Your spending behavior may be one of the main reasons behind huge long-term differences in wealth.
Self-made millionaire Grant Cardone, CEO of Cardone Capital, and bestselling author of “The 10X Rule,” analyzes the hidden reasons behind The riches of the super richand discover that they all have 8 things in common that are both the motive and the reason for their continued rise in fortunes.
Cardone caught it after 20 years of trial and error before amassing a multi-million dollar net worth. Now, at the age of 64, he receives income from the 18 companies he has started and the 12,000 properties he owns.
Despite all this wealth, he wished to know the way to access it earlier, especially how rich people think about money.
“I have built relationships with many millionaires over the course of my investment career, and have spent years observing their habits,” he wrote in an article for CNBC, seen by Al Arabiya.net. Here’s what they do differently:
1. They don’t diversify their investments initially
It’s generally good practice to diversify a portfolio by investing in a mix of different stocks, funds and other investments, according to Cardone. But since the rich build their net worth, they often invest everything in their own projects, and then diversify their portfolio as they start earning more.
Elon Musk, for example, has put his entire $22 million fortune from the sale of his first company — an online business directory called Zip2 — onto his next business, an online banking service called X.com, according to the report. Al-Arabiya.net viewed it.
After merging X.com with PayPal, he made $180 million selling PayPal to eBay, and that money gave him money to invest in Tesla, SpaceX, and other ventures.
2. Religion is for corporations, not individuals
“When I built my wealth, I didn’t see debt on non-essential purchases like clothes or luxury homes,” Cardone said. “Even if I could afford the bills, I didn’t want to waste money paying interest. Instead, I wanted to invest whatever I was earning into making more money.”
Cardone confirmed that he was paying his purchases in cash, including the price of his house, and he never charged himself accumulated interest on the credit card.
And in some cases, if you’re trying to set up a business, according to Cardone, debt can help you make money by giving you access to income-producing assets sooner rather than later.
3. Homeownership isn’t always their first investment
While some believe that buying a home is the “American Dream” in and of itself, this is rarely what the wealthy see first.
Cardone believes that the return on investment from home ownership is often not equivalent to the return on investment in other alternatives, according to what was seen by Al Arabiya.net.
4. Income-generating real estate to protect and develop funds
On the other hand, income-generating real estate – both commercial and rental properties – is a great way to grow your money.
It also enables its owner to achieve periodic income without making any effort to do so, and it is often easier to sell it than selling a basic residence.
5. They always buy in bulk
Wealthy people are willing to spend more on each purchase in order to get a better price per unit of currency and save time spent on repeating useless activities.
This can apply to businesses, as wealthy people may contract to buy supplies or equipment in large quantities.
6. They invest in their network
“I have never been invested in by anyone who doesn’t know me. Most of the properties I own today were purchased from sellers who chose me over other qualified buyers because we had existing relationships and they had confidence in my ability to close the deal,” Cardone said.
The more someone gets to know you, the more they trust you and believe in your talents and skills. This leads to better opportunities, faster decision-making, and higher profit margins, according to Al Arabiya.net.
So invest time and resources in making and maintaining the right connections.
7. They never get enough
He asked Cardone, a friend of his who has contacts with many of the world’s richest people, what they had in common, to which he replied, “None of them were satisfied with what they’d already accomplished, but focused instead on the next thing that could be achieved.”
Rich people are never satisfied with their past achievements. They always believe they can achieve more. This helps them think big about future business ideas, inventions, investments, and the next wealth multipliers.
8. They don’t waste time trying to do everything themselves
Rich people know that time is the only truly scarce resource. “You can’t buy more of it.”
So they maximize their time by letting go of the need to control every little detail of their business or portfolio, and learn how to effectively outsource and delegate to good, smart people who will trade their time for money.
