Top habits of the wealthy

Top habits of the wealthy - Part 1

Below are the top habits wealthy have in common:

1. Buy cars and plan to keep them long-term

Cars depreciate in value the second you drive one off the lot.

By keeping their cars long-term, the wealthy use the time between car purchases to save up cash that would otherwise go towards a monthly payment.

If you need to finance the car, pay it off as soon as you can and plan to keep the car long after that loan is paid off.

2. Have emergency funds

This is one of the key steps in building a solid financial foundation. The wealthy have a six to nine months of monthly expenses that they can tap into in an emergency goes a long way. If you have an unexpected expense like car repair or urgent medical bills, a rainy-day fund that is immediately available for withdrawals helps. This way, you don’t need to charge the expense onto a high-interest credit card or take out a personal loan.

3. Invest

The wealthy have organized investment plans - stocks, bonds or exchange-traded funds (ETFs).

As a general rule of thumb, you should save at least roughly 20% of your income each month.

Before you invest, know your risk appetite. If you are early career, 20s or 30s saving up for retirement, you can take on a little more risk in exchange for aggressive yields. For those in their 40s or 50s, their investment time frame for retiring is much shorter. Therefore, they are generally more reluctant to take on risk so to better protect their money.

Stay tuned, will be back with part 2.

Comments

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