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15 Surprising Ways Rich People Think Differently

15 Surprising Ways Rich People Think Differently

Rich people don’t think like average people. That’s the world we live in.

Being able to maintain a massive wealth over a long period of time is not something easy if you don’t have the right mentality. How would you explain that a large number of lottery winners who go broke after a few years?

They don’t have the rich people mentality.

When you look at the way rich people think, you will notice some intriguing similarities.

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They think about themselves first.

Before giving large sums of money to charities, they make sure they help themselves first. They did not get rich and stay rich by helping everybody carelessly. When they do something, they know what’s in it for them. It’s not selfishness, it’s staying rich.

They are constantly thinking about the future.

The future is only the present waiting to happen. Wealthy people know that if they want to keep their lifestyle, they have to think about the long-term. Globalization, financial crisis, and world conflicts are opportunities or threats for the rich individual. Not seizing long-term opportunities and ignoring potential threats is a recipe for becoming average.

They are action-oriented.

They don’t just relax and wait for interest to come in. In an ever-changing world, rich people think about the future, but have the means to act now. Good investors know how to make a quick decision to seize a fleeting opportunity.

They are passionate.

Their passions can vary, but rich people have the money and the time to fulfill their passions. If they don’t like to do something, they can always find somebody else to do it for them and then spend more time hunting deers if that’s what they like.

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They prefer specific knowledge over formal education.

Since they are action-oriented, they prefer an education that serves a concrete goal. Education is important, but becoming excellent in a specific area is more important. Rich people become extremely rich by being excellent at doing something or at doing something nobody has dared to do. College drop-outs following their start-up dreams to become billionaires are a long-lasting cliché, but the truth is that developing specific expertise early on will give them an edge.

They are outrageously ambitious.

And they need to be. If they were not, they would settle with “richer than average.” Very rich people will never be satisfied with the amount of wealth they have. They have an internal compass that directs towards “more money,” which means bigger projects.

They are not afraid to invest.

Rich people have been presented with countless get-rich-quick scams, and they know what it takes to be where there are: effort, time, or money. Since they got to a point where the biggest leverage they have is money, and that’s what they have more of than the others, they know they will have to invest to earn. You win some, you lose some.

They know how to leverage other people’s money.

Even if they have a lot of money, they know how to use other people’s money to get what they want. Bank loans, strategic partnerships… a global vision will allow them to find other people’s money to make their investment worthwhile.

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They surround themselves with like-minded people.

Having the lifestyle of rich people is very peculiar… they don’t share the same interests as other people, and there are not many people with whom you can share your concerns about having to pay millions in income taxes. They will flock together in similar gatherings and enjoy being together anywhere in the world.

They choose the best employees.

They know that their success lies upon the people that work for them. Rich people know what they want, have very little time for administrative stuff, and rely enormously on their employees. Since there is a lot at stake, they will choose the best and pay accordingly.

They can size anybody up in an instant.

Rich people are always solicited by average people, who always come to ask them for something. After a while, it becomes easy for them to evaluate people. It’s a matter of practice!

They have a very accurate detector.

They will ask few questions, but they will learn a lot from you. Since they have a global vision, they will challenge your proposals with their experience or outside-the-box comparisons. They will see if you are faking expertise, even if they don’t know your field.

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They don’t care about what you think of them.

They don’t have anything to prove any more. They won’t feel the need to show off their money or to show some kind of status. They will be very subtle in showing that they belong to a higher social class.

They think of the world as a small place.

The super wealthy are not stuck in a specific country. They are buying the best places around the world and consider the world as being a small place. Being in three different countries in one day is not surprising for them, and they will get a feel of where the world’s pulse is.

They raise their children to be rich.

Their children will handle a huge fortune as well. It is quite a sad prospect to think that your children will dilapidate the money you or your parents made with hard work. They will try to teach them the value of money so that they learn to take nothing for granted.

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Last Updated on June 6, 2019

The Average Retirement Savings and How to Save Wisely

The Average Retirement Savings and How to Save Wisely

Are you on track for retirement?

If not, don’t worry, I’m not sure either. I save each month and hope for the best.

Fortunately, I’m at an age where most people don’t save so I’m ahead of the curve.

But, what if you aren’t in your 20s? What if you’re near retirement and are looking to gauge where you stand?

If so, keep reading. Here’s how to prepare for retirement and save wisely during the process.

What Does the Average American Have Saved for Retirement?

Saving for retirement is tricky.

Tell someone straight out of college to save $10k a year for retirement and it’ll be next to impossible.

Make the same request to someone decades older and they’d be more likely to be able to save this amount. But, a 20-year old college student can be “financially ahead” of someone saving more than them. Why?

Age matters in your financial journey. The younger you are, the more time you have to save and put compound interest to work. As you get older and have more saving power, you’d have less time to put compound interest to work.

Here are the average savings Americans hold by age bracket:

20’s – $16,000

During this stage, most people are paying loans and moving up the corporate ladder. Your best bet during this stage is to focus on eliminating debt and increasing your income. Don’t focus only on getting a high-paying job neither.

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Instead, focus on learning via Podcasts, reading books, and taking specialized courses. Doing this will make you more valuable and give you more career options.

