Table of Contents
How to Manage Your Money Like The Rich
If every single dollar on the entire planet completely disappeared right this second and every single person started at zero. Guess what? In just a short period of time, the rich would become rich again. Why? Because the rich understand money they’ve spent the time, they’ve spent the resources, they’ve spent the energy to learn about money at the highest level. So even if it all went away, they could replace that or at the very least, create an amazing life of abundance for themselves where they have more than they need.
Before everyone jumps in saying, what about this might not be for every single situation. There are obviously people that inherited their wealth and didn’t grow it or even lost a lot of it, or maybe even some small number of people who just got lucky in business, but the reality is those are a small percentage versus the people that took money and grew whatever they had and made their wealth themselves.
Why? Because the reality is wealth is about education. It’s about habits, and it’s about strategy. That’s why this youtube channel exists, to give you the tools and the education and the investment options that you need to become as wealthy as you want or need to in your life.
Most people say that they would like to be rich, but also most people are talkers and they’re unwilling to take the necessary steps to get there. It’s a lot easier to talk about it than it is to pay the price of hard work and sacrifices and long-term effort and strategy to achieve that goal, but it is possible and the first thing that it takes is understanding the mindset of what it takes to be wealthy.
Principles of How the Wealthy Think, Apply these to your Life.
I. Get out of debt and you need to stay out of debt for your lifetime.
Avoiding bad debt is one of the most common recommendations for pretty much every single financial professional. As Dave Ramsey likes to say, “stop giving your money to financial systems that are designed to take your money away from you.”
If you can’t afford to buy something outright or it doesn’t fit in your budget in a way that can make sense for your overall goals, then either wait until you can afford that or consider the fact that it might not be that important. If it gets you even further away from the goals that you’re saying you want to get to the word needed, right? You don’t need new clothes, you don’t need high-end electronics, and you don’t need fancy cars as much as you think you may need these things and when you borrow for discretionary items, things that you don’t need, you always pay too much because the value of what that thing adds to your life like a car, for example, is what it can provide in utility. So if a car can take you from point A to point B, then the reality is every dollar that you spend above the bare minimum, there is technically a wasted dollar if you want to think about it from a utility standpoint.
In my own life, this is the reason I bought one of the ugliest, least sexy and most annoying cars on the road. I drove a Prius for almost a decade, even though I was a millionaire for a good chunk of that time because I looked at it like this. I have a payment to make towards a car and the dollar figure of that car, the lower that dollar figure is the better off I’m doing as the consumer and the driver of that car because every dollar I didn’t spend on that, and at the time I was doing my own personal budget, the things that were more valuable were shoving my money into as many high quality investments as I could.
In the 10 years that I had that car, and by the way, I still have that freaking car, it’s like kind of a nice little place in my heart that that crappy Prius has. But in the 10 years that I’ve had that car and the money I saved over that period of time, that money has essentially exponentially grown because I invested the difference every single month and also, if you’re putting things on credit cards, you need to understand the credit card system.
Credit card companies do not provide credit because they’re charities and they want you to have nice things for free. They offer you credit because they want to make money from the interest and the fees that you pay to use the credit they’re offering you.
Now, to be clear, that doesn’t mean that they’re bad companies or bad people. It means they’re offering a service that you as the consumer need to be respectful of because it can get you into trouble if you don’t know what you’re doing and use it carelessly.
Additionally, that doesn’t mean that wealthy people don’t use credit cards as well. They do, and in fact, they may put daily purchases and routine expenses on a credit card just like anyone else. But oftentimes the wealthy people are looking for extra rewards like airline miles, cashback in return, or other kinds of bonuses that credit cards can offer them along the way for money that they would’ve spent. Either way, the number one difference is that the wealthy pay their balance off every single month on their credit card. They are not wealthy and smart people are not rolling balances month to month on their credit cards because they’re so expensive and as a result, they won’t incur any interest charges or any other fees that they would have if they kept the money there. Also, it gives a handy record of what they spent during the month and all those free bonuses like travel and points and the things we mentioned, if you have the discipline to refrain from carrying a costly balance or worse exceeding your available credit limit and having that problem, then it might be worth researching the cards that reward your spending patterns with points or cash that benefit you the most.
II. increasing your income.
Cutting your expenses is crucial, but there are limits. You can’t cut expenses below zero, and the reality is you do need to exist. So you have some you need to spend. You might have rent or a mortgage, transportation, utilities, and also you need to eat. Although you can’t save a ton of money by making your food at home, doing things like meal prepping and planning that out, and that can also lead to better health, but you do have to eat and that will cost you some money. So the point is you can’t save infinitely, but you can make infinitely more money if you employ strategies to get there. Now, the easiest example you’ll get is that you need to look for a higher paying job or some kind of secret side hustle that you can find on a bunch of different blogs or websites out there.
Thousands and maybe even millions of people actually do earn significant extra cash with side hustles and all kinds of other creative ideas and to be fair, there are some pretty cool passive income options that you can do if you’re smart. But, and let me say, in big, bold letters, there is something to consider and that is why split your focus between so many different things when you could focus on one big endeavor that could make you a lot more money as one single focus. Now, let me say that income is a huge topic. It is essentially infinite and one that we could spend many, many, many videos just focusing on that. But here are the basics of what I want to give you in this video, which is the mindset of wealthy people. First off, if you’re broke, you need to get unbroke. That’s the reality of raising your income.
