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7 principles that rich people live by

By Chinkee Tan

People work hard to become rich. We all do. We want to experience the kind of life that rich people have and experience what it is to be financially successful.

For starters, listed below are seven principles that rich people live by. Achiev­ing what they have may be a long shot, but we always need to start somewhere, don’t we?

  1. THEY KNOW THATTIMEIS MONEY AND MONEY IS TIME

Time is the only resource that is nonrenewable. Once it’s used up, there’s no turning back time. The secret is to spend this limited resource wisely, that is, making the most of it and aiming for productivity because once time is lost, money too is lost.

Ever wonder how rich people can be time-conscious? It’s because for them, time is money and money is time.

  1. THEY TAKERESPONSIBILITY FOR THEIR FINANCES

To take responsibility means to rely on yourself when it comes to being in-charge of your finances. While advices from trusted financial smart people can help, financial decisions must ultimately come from you because no matter how smart they are, your own money is more important to you than it is to them.

After all, we wouldn’t want to end up blaming someone else for a money decision that didn’t work.

  1. THEY LIVETHERE’S NO TO­MORROW AND INVESTLIKETHERE’S FOREVER

They say life is short (insert what you love to do here). But it doesn’t mean we’re expecting to die tomorrow, as a matter of fact, chances are we won’t. We’ll probably end up with the rest of the population who gets to live the next 70-80 years of their lives.

So the bottom line is, we need to have something that will help us continue to live the kind of life we are enjoying now, or perhaps work on the kind of life we want to enjoy for the rest of our life.

The rich know this by heart that is why they put so much effort in setting aside money through saving and in­vesting. They know that the productive years are limited and they want to have something to enjoy once they reach their retirement years.

  1. THEY TAKECALCULATED RISK

Life in general is a risk. Choices are made available for us but we don’t exactly know the consequences of the choices we make.

And when it comes to money, taking risks could mean investing in stocks, property, or business that can go up and down in value. Fluctuations can be scary but the scare can also be worth

 

 

it when there’s a good return from the investment made.

However, the scariest part is when one takes no risk simply because the consequence that comes with taking no risks is no reward. Are you really sold out with the idea of money simply sleeping?

  1. THEY BELIEVE IN SIMPLE LIVING

People who have a lot of money don’t necessarily need to look rich. They simply don’t have to. They understand that being rich is totally different from looking rich.

They know that if they spent R5,000 on a shirt, that’s R5,000 that they could have invested instead. Of course we need clothes but maybe not that R5,000 shirt!

For people whose mindset is set on looking rich, they could end up just looking rich instead of being rich. What will you choose?

  1. THEY AVOID BAD DEBTS AT ALL COST

Debt is not the way to fortune-ville and never has it been. But people nowadays treat debt as something normal and they say we are already in debt even be­fore we were born.

But all these justifications do not change the reality that wheth­er it’s a good or bad debt, it’s still debt. It’s using money that we do not even have yet with the inten­tion of paying it later.

Unless borrowing money can make you richer, do not entertain the idea of getting into debt.

  1. THEY DON’T SPEND THE MONEY THEY DON’T HAVE

Ah, the notable line! It’s actually simple logic: Spending more than what we make causes a deficit, thereby causing an imbalance in the inflow and outflow of money. Getting the difference between the money we earn minus the money we spend is how we de­termine if we are truly rich.

Spending less than what we make gets us richer while spend­ing more than what make gets us poorer.

THINK. REFLECT. APPLY.

What does it mean to become rich? How do principles guide someone to achieve his financial goals? What other principles do you live by when it comes to your financial journey?

“Living on less than you make is a matter of controlling yourself, not a matter of math.” – Dave Ramsey

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