Don’t Hate the One Percent - Learn From Them Instead

It’s easy to dislike, or be a little jealous of, the uber-rich. While we’re not saying they’re all saints, or that there aren’t inherent privileges at play, learning from the wealthy is actually beneficial for your wallet. According to a survey of nearly 700 high-net-worth investors, the very rich have financial habits they universally share. And you know what they say - if you can’t beat them -  join them. Here are the one percent’s best-kept secrets.

 

  • A long-term vision goes a long way.

A whopping 85% of high-net-worth individuals say that buying investments and holding onto them for many years brought them the biggest investment gains. This is known as the ‘buy-and-hold’ strategy. Watching the market too closely may lead to brash decisions, resulting in monetary losses. And since Warren Buffett supports this strategy, it’s bound to be sound, right?

 

  • Taxes, optimised.

What really counts is net-pay - money you are netting after taxes. Bad tax-management decisions can lead to immense losses, so it’s always worth getting advice from a professional before leaping into any decisions. For example, if you’re a small business owner investing in innovation, you’re eligible for R&D tax credits. There’s all sorts of tax perks out there - make the most of them.
 

  • Tangible assets are your friend.

Around half of high-net-worth investors say that they invest in tangible assets, like real estate and farmland. It may also be worth considering investing in art, although it’s a little riskier than real estate. Do keep in mind that diversification is important - never put all your eggs in one basket.

 

  • Keep a note of your goals.

Richard Branson emphasised that if he didn’t take notes of his ideas and goals, they would likely get lost. And, thanks to a range of savvy apps, you no longer have to carry a pen and notebook to do so. So the next time you have an ‘a-ha!’ moment, make sure to put it in writing and revisit it later.

 

  • Inheritance can be a deterrent.

A surprisingly vast number of high-net-worth individuals are entirely self-made. Don’t believe us? Here’s the stats to back it: only 24% of the the very-rich inherited money from their parents. The rest came from either poor or middle-class backgrounds. Passion, determination and a long-term vision can well and truly go a long way.

 

Credit image: Unsplash / Ishan @seefromthesky.