UNDERSTAND VALUE OVER COST
Justin J. Kumar, a senior portfolio manager at Arlington Capital Management, said, “The wealthy person has three best friends: her attorney, her accountant and her advisor. The wealthy tend to use the law and tax code to their advantage when figuring out how to maximize their wealth, especially over multiple generations, and they are not afraid to spend money up front for counsel to get these answers.”
Kumar explained that it’s common for middle-income Americans to cut corners in order to save money, yet ultimately find the results lacking. “The wealthy look at value over cost, but they are still prudent in their decisions,” he said.
EAT OUT LESS
People who are concerned with saving money often skip the daily latte. The rich enjoy small splurges such as Starbucks whenever they want and instead look at saving from a broader perspective.
Author Paul Sullivan and colleague Brad Klontz, a clinical psychologist with an academic appointment at Kansas State University, conducted research on the differences in spending habits of the 1 percent and the 5 percent. The 1 percent spent 30 percent less on eating out and saved it for retirement instead. “And that, more than the cost of a Starbuck’s latte, is what, over time, separates the wealthy from everyone else on the wrong side of the thin green line,” Sullivan wrote in Fortune.
BE YOUR OWN BOSS
Employees work to make their bosses rich. If you’re aiming for true wealth, consider starting your own business. According to Forbes, nearly all of the 1,426 people on its list of billionaires made their fortunes through a business they or a family member had a hand in creating.
“Many middle-class workers think that starting a business is too risky,” said Robert Wilson, a financial advisor and frequent contributor to CNN, NBC and CBS. “The wealthy understand that what’s risky is allowing your time and earnings to be dictated by a boss who couldn’t care less about whether you get what you want for your life.”
