Ever wonder why the rich are rich? Do you have visions of extravagant lifestyles?
Perhaps you are on the rise to affluence, or just landed that dream high-powered high paying job, or are an expat with a very healthy expat salary package. Wonder how affluent people manage their money and lead comfortable lifestyles?
You will be surprised by some of the practical and even frugal principles that many live by.
- Live below your means – You’ve arrived and of course you deserve to spoil yourself and your family. But remember you want to preserve your wealth for the next 50 years. The key is to live comfortably below your means. Bill Gates still wears $10 watches even though he can afford hundreds of Rolexes. By all means, buy yourself a Rolex if you really want one, but it’s all about balance. Don’t buy cars or properties that you can’t afford. Consider the maintenance and running costs of a super car or a large estate.
The extra cash available should be invested or saved for emergencies. Life is a marathon and you need to be consistent with your lifestyle of saving and investing.
- Pay off high interest debt and avoid new loans other than a fixed rate mortgage – Before you go on a spending spree, you might want to consider getting your debt sorted first. Debt consumes a large portion of your disposable income and you end up paying high interest. Being affluent, it’s easy to get more credit now, but resist the temptation. Pay off bad debt and you will be surprised how much you can save a month.
- Be responsible. Don’t think you are a savvier investor than you really are – you worked hard to accumulate your wealth and must be doing something right but, avoid make financial investments on your own. The latest investment fad might not be the best for you. Use qualified professionals who are knowledgeable and experts in finance. It’s always good to have an accountant, lawyer and financial adviser administer your personal wealth.
- Don’t forget low fee index funds – don’t get carried away with fancy funds that have big promises and high fees. Nothing beats a low-fee, well diversified index fund. After all, Warren Buffet can’t be wrong. It’s good to include Index funds into your portfolio that have a track record of delivering consistently good returns over the long term. Having a diverse portfolio is key, as it mitigates your investment risk. Consult your financial adviser when you want to diversify your investment portfolio into stocks, alternative funds, and real estate.
- Give generously to charities – The wealthy might have made their money by being savvy businessmen, but they always donated their time and money to good causes and charities. *
Wealth is good but quality of life is just as important.
Your deVere acuma adviser will help you set a comfortable budget for your new lifestyle taking into consideration your income, investments, and financial needs. [email protected]
Please note, the above is for education purposes only and does not constitute advice. You should always contact your deVere Acuma adviser for a personal consultation.
* No liability can be accepted for any actions taken or refrained from being taken, as a result of reading the above.