Always wanted to be stinking rich, but still cannot work out how to attain such affluence? Seems Liz Pulliam Weston from MSN Money has the top five answers to this age-old problem. Take a look, see if you can turn your life around with these few simple new year resolutions:
1. They give away more.
Although they have better accountants who help them to avoid paying too much tax, they readily give their money to charity-houses. One day the tax-office is going to work this out and rename itself.
While they only give away an average of 6%, this money helps support many local and international charities. With Bill and Melinda giving away money to their own personal charities, Paul Newman giving money to Ch7 to distribute and Tom Cruise giving his money to Scientology (which is the least charitable organisation on the planet) … and SWMBO giving her money away to Tupperware: We too should be multi-millionaires!
2. They are much more likely to own businesses.
If ownership were the only factor, then I have the makings of millionaire-status. Next.
3. They borrow strategically.
Not only do they limit their borrowings, they restrict the use of credit-cards – some don’t have a credit(/debit) card. What they have is mortgages, some with supplementary loans attached.
Yet again SWMBO and I meet a criteria. We both have one credit-card each. Everytime the bank sends a letter saying “Good for you, you haven’t overspent and you keep paying us back within thirty days. Here, let us increase your limit from $1,000 to $12,000“. I shred these letters. ‘Lead me not into temptation, for the banks have littered the way with gold-rating cards.’ I really cannot understand how anyone on a mediochre income can think a $11,000 credit-card is within their monthly-budget!
Although many wealthier folks can do and own their homes outright, financial planners say, many prefer to put their money to work for them in investments that can earn higher returns.
4. They don’t blow a lot of money on cars.
This is a broad statement that makes a lot of sense. What they are really saying is that the millionaires of the new millenia are not into flashing their money about. Just look at the uNOOB boys who have $1.6billion fresh greenbacks to spend. All they have is new mobile phones, a couple of new ties to wear on all the talk-back shows they haven’t had time to watch and have helped family. This is not only an example of ruthless business ethics from their new owners, but really proves that when the geeks inherit the earth they won’t know what to do first!
Anyhow, who needs a new car when you can have your own chauffeur? “Most of them live a very unassuming lifestyle, but they’re able to do anything they want, whenever they want.”
So this is another criteria that SWMBO and I have met satisfactorily. We have a 1998 Toyota Camry, ex-government. We own it outright. It only took four years at $500 a month – this reduced the interest to 0% and ensured we could get rid of it without having a debt over our head. Yeah, I would like another car: A Mini-Moke Californian. Anything more would be pure greed and pointless. Even if I won the $33million on New Years Eve. Oh, except to have a Jaguar XK Soft top in metallic light-blue. Hey, a man’s gotta have some luxuries!
5. They’re almost always home-owners, and many own investment property, too.
It appears that most American millionaires have financial assets in the form of real-estate property or a second home – but it is not their major source of wealth. They prefer to keep their money in ‘inevitable assets’. Reminds me of an old line my father would say: “Until YOU own your house, it is a liability, not an asset.” He didn’t say exactly that but I had to make sure you understood the meaning behind it. Here is my update of that proverb: “Anything that can burn to the ground is worth less than ground it’s built on.”
So how do the wealthy invest their money? Investments mainly – more than half in stocks and bonds, managed accounts, IRAs, mutual funds, deposits and alternative investments, one/tenth in pensions and defined-superannuation plans. The remaining six percent is put into insurance and annuities.
If there is one thing to be said from this article, this is the most important: “Don’t be a miser, take strategic risks, live within your means, diversify. You may never make the Forbes 400 list of the wealthiest people, but you can create a richer life. Maximise your net income after expenses and save what you can, invest what you can, to allow for more flexibility in the future.”