A wealth of wisdom
THERE’S a difference between having a lot of money and being truly wealthy.
Paul Sullivan, author of The Thin Green Line: The Money Secrets of the Super Wealthy, puts it concisely: wealthy people don’t just have money, they know how to protect and grow their wealth as well.
This security requires having a full understanding and appreciation of their finances, not just a knack for lavish spending.
The good news is the rest of us can learn from the money habits of these super wealthy people, incorporate them into our own lives and hopefully get there ourselves a little faster.
Here are six money lessons we can learn from the wealthy.
CREATE WEALTH Flick through any rich list on any given year and you’ll notice most of the entrants are in the business of wealth creation.
Maybe they started their own business, had an amazing idea or are at the pinnacle of their field.
The lesson here is that these people have given it a go and as a result are able to generate their own income and assets.
TAKE SMART RISKS Wealthy people understand there is no reward without risk.
Whether it’s borrowing money to grow a business or investing in income- generating assets over the long term, rich people are comfortable with taking on a reasonable level of risk to generate an aboveaverage return.
DO THEIR HOMEWORK The wealthy put in the time and effort to ensure they have every base covered, and they’re not emotional about it. If the deal doesn’t stack up, they’ll just walk away. And they’re not afraid of failure.
Gerry Harvey once said to me “You’ve never been in business until you’ve been to the brink, looked over the cliff, learnt the lesson and then stepped back.”
We thought he was just being grumpy until it happened to us and we realised how insightful he is.
FRUGAL Aren’t rich people constantly splurging on designer watches, eating out and first class flights? Nope.
It’s much more likely they’re watching every dollar that goes in and out like a hawk – it’s how they got so rich in the first place ( and why they’ll stay that way).
According to research Paul Sullivan did with financial psychologist Brad Klontz, the richest 1 per cent eats out 30 per cent less than an average wealthy person, and saves 30 per cent more for retirement.
WORK REALLY HARD Self- made people know one of the surest ways of rising above the rest is working harder than everyone else.
If you’re looking for work- life balance and reasonable hours, you’re not going to get rich.
DRIVE A HARD BARGAIN The wealthy are born negotiators who want the very best deal in every situation and are prepared to haggle.