Money Management Tricks That Make The Rich Richer

By BankBazaar | April 12, 2018

Ever wondered what helps rich folks stay rich and become richer? Here are the answers.

Different people have different ambitions. But no matter how different they are, there’s one thing that everybody has in common (well, almost everyone). We all want to be rich! Not ‘not broke at the end of the month’ rich; we mean rolling in the good stuff kind of rich. We’re talking millions here. We all want a humongous bank balance, a good house and a decent car, don’t we? Basically, everything that defines a secure financial future.

Have you ever thought about people who already have a lot of money? The rich lot? The ones who can’t even count the total value of their assets and bank balance? What’s the secret to all that money, anyway? Did they win a lottery or is it just ancestral money? Well, there are some lucky ones who inherited all their wealth. And then there are the self-made ones. The source of that money doesn’t matter. All that matters is that they are wealthy, after all!

Additional Reading: 7 Golden Questions You Need To Ask Yourself To Save Better

Managing and maintaining wealth, however, is not an easy job. We are here to reveal the secrets that no one ever told you. Here are some tricks that help the wealthy retain their wealth and make it grow as well.

Needs And Wants: They Have Them Sorted

When it comes to knowing the difference between their needs and wants, wealthy people are quite sorted. They are normal people after all and have needs and wants, just like the rest of us. The key question here is—do you know the difference?

Needs are often confused with wants, but in reality, there’s a thin line separating the two. For instance, if your refrigerator is broken and you don’t have a place to store your excess food, you need a replacement. This is something that needs your immediate attention, especially if food is the most important thing in life. In this case, if you spend some bucks and buy a new fridge (no matter how expensive as long as it serves the purpose), it’s justified. Or better yet, get your fridge repaired if it isn’t beyond redemption. It is a genuine need and by buying a new fridge, you’re just taking care of that basic need. On the other hand, consider this scenario—you were running on the treadmill and your phone just fell out of your pocket and broke. Now, you have two ways to get out of this unfortunate situation. You can either choose to get an economical replacement, a basic smartphone that can help fulfil your needs. Or, you could go ahead and get yourself the latest iPhone without worrying about the cost. Opting for the second option is more like taking care of your wants and not needs.

Basically, it’s all about the choices you make. Although rich people have a lot to spend (without actually having to worry about anything), they know exactly what their needs and wants are. Weak moments? Of course! We all have those times where we see the latest version of our favourite gadget and all we can think about is buying it and trying out all the new features. That’s okay! You’re allowed to lose control once a while (even millionaires do). After all, it’s your hard-earned money. You have the right to decide how to spend it. Keep in mind though, that investing the money instead will likely get you more money in the long run.

Impulsive Buys? What’s That?

Yes, people with a lot of money probably have a lot of free cash to spare but they prefer to keep away from impulsive buying decisions. Impulsive buys can be anything, right from some extra snacks from the grocery store to the latest pair of earphones you saw and wanted. No matter how big or small, the whole point is to restrict yourself from making impulsive decisions.

You say you’ve never made an impulsive buy? Well, what about that time at the supermarket, when you went to buy some basic groceries but ended up losing track of the list? You got distracted and instead of sticking to the original plan, you ended up buying fancy gourmet foods that you didn’t even consume later. We understand that it can be hard to resist some great packaging, those amazing discounts and what not. But hey! It’s all about self-control.

So, you always stick to the grocery list, you say? That’s great. But what about that online shopping spree? Remember the day your favourite online shopping website had the most happening sale on and you ‘just’ wanted to buy a pair of running shoes for the gym? Well, that sounds fair. You needed the gym shoes and there was a sale going on. Why not make the most of it, right? But it’s not the shoes we’re talking, duh! We’re talking about those extra items in your cart that you didn’t actually need but bought anyway!

Additional Reading: Are You Into Compulsive Spending? Here’s How To Avoid It

You need to avoid falling prey to all those great sales and offers, especially when you don’t even need the stuff you’re planning to buy. Wealthy people, on the other hand usually keep away from temptations like this. Think Warren Buffet if you’re looking for a role model!

Long-Term Plans > Short-Term Gains

One of the most peculiar traits of the rich (at least the ones who plan on becoming richer) is long-term planning. They always give preference to something that can prove to be beneficial in the long run instead of something that can yield a short-term gain and then vanish into thin air.

