Why do people value rich people

Rich people handle their money differently than you think

Rich people seem to know something about money that we don't. In fact, many of us have the wrong idea of ​​how rich people handle their money. Manisha Thakor, vice president of financial education at Brighton Jones investment advisory service, sheds light on the darkness.

Keep track of your finances

"I think it's a big mistake that rich people don't pay attention to how much they save and spend," Thakor told the tech and business magazine "Fast Company". "I know people with a fortune of 10 million US dollars who can tell you at any point in time exactly how much they are saving each month."

So you should always have an overview of your income and expenses. Finance apps that can serve as your budget book can also help. If you are already carefully monitoring your finances, then you are already on the right track, says Thakor. She recommends doing a weekly overview of the finances. Especially in your 20s and 30s you can save valuable money.

Thomas C. Corley, who interviewed 233 rich people (177 of whom were self-made millionaires) for his "Rich Habits" study, is of the same opinion. “Do you know where you spend your money? You should, ”he wrote in a guest post for Business Insider. "Keeping a record of expenses opens your eyes so that you know exactly where your money is going."

Be careful with credit cards

Rich people are also more cautious about credit cards. "Most rich people carry fewer credit cards than the average American," Thakor said. They know credit cards have higher interest rates and can face exceptionally high penalties for overdrafts.

Choosing the right card is also not to be underestimated. If you travel a lot, you should choose a card with corresponding benefits, such as the American Express Platinum Card or the Capital One Venture Card.

Financial expert and blogger Danetha Doe recommends that you get a card that rewards your bad habits. "If you're someone who can never hold back when it comes to restaurants, find a credit card that rewards you for these decisions."

Of course, you should pay your credit card bill in full every month. In order for you to be able to do that, you shouldn't buy anything that you can't afford. If that happens anyway, according to Thakota, you should cut back other arbitrary expenses for a few weeks so you can settle the bills.

Invested in multiple stocks

Another misconception is that you get rich by finding that one hot stock. The opposite is the case: "Rich people understand that the key is to invest their money in as many stocks as possible."

The best way to start investing is with long-term investments in pension funds. "The holy grail are index funds," explains Thakor. Index funds are safer because they try to keep up with the stock market situation of a certain index such as the DAX instead of betting against it.

Don't try to look rich

Last but not least, a hot tip: living below your means is more important than trying to look rich in order to impress others. Multimillionaires don't care to keep up with others. For example, the former professional basketball player Shaquille O'Neal had to experience this firsthand.

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In an interview with Business Insider, he said that he once spent a million dollars in a day because he bought a Mercedes-Benz for himself, his mother, and his father. He also bought expensive jewelry and gifts for friends. After deducting the tax and his agent's salary, he realized he'd managed to spend all of his monthly income.

It is not important to look rich and to spend a lot of money on it - because that way you will very quickly find yourself back at the starting position where you started.