30’s – $45,000

At this stage, you’ve hopefully escaped your entry-level salary and work at a career you enjoy. Your earning power has increased but you now have more obligations. For example, marriage, kids, and a mortgage.

Set a plan to pay off all your debt and focus on eliminating unnecessary expenses. Leverage financial tools like Personal Capital to ensure you’re on track for retirement.

40’s – $63,000

This is the stage where you’re at the prime of your career. Top financial institutions recommend you have at least 2 to 4 times your salary saved up. If you’re falling behind, start maxing out your 401K and Roth IRA accounts.

50’s – $115,000

During your fifties, you’re close to retirement but still, have time to save. You may be helping your kids pay college tuition and other expenses. Since you’re at the peak of your earning power, max out all your retirement accounts.

60’s – $172,000

By this point, you should have about eight times your salary saved up. If not, you’ll depend primarily on social security benefits averaging $1400 per month. Max out all your retirement options as much as possible before retiring.

Ways to Save Money on a Tight Budget

The sad reality is that most Americans aren’t saving enough for retirement.

Even high-earning power isn’t enough to secure one’s financial future. You need to have the discipline to save for retirement while time is in your favor. Don’t wait for you to have a high salary to save, start with having a small budget.

First, get a clear picture of where you stand. Write down a list of “needs” and “wants.” For example, Netflix and Amazon Prime are “wants” and a “cell-phone” is a need.

Use tools like Personal Capital to analyze your spending patterns. Personal Capital allows you to add all your financial data in one place–making it a powerful option to gauge where you stand.

Once you know all your expenses, organize them from highest to lowest expense. When you can’t cut more expenses, call your service providers to negotiate a lower price. If you’re not good at negotiating, use services like Trimm to lower your monthly expenses.

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How to Save Money Each Month

By this point, you know the average amount of money you should have saved for retirement based on your age.

But, breaking this down into monthly goals can be challenging. Here are some rule of thumbs to follow:

Aim to contribute 10%–15% of your salary each paycheck. Review your progress each week.

Why so often? The reality is that life gets in our way and you will have many financial setbacks. Your goal isn’t to be perfect but to get back on track instead.

Reviewing your finances weekly lets you know where you stand with your retirement. This doesn’t have to be a long process either. All it takes is login in Personal Capital to view your net worth and check how much you have saved for retirement.

Turn saving into a game and aim to save more each month. It will get challenging but you’ll get creative and find more ways to save.

Top Money Saving Challenge Tips

To prepare for your financial future and not be another statistic you need to be different.

How?

By adopting new habits that’ll help you become a saving machine. Here are some ways you can save more:

Automatically Contribute Towards Retirement

If you’re working for a company, you can automatically contribute towards your 401k. If you’re not currently contributing more than 10%, make this your goal. Contribute 1% more today and automatically increase this amount a year from now.

Odds are that you’re not going to be negatively affected by contributing 1% more. Many times we spend our money on things we don’t need. Contributing more towards retirement is a great way to secure your financial future.

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Use the Right Tools to Know Where You Stand

Once you’re contributing more towards your retirement accounts, gauge your progress. Make use of finance tracking apps to help you view the big picture of your retirement.

When I’d first signed up for the app Personal Capital, I didn’t know I had a negative net worth. Despite saving thousands of dollars, my debt brought my net worth to the negative. Knowing this motivated me to save more and spend less.

Now, I have a positive net worth. But, it was because I was able to view the big picture using the app. Find out what your net worth is using a finance tracking app and you may surprise yourself.

Bring in Experts to View Your Blind Spots

If you have too little or too much money saved, you should consider hiring financial experts.

Why?

You may need someone to hold you accountable to help you reach your financial goals. Or, you may need help managing your money as effective as possible.

Regardless of the reason, getting help may help improve your financial situation.

Before you hire an expert, find out which areas you need help the most. For example, if you’re constantly overspending, find a debt counselor. If you’re struggling with choosing the best investment options, hire a financial advisor.

Speed up Your Retirement Contribution

After learning how to manage your money well, the next best thing is to earn a higher income.

You’re capped at how much you can save but not much you can earn. Even if your employer isn’t giving you a promotion, you can still take charge of your financial future. How?

By starting a side-business.

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This will be something you’d work on after you’ve finished your day job. Once you start earning income from your side-business, you’ll be financially better off.

The best part is the more work you put into your side-business,[1] the more potential it has to earn more money.

So start a side-business in an area you’re familiar with. For example, if you enjoy writing, do freelance writing for small e-commerce businesses.

Once you’re earning a higher income, you can contribute more towards your retirement. Don’t wait for the right opportunity to secure your financial future, create one.

Reach Financial Freedom with Confidence

What if you were able to retire tomorrow with no problem, all because you’d have enough money saved up and little to no debt left to pay off? How would you feel?

My guess is that you’d feel happy and relieved.

Most Americans are falling behind their retirement goals for many reasons. They’re not prepared, they carry bad money-habits and are thinking short-term.

For you to retire successfully, you need to work backward and adopt better habits. Contribute more towards your 401K and focus on growing your income.

If you do, you’ll save money and pay debt faster.

Don’t beat yourself up if you’re behind your retirement goals. Take the first step today towards a brighter financial future. Isn’t retirement worth the hard work and sacrifice to be at peace?

Featured photo credit: Huy Phan via unsplash.com

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