Looking at the bigger picture always helps. You have a better idea of what you want in future and a secure long-term plan helps secure it as well. Long-term plans also help you stay motivated and focused and the chances of achieving targets bigger than your plans increase significantly. This might sound easy, but it isn’t unless you have a foolproof plan in place. What you need to do is—put your thinking cap on and come up with a solid plan according to your needs and where you see yourself in a couple of years. After all, it has to suit your needs and be in sync with your future plans, right?

Well, this is another crucial lesson you can learn from the rich. Even if a certain financial decision is expensive right now, but has the potential to yield great results in the future, they go for it. When it comes to making more money, you need to be willing to take some risks. Well-calculated, of course. But you need to analyse your current and future needs and plan accordingly.

They Take The Auto Route

When you’re very rich, keeping an account of all your money can be difficult. The good news is that no matter how much you hate dealing with complicated numbers, there are ways to handle it all. In this technology-oriented world, just take the automatic route, yo!

Depending on what you’re saving for, you can choose from multiple options and let the option of automatic money withdrawal do its magic for you. Automating your savings can help simplify a lot of things for you. You’ll no longer have the need to keep thousands of reminders on your phone. Technology will do the needful for you.

Additional Reading: 7 Useful Money Management Tips For Working Women!

It’s All About Budgeting

Millionaires are no magicians. They don’t have a bundle of secret tricks that help them save and make more money. One of their biggest and most powerful tools is—budgeting. No matter if you’re already wealthy or just starting the journey, you need to understand the power of a well-thought-out budget. Following it doesn’t only help you save better, it also helps figure out your priorities.

Understand your needs for the month and formulate a budget accordingly. You need to know the exact cash inflow and outflow at all times. Having a spending plan makes things easier. You’ll get an idea of how to avoid unnecessary wastage. So, in case you think that millionaires don’t make budgets because they don’t need them, you are wrong!

Additional Reading: 4 Possible Leaks In Your Budget

Emergencies? They Are Always Ready.

If you think that the wealthy don’t need to be prepared for rainy days, you’re wrong. It’s actually one of the first steps any financially successful person takes in terms of managing their finances. A crisis can happen anytime and to anyone. If you really want to make your finances crisis-proof, you’ve got to have enough saved as an emergency fund. Having enough saved for rainy days eliminates the need to borrow money from anyone. Being there for yourself is better than depending on others for financial help.

Additional Reading: 7 Places You Should Never Keep Your Emergency Cash

Understand First. Invest Second.

Although they have a lot more to invest in different places, millionaires don’t invest anywhere and everywhere. Instead, they limit their investments to places they are completely sure about. Just because a particular investment turned out to be great for your friend doesn’t mean that it’ll make complete sense for you too. Different people have different needs and different levels of understanding when it comes to making financial decisions. Keep that in mind.

Expenses. They Track Them Down.

Budgeting isn’t enough. You also need to set your priorities straight and see where you actually need to spend and what you can avoid. That’s why you need to start tracking your expenses. Yes, even millionaires do that. Maybe you’ll find better deals on things you’re merely wasting money on. You won’t know unless you track your expenses and see if you’re spending right or just wasting your resources.

They Never Say No To Financial Advice

In case they feel they need some expert advice, wealthy people don’t shy away from looking for it. Their biggest strength is that they know everything about their strengths and weaknesses. Money management can sometimes be really tricky and they know it. That’s why they never leave anything up to fate.

We hope these tips help you better your money management skills. Thinking about investing for the future? You’re just a click away!

All information including news articles and blogs published on this website are strictly for general information purpose only. BankBazaar does not provide any warranty about the authenticity and accuracy of such information. BankBazaar will not be held responsible for any loss and/or damage that arises or is incurred by use of such information. Rates and offers as may be applicable at the time of applying for a product may vary from that mentioned above. Please visit www.bankbazaar.com for the latest rates/offers.
Category: Money Management
BankBazaar

About BankBazaar

BankBazaar is the world's first neutral online marketplace for instant customised rate quotes on Loans, Credit Cards, Insurance and Investment products. Shop for financial products just like you buy everything else now - online.

Leave a Reply

Your email address will not be published. Required fields are marked *