How are the rich doing it? This is a question that’s asked by virtually every other person across the nation at some point or another. Do they save every penny and eventually have enough of them over the years to propel them into the wealthy status? Do they spend their money to achieve all of this great success? These are the million-dollar questions everyone wants to know.
In truth, the answers to these questions are just as diversified as the people inquiring them in the first place. Some have inherited their wealth stemming from generations before them. Others have gotten lucky through various stock market plays, or lottery type winnings. However, a bigger majority of the wealthy have in fact done a combination of healthy savings and smart spending decisions. This combination is also a good starting point for anybody who’s serious about changing their tax brackets, and eventually graduating to the wealthy class. Another way rich people make more money is by ensuring that their money kept in the best fixed term savings accounts.
The first thing to take a look at here is savings. Most people have a huge misunderstanding about these accounts, and how it should affect their personal finances. It’s important for people to realize that savings alone is hardly going to make them wealthy. Instead, saving money should be looked at in short term goals. Most people will never be able to put enough money into their savings accounts nor fast enough to benefit from interest against inflation. In other words, their money will never grow that way, and could even shrink during tough economic times. That’s why savings should serve a different purpose early on.
A savings account should be viewed upon as more of an emergency fund. In fact, many suggest having a least six months’ worth of living expenses in savings at all times. Should an emergency arise, this fund can be used towards this situation and then be replenished again as quickly as possible. In a time where jobs are scarce this also hedges against any sudden loss of employment. Outside of that, there is little use for a standard savings account.
Therefore, don’t be fooled. The wealthy aren’t just putting everything they have into some savings account. They are also big spenders. The difference is they are often spending money on things that make them more money in return. Outside of reserves, money is much better spent investing. This can be anything from owning gold, stocks, real estate, or even starting a business that employs other people while returning a healthy profit. The reason why they spend their money like this is because the return on these investments can actually get out in front of inflation unlike a savings account, and in some cases be way out in front of it.
It’s not really much of a secret the rich have over everyone else. It’s all about being smart with money. Shoring up savings for the short-term, and investing for the long term will help anybody get started down the path of great fortune. A popular bank for rich people is Birmingham Midshires Savings. It might be worth checking out.
Written by Jon the Saver
