Cover photo by Jingming Pan on Unsplash
Today’s Focus of Attention is reader-supported. We sometimes include products we think are useful for our readers. If you buy through links on this page, we may earn a small commission.
Have you ever thought about why some people are filthy rich while others barely have one bite to fill their mouth?
Is there any secret formula to make a huge capital that none of us are aware of?
Today’s article is about money strategies, financial freedom, and why the rich are rich and the poor are poor, although we know money is not the only way to measure success.
The gap between those with vast amounts of wealth and the impoverished has widened in recent decades, with only 1% of the population controlling about 48% of the resources in the world.
Of that 1%, 80 individuals are worth as much as half of the world’s population – almost 4 billion people.
Disproportionate, innit?
There’s no doubt this 1% is doing something that the rest are not. Is this difference related to mindset, attitude, or social circle?
We all bleed, eat, and have the same 24 hours in a day. So, what happens here?
You may think that rich individuals were born with a silver spoon in their mouth or they were in the right place at the right time.
Perhaps a few do indeed come from wealthy families, but that’s not the case for all of them. Many made it through hard work and cunning. They were determined to never stop, let their fears take over, or allow others to decide their fate.
It is not as difficult as you might think.
Let’s explore the habits rich people have.
Strategy #1 – Put 10% of your income aside
Do not rush to pay your creditors. Every month, set aside 10% of your cash immediately after you receive it, even before paying your bills, mortgage, or Netflix.
The sooner you start, the more money you get.
Once you have earmarked your tithe, go for your liabilities.
Should a major financial crisis happen – a huge medical bill, car repair, or in the worst-case scenario, being fired – you will be protected on your safety net.
You can do it automatically with your bank app or withdraw the cash and make a deposit in another account. Just do it.
Strategy #2 – If you don’t need it, don’t buy it. Period.
You must understand the distinction between necessities and luxuries.
If you crave something, give it some deep thought and analyse whether you really need it; if not, do not buy it.
By combining strategies 1 and 2, you will see a change in your finances over the short term.
Strategy #3 – Avoid magical formulas
There are no shortcuts when it comes to being wealthy.
Look at people such as Elon Musk, Bill Gates, or Warren Buffett. They didn’t become rich overnight. It took years of hard work to be in the top 10.
Going to Vegas or buying a lottery ticket won’t make you rich. It could happen; it’s happened before. However, the chances of winning are one in a million. So it may not be the best system to rely on.
Strategy #4 – Delay gratification
Having coffee at Starbucks every day can become a huge expense over time.
Hold your horses and save that money to invest, travel, or buy something you need.
Those petty expenses add up quickly. Do the math, and you’ll see the how the monster grows in a year.
Picture future rewards instead of giving way to instant pleasure. You won’t regret it.
Strategy #5 – Rich people never stop learning
If after work you take a shower, put on your slippers, and sit in front of the TV, you are not taking the right path. This is keeping you in the same hole you say you want to get out of.
What you should do instead is educate yourself about getting another stream of income, a side hustle, or a higher degree for your career. Invest in yourself.
Become a voracious reader and stay informed about the latest trends in your industry and beyond.
The more you learn, the more you earn. You can accomplish it by reading.
When Warren Buffett was asked about his success, he just pointed to a shelf of books and said, “Read 500 pages like this every single day.”
Knowledge works like compound interest.
So, what are you waiting for? Start reading more.
Strategy #6 – Build several sources of income
Rich people understand the importance of having multiple streams of revenue. They don’t put all their eggs in one basket.
This approach helps you reduce financial risk, build a more stable economic foundation, and increase your security in moments of crisis.
Imagine you are sacked from your job tomorrow, but if you’ve saved your 10% every month and, besides, you have a side hustle, you are practically immune to the battering of the circumstances.
Common ways to build other streams of income are through stocks, renting a property, or offering freelance services. One complements the other.
Strategy #7 – Seek advice before investing
You worked really hard for your money, didn’t you? You don’t want to lose a single penny, right?
If so, why would you trust yourself or another person who is not savvy about making smart investments?
Some chaps follow their gut and invest in an area that they know little about or that is potentially a scam.
Seek advice from professionals. You wouldn’t let a mechanic perform open heart surgery, would you? Same with investments.
Strategy #8 – Surround yourself with successful people
Tell me who your friends are, and I will tell you who you are.
Those you choose to spend time with have an influence on your habits, character, and values.
Poor people tend to meet with others who complain about the government, banks, or how life is unfair, instead of solving their issues.
Rich individuals, on the other hand, surround themselves with peers who have a wealth of knowledge and skills to offer.
What should you do? Be with those who can motivate you, point you in the right direction, are already where you want to be, and have succeeded in fields you wish to enter.
The rich understand that their social circle drives them to success.
Stay away from the energy vampires.
Strategy #9 – Promote yourself and your value
If you know something you consider valuable, share it with the world.
Make yourself known to others. Get your name out there as your brand.
Hundreds of examples include chefs, entrepreneurs, real estate agents, personal trainers, and authors.
Don’t be ashamed or afraid of promoting yourself. Be loud and proud.
Strategy #10 – Be goal oriented
Successful individuals are ambitious. They know exactly where to go and what to do to get there.
Remember to have specific goals, otherwise, you might end up drifting from one target to another. If your aim is clear, you are able to create each of the baby steps to climb to the top.
Being goal-oriented helps you plan and manage your time and financial resources to achieve your ambitions.
Conclusion
These 10 actions will take you in the right direction, whether it is about building wealth or making the most of your money. Start implementing them without delay.
As you can see, they are not difficult at all. Just remember, one step at a time.
Have you implemented any of these strategies before? If not, which of them would be the first on your list?
