There are over 60 million millionaires in the world and 2.85 million of them are in the UK. Wealth can come from a range of different sources such as inheritance but the reality is that many wealthy people started small and built their wealth strategically over time. This includes tactical saving and savvy investing coupled with a consistently frugal lifestyle. No matter how much money you’re starting with, there are always things you can do to improve your financial health, strengthen your money management skills, and enhance your financial success.
In this blog post, we will highlight several personal finance tips and strategies the wealthy have tried and tested to help you optimise your wealth-building plans with these smart habits and practices.
How the wealthy think
“[Getting rich]is not in the mechanics of money, but in the level of thinking that generates it.”
Stephen Siebold
Wealth is the combination of net worth and a set of values and behaviours that maintain it. While it’s incredibly rare, some people can become momentarily rich, but the difference between rich and wealthy is not only the assets you own but how you approach and deal with financial decisions.
Here are some of the key wealthy philosophies that separate their view of the world from the masses.
| What the wealthy think | What the masses think |
| Being wealthy is a right | Being wealthy is a privilege |
| Starting a business is the fastest way to make money | Starting a business is risky |
| The wealthy are more savvy | The wealthy are smarter |
| Building wealth takes a team | Building wealth is an individual effort |
| Making money is simple | Making money is complicated |
| Money is earnt through thinking | Money is earnt through time and labour |
| Money is liberating | Money is controlling |
| Working for fulfilment | Working for money |
Personal finance tips for the wealthy
Adopting a wealthy mindset is one thing, but putting these beliefs into practice is another. Here are some of the key personal finance tips that many wealthy people apply to their wealth-building strategies that you can implement in your own plans and enhance your financial success journey.
1. Don’t sit on your money
Leaving your money idle means that it’s not growing. Many wealthy people refer to themselves as “cash broke”, which doesn’t mean they have no money, it simply means it’s being put to good use as opposed to merely sitting in their account. To maintain wealth, your money should be working for you at all times through methods like investing.
2. Live within your means
A frugal approach to spending not only helps wealthy people save money they don’t need to spend, but it also contributes to a deeper and more fulfilling lifestyle. There’s more to wealth than monetary value; it’s also about happiness, being content with what you have, and making the most of what you have, rather than trying to live an unattainable and unsustainable lifestyle.
3. Don’t pay interest
High interest rates (with credit cards, for example) are a form of bad debt. Over the long term, you end up paying considerably more than the item’s original value. So, buying something on sale with a credit card that has a high interest rate negates the saving. Wealthy individuals tend not to have credit cards, particularly for regular high street spending. Ultimately, if you can’t pay for it outright, then you are living above your means. The only exception when it comes to interest rates is mortgage debt.
4. Value your time
Assess your lifestyle for any areas where your time could be used more wisely. For example, if the two hours you spend cleaning your house could be spent more proactively by managing your finances or making investments, then you could consider outsourcing domestic help if it’s financially viable. Review your routine for any distractions that are not adding enough value to your wealth-building strategy.
5. Use insurance strategically
Wealthy people protect their businesses, assets, and family with life insurance. To protect their wealth from estate and inheritance tax after their death, the wealthy use insurance strategically to prevent their loved ones from having to sell their inherited assets in order to cover any tax fees. Life insurance can also safeguard any businesses that you co-own or have shares in, so in the event of your death, a life insurance policy will compensate your family as well as your business partners, meaning that they can retain control over the company without burdening the surviving family members.
6. Meet regularly with your financial advisors
Meeting with your accountants, financial advisors, and estate planning teams on a regular basis is an excellent way to understand and stay up to date with your financial world. Your team has the granular details of your wealth condition, which is important for you to check in with consistently in order to stay informed and make better financial decisions.
7. Habitual investing
For wealthy individuals, investing is a habit. Investing in a comfortable and sensible way that suits your funds and strategy should be a consistent practice. More importantly, think long-term; what amount and frequency can you commit to?
8. Establish short and long-term goals
One of the key wealthy habits is goal setting. Whether you’re planning for the next year or the next 10 years, your financial advisors should help you formulate clear-cut goals and ways in which you’ll achieve them. Knowing exactly what you’re working towards can help you stay focused and consistent with your approach.
9. Develop your financial knowledge
Staying informed and educated in your field is key to progress. Continuously developing your financial knowledge is an investment in your personal skills that helps you stay up to date with the business world. In turn, you’ll be in a strong position to continue making informed financial and investment decisions.
10. Take educated risks
Understanding your risk tolerance is vital when running a business or making investments. Risk will arise on more than one occasion, so it’s useful to find your comfort zone within it, and don’t be afraid of taking educated risks; do your research and surround yourself with the right people that can help you make an informed decision.
Growing your money with our partner Propiteer Capital
As discussed, making meaningful and consistent investments is vital to a successful wealth-building strategy, and investing in property is one of the most common way investors put their money to good use. Investing in a lucrative market like real estate can be an excellent way to grow your money over the long term; not only does property tend to appreciate in value naturally, but there are also ways to help boost your profits through methods such as property development or buy-to-let.
Our partner Propiteer Capital simplifies the ways in which you can enhance your wealth-building strategy. The Propiteer Capital Property Bond programme offers a passive and flexible way of benefitting from the UK property market. By investing in a single bond, their investors are exposed to three core asset classes that would normally only be available to commercial investors. These include trading residential assets, developing and trading branded hotels, and high-value built-to-sell developments. This means that you can optimise your financial plans by making a single investment and benefit from three areas of real estate, saving you valuable time that would otherwise be spent on choosing the right property.
All the developments within the Propiteer Capital Property Bond are high-end and based in cherry-picked, robust locations across the UK and Ireland. Finally, their flexible fixed-rate returns options enable you to easily plan your finances, so you’ll know exactly what returns you’ll receive and when they will be paid to you.
To find out more about Propiteer Capital and how their bond could help you enhance your wealth-building strategy, visit their website or contact our team on 01376 315740.
Recommended Read: How to Be More Wealthy: The Pillars of a Wealth Strategy