16 Ways The Rich Make Even More Money By Working Less
Many dream of being rich, but few ever achieve it. When you’re rich, life is easier in various ways – no more living paycheck to paycheck or wondering how to pay for groceries. Having a lot of Money doesn’t mean life is free from problems, but at least the basics needed to survive are covered.
The rich achieve prosperity by inheriting wealth or through hard work and ingenuity. But once they become prosperous, how do they earn even more money? There’s no secret formula, but the affluent can add to their wealth without breaking a sweat. Imagine how much more you could earn by embracing their strategies.
1. Multiple Income Streams
Earning an income from a single source, like a full-time or part-time job, means you’re at the mercy of your employer. They can cut your hours if and when they want to, lay you off, or let you go permanently with or without notice.
You’ll never achieve any measure of wealth counting on the generosity of one employer. Find a way to generate additional income. You’ll have more financial Security in case of a job loss or an unexpected reduction in hours.
2. Buy In Bulk
There’s a reason why warehouse clubs like Costco and Sam’s Club are so popular with people of all economic levels. Buyers save more money per unit by purchasing items in bulk, especially on non-perishable items.
Wealthy shoppers, in particular, use this buying approach in their personal and business lives. By reducing the number of trips to the store, they save money, and they save valuable time, which is a scarcer resource than money.
3. Long-Term Investments
Playing the stock market isn’t for the faint of heart. Watching your initial investment lose even the smallest amount of money makes your stomach drop. The initial instinct is to cut your losses and cash out.
That’s a mistake the rich don’t make. They play the long game, so they don’t cash out even if their initial investment loses money. They keep their money in place because they know it’ll likely rebound. You’ve heard that scared money doesn’t make money, right?
4. Invest in Dividend Stocks
If you’re unfamiliar with Investing in the stock market, that’s okay! But if you’re considering buying stocks, it’s important to know that not all corporate stocks pay dividends (profits) to their shareholders, but dividend stocks do.
Dividend stocks pay their shareholders when the business is profitable, usually quarterly. Consulting a financial advisor can provide useful information on how to purchase them and what companies to invest in.
5. Take Advantage of Tax Breaks
Rich people didn’t get that way by losing money. They get wealthy and build on their wealth by finding ways to make money. Taking advantage of lucrative tax breaks is an easy way for the affluent to earn money without doing anything but hire a good accounting team.
Roth IRA investments are a good example of an investment with a potential tax benefit. Contributions to a Roth IRA are made with after-tax dollars, allowing the money to grow tax-free. There are income limits to investing in a Roth IRA, but the rich can use a loophole to get around them.
6. Take Investment Risks
The rich love to be bold with their money and assume a certain amount of risk. They don’t risk all their money, but just enough to thrill them. Nothing is more daring than investing in high-risk, high-reward stocks.
You may not have an extra $250,000 to gamble in the stock market like well-off investors. And you shouldn’t invest more money than you can comfortably afford to lose. These risks make the rich very different from the rest of us.
7. Not Assuming Personal Debt
This action may seem impossible, but not assuming personal debt is one of the easiest techniques the rich use to increase their wealth. Instead of using credit cards or taking out long- or short-term loans, they pay cash for everything.
Buying a luxury item like a designer bag, a house, or a car? They pay cash for it. The wealthy want to avoid financing and paying interest over time. They invest the money they save in accrued interest in things that can make them money.
8. Stay Out of Debt
The natural continuation of not getting into debt is to stay out of debt as much as possible. Anytime you receive a bill, that means you’re indebted to another party. It doesn’t matter if it’s a loan or a utility bill. You owe someone money.
People of means hate being beholden to someone else, especially when money is concerned. The best way to alleviate that feeling is to pay the debt off as quickly as possible. You know how good it feels to pay a bill. Imagine how rich people feel about paying off bigger bills.
9. Own Rental Properties
You don’t have to be rich to own property, but owning multiple rentals like commercial Real Estate properties is a common way for the rich to make money. It’s more lucrative than owning residential properties.
Owners of commercial properties don’t have to hold them free and clear, but when renting them out, any money left over after paying the mortgage, maintenance, and property taxes is profit. When more than one property is involved, that can add up to a tidy sum.
10. Network
Rich people love rubbing elbows with their peers: other rich people. They not only like to interact with people with whom they have much in common but also like to invest in them and their business interests.
By building Relationships with their peers, they develop an atmosphere of trust. Once they have that shared trust, it’s easier for them to invest in whatever projects their peers work on. This high level of reciprocity benefits all parties involved.
11. They’re Hungry
The super-wealthy tend to stay hungry—not for food but more challenges and money. They’re never satisfied with their accomplishments, even though they may be substantial.
Having tremendous success and wealth isn’t enough. The rich want more and will come up with ideas to earn more without spending more time working. They let other people work more to make them money.
12. They Save Money
An adage goes, “The more you earn, the more you spend.” That may be true for the average person who experiences a pay increase, but the rich know not to fall into that trap.
Wealthy people are notoriously cheap. They will look for creative ways to avoid spending money at all costs. If they can get something for less or free, that’s more money in their bank accounts. If they can get someone else to pay their way, that’s even better for them.
13. Live Below Their Means
Some of the richest people don’t look that way nor necessarily live the opulent Lifestyle we expect them to have. They live unassumingly, wear regular clothes, and drive older, non-luxury cars. They look and live like everyone else.
Even though they could easily afford the better things, they understand those trimmings are unimportant and wouldn’t add to their wealth. They spend just enough to live comfortably but not extravagantly.
14. Open a Side Business
It’s common for rich people to add to their portfolio by opening one or more additional businesses besides their primary company to augment their income. They have the money to get the business off the ground and to hire personnel to do the work.
Case in point: an acquaintance is a chiropractor with a highly successful practice. After a few decades of building up his medical practice, he purchased a bar as his second business. His earnings from the bar are greater than what he makes as a chiropractor, and he doesn’t even have to do extra work. He has a staff to do that for min.
15. Seek Financial Advice
It may sound counterintuitive, but just because a person is rich doesn’t mean they necessarily know everything there is to know about money. They’re smart enough to know what they don’t know and seek financial experts’ advice.
Finance pros have the knowledge and expertise to help the rich manage their money in a way that keeps them wealthy and increases their wealth. Their counsel is invaluable for anyone who wants a passive income stream.
16. Stay Informed
Knowledge may not be a tangible asset like money, but the affluent use it to their advantage. The wealthy use their connections and money to stay informed about activities, events, and trends that may benefit them financially.
Staying informed may involve access to industry newsletters that are only sent to a select number of investors or other interested parties or attending members-only business conferences. If knowledge is power, the wealthy have an abundance of both.
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Originally Published on https://thefrugalexpat.com/
