You have to become wealthy before maintaining or keeping it. To be wealthy requires certain action steps which must be followed strictly.
To be able to keep your wealth you are also expected to maintain that level of discipline you had when building your wealth.
It is not different. The wealthy understands that, for that wealth to be maintained, every penny spent must be accounted for. It is still the same, nothing has changed.
“When you are a business owner, you understand that every dollar spent – whether it’s a business expense or not – is going to affect your bottom line'” says Cody Shirk, an Investor, codyshirk.com.
Some who do not understand how money works often see rich people as frugal and stingy. They do not subscribe to spending money anyhow, they are always accountable.
“It’s incredible if you actually see how very wealthy people spend their money. They are often some of the most frugal people around. They will haggle with nearly every purchase, they’ll double check receipts, and they’ll try to save money whenever they can.
That’s not to say that they are afraid to spend their money.
It’s just that they know which expenses that will move their wealth forward, and they know when to make those big buys.”
When the wealthy spends money, he knows whether such expenses are adding up or not.
Cody asks how do they know that? How do they know when to spend money and when to save it?
“Through experience. Through trial and error. When you become truly wealthy, if you do not continue to practice the habits that got you there, you will lose everything.”
Some believe that it is a myth that the rich are frugal but the fact is that self-made wealthy and rich people usually use the “value” proposition to decide their spending.
However, if the rich finds something that is value for money, and providing that they can fund it without affecting their cash flow, they will go for it.”
Having the right education about finance definitely, play a good role in maintaining someone’s wealth. It is difficult for a dollard to keep track and maintain wealth without being properly educated, even if you think you can employ experts.
According to Richard Green, the CEO of RHG Enterprises, getting educated to take control of your finances is paramount.
“Take classes in accounting at the local university, if necessary, to understand a P&L and Balance Sheet. Ask wealthy friends to recommend a good lawyer, accountant, and estate planner. Interview them like you would an employee.”
Having a comprehensive insight about taxation is critical and could save any rich individual the hassles of paying too much tax. In fact, Warren Buffet brags that his secretary pays a higher tax rate than he does.
“How do you think the wealthy just keep getting richer? They don’t pay the same tax rate as the ordinary employee.”