So all the other details between here and there are details and we need to identify the goal of making you more money. When you’re looking through this, the number one priority you are looking for is to choose and develop high value, high leverage skills that add a ton of value to a business and an institution that makes money and for you to choose skills that can scale infinitely.
These are business skills like marketing, sales and sales as a system, meaning being able to build out a sales process for a company that doesn’t have it and to be able to scale that infinitely and third, it’s technology that can be used to massively grow or add massive value to a business. A perfect example of the last one is something like data science, advanced data science, coupled with marketing, you could literally walk into a business and say, look, if I can raise your revenue by 30% through analyze your company’s sales and marketing data and creating better systems to maximize those, will you pay me this huge sum of money regularly?
Let me tell you, if you do that and you’re able to provide that to businesses, you will have a freaking waiting list of clients knocking at your door to get what you have to offer. And you know what the best part of all of this is? All of the skills that I just mentioned have amazing courses and amazing education options online right now that are either completely free or relatively low cost. You need to improve as an individual with your skills and what value you can bring in order to make more. It’s as simple as that. And if you want to make big money, then you need to be able to provide big value to others and something that can scale infinitely.
If you can do that, you will get paid that high dollar figure that you have in mind. Again, the income component is a really big conversation that goes beyond the scope of this video.
Without knowing what you personally as an individual are interested in, it’s hard for me to point you in the exact right direction. But if you spend some time searching, you decide whether you’re a marketing or your data or you’re a sales, whatever skill you think can scale to the moon, then you can find what you’re looking for through searching for education options. If you want me to point you in the direction of something that we can immediately give you, then check out our videos in this channel on earning passive income and different strategies that we’ve broken down that you can jump into immediately at the level you’re starting at today.
III. Keep an emergency fund.
That advice always sounds impossible when you’re at a place like carrying debt, but it’s also one of the most common reasons that people go into debt to begin with.
Very commonly, you can go into debt by just incurring expenses that you didn’t budget for. For example, if you need new tires for your car and you have to drive to work, obviously, but you don’t have $800 available for that, then you charge it to your credit card, right? But then if you can’t pay your credit card balance, then you are going to carry that balance moving forward and pay that crazy high interest that we just talked about. Avoiding this eventually perpetuates the problem and yet ends up with more debt. But there’s a better way. Even if you have a modest emergency fund account, you will avoid many of these stressful detours and issues that could put you into debt that you’re trying to avoid. So have an emergency fund, it will bail you out of the speed bumps that come up in day-to-day life.
IV. Invest consistently and strategically
Even when you’re just starting out your journey to financial independence and wealth. Start investing and keep at it. If nothing else, take advantage of a savings and retirement account that offers tax benefits. There are at least three great reasons for this strategy. The first is that you can save on your taxes, which means you earn money before your investment even starts to pay off. So why pay however much you have to pay in taxes when you can pay less than that and make money on investments at the same time. It might sound like a secret or illegitimate strategy, but it’s something that the IRS has structured so that you are incentivized to invest. And if you’re paying more taxes than you need to, then your future wealth is eroding away.
Also, this strategy is a great way to start your investing career. It begins the commitment that you can make lifelong to put money towards investing on a regular basis, and it will give you the opportunity to start seeing those assets grow and for you to be motivated to check in and see how they’re doing. Another well-known piece of advice from Dave Ramsey again is to have more than one account for investing. He’s a proponent of having a retirement account, a stock account, and even a cash for real estate account. So multiple accounts that he puts money towards on a regular basis that allows him to more easily manage his money and know exactly where those dollars are going. I can tell you from my personal life that once I boosted my income to a good level, because that was my focus at first, was to get a great income.
Once I hit that level, it became apparent when studying wealthy people, that income alone could not get me and most likely cannot get you to massive wealth. Let me say that again. High income alone cannot get you to massive wealth. Look at the richest people in the world. It’s not their income that got them to the richest person’s status. It’s their assets and it’s the appreciation and the leverage and the other strategic benefits of those assets that grew their wealth significantly. You can only reach the highest levels of wealth by having things that passively make you richer. Why? Because your time, your effort, your energy and your education are limited. You can only have a finite amount of these items, but you can have significant leverage by investing in allowing your investment or the investment managers that you invest with to do the major lifting and boost your returns for you.
I realized that I was gonna be investing heavily into the future anyway, so why would I want to wait and push off that learning experience that I could have done today? It became an extremely important goal of mine to learn every single thing that I possibly could about investing and especially investing into real estate and guess what? Through that journey of my education, it turned out that I liked real estate so much. I decided to do it full-time and financially. That self-education period that I went to on investing and on real estate, that was one of the best commitments that I ever made to myself and my future and my future family.
So I encourage you to go through the process and commit to the education piece. Again, the highest level of managing your money, like the rich, is investing into things that will give you a high return on your investment while they’re appreciating, while they’re giving you cash flow and while they’re keeping your money extremely safe. Accredited investors get access to opportunities more than anyone else in our country. I’m putting up a video for you now to help you learn about investing and becoming an accredited investor. This will give you an opportunity to invest in the best opportunities that exist in the investment market today, and that are usually not talked about with most people. So check out on my youtube channel about the How To Become An Accredited Investor (and KILL IT) and learn about the number one way to have access to deals that nobody else sees in the everyday market.
President of Saint Investment Group
Nic is a two decade seasoned expert in investing and capital raising, specializing in Real Estate and debt markets. With Saint Investment Group, he leads large-scale distressed asset purchases and innovative syndications for investors.