success. This discovery really helped him, allowing him to realize his dream of becoming a millionaire at a young age.
Tip 3: List specific details for your dream
Smith, the blog columnist of "The Rich Man Next Door", believes that if you want to become a rich man, you must have such a dream. Without such a dream, the dream of being rich would really become a dream. But just saying "I want to be rich" is empty. It's better to concretely imagine what life will be like when you are a millionaire.
For example, "You need to have 2 million yuan to invest, and then you can live a good life just on the income from the investment. In this way, you can quit your job, do volunteer work, travel, learn to play tennis and paint, and have a picnic on the beach with your family." ". Smith's dream of being a rich man is to be completely financially independent before having children, and to live a good life without having to work. Smith cut out pictures from magazines of the places she most wanted to go or the things she wanted to do most, and placed them in a prominent place in front of her desk to remind herself that she had to work hard to achieve her dreams. In the end, Smith did realize her dreams. A survey shows that although the United States has the largest number of millionaires in the world, most Americans have no desire to become rich and are satisfied with a well-off life. Therefore, some people in the United States could have the conditions to become rich but in the end they miss out. This has something to do with people's mentality.
Tip 4: Buy insurance to protect property
Many people go bankrupt because of divorce, death in the family, disability, illness, or family members being unable to work. Some people also go bankrupt. Because a guest fell down at a party at home, he had to pay a high compensation fee and half his life's hard work was wasted. Thinking about it conversely, buying insurance for these unpredictable accidents can protect your wealth. Wilt, the author of "Safe Millionaire" and a famous financial columnist, pointed out that many people do not buy enough insurance for what they need, or they buy insurance that they don't need. This is due to a lack of understanding of insurance and its role. In the United States, if you buy a house with a high housing price, the insurance company will recommend that the owner buy a million-dollar umbrella insurance for the property. The biggest advantage of this kind of insurance is that if an outsider has an accident in the owner's private residence, the insurance company can bear the relevant liability. Compensation costs. Some cases in the United States show that even if it is a gathering of friends or a party, the homeowner is legally responsible for all guests. If there is a fall or collision that causes personal injury, the homeowner needs to compensate.
Tip 5: Work hard
Many people think that the reason why rich people are rich is mostly due to good luck. But billionaire Trump believes in his new book "Think Like Trump" that his success is not due to luck. Trump believes that the most basic reason for his success is nothing else but hard work. He said that hard work will bring good luck, because hard work will most likely lead to success, and then people think that good luck brings success. Even so, it's because you are lucky enough and smart enough to know how to work hard. The same concept was promoted by Benjamin Frankling in the 18th century. He once said, The harder I work, the better my luck.
Tip 6: Practice budgeting
Smith herself keeps accounts every month, and she also recommends that people practice doing this and list out the details of their money every month. In addition, she also believes that maintaining a good credit score is also helpful for becoming a millionaire, because a good credit score can save yourself money in many ways, and the money saved in a lifetime can reach tens of thousands of dollars.
Tip 7: Follow your heart
Working in finance may bring you a high salary, but if you don’t like it, it may not bring you a great sense of accomplishment. So Corey advises people to do what they want to do. Take a look at what kind of books, magazines or information you like to spend most time reading after get off work. That may be something you are truly passionate about, and it is worth considering entering a related career. For example, if you like reading fashion magazines very much, engaging in fashion-related work may bring you development opportunities. Sometimes a career may not be very attractive even if the salary is high, but as long as you really like it, you are very likely to have extraordinary performance and become a master.
Tip 8: Decide how much money you need
Most people only say they want to be a millionaire, but for many people, $1 million is not enough. Especially for young people under the age of 40, with inflation, by the time they are 65, 1 million yuan will not be enough to live a comfortable life.
Therefore, it is best to first make your ideas concrete, including what kind of house you want to live in, what kind of travel, how much mortgage you want to pay, what kind of university your children will go to, etc., and sum up a number, which will help you better. Reach the goal. What we are talking about here is actually setting financial goals, and then breaking down the goals that you pursue and want to achieve in your life, and gradually make your dreams come true. In real life, many people lack a financial stability plan or goal in life. They often live one day at a time, having a house to live in and three meals a day is enough to live.
Tip 9: Contrarian Investing
Corey recommends going against the majority of people when it comes to investing. If the stock price falls miserably now, many people will try their best to sell. If they dare to take advantage of the dip, there may be a bumper harvest in a year and a half. This kind of investment method is not limited to the stock market. The same principle applies to real estate investment. If you have the courage to buy a foreclosed home at a low price and sublet it, you may have great returns in the future. Corey is talking about an investment strategy, and for many people, the key is to develop a mindset about investing. Chinese people have the concept of saving, but the concept of investment is still being fully formed. Investment does not necessarily mean investing in real estate or stocks and securities. Retirement funds, etc. are also a good investment direction. Financial experts in the United States often recommend that people invest a certain percentage of their income in retirement funds from the beginning of their work. After working for 40 years until retirement, the amount of effectively managed retirement funds can be more than US$1 million.
Tip 10: Live within your means
Even big stars like Eminem will be careful about their budget and don’t want to spend money indiscriminately. Once Eminem saw a watch he liked very much and it was worth $15,000. He wanted to buy it. But he later thought that he should keep the money because he didn't want to run out of money, but wanted to have money to send his daughter to college. Many big stars ended up in debt just because they didn't have this idea. Millionaire Smith said that her financial management experience is not to spend all the money you earn every month just to follow the trend, but to find ways to save 10 to 25% of your income. To do this, don't follow the trend and don't buy those so-called items that symbolize status, such as fashionable sports cars, luxurious manors, and you don't need to buy too many brand-name bags, shoes, and clothing. Share it!