5 money lessons from the world’s wealthiest
Those who have acquired and maintained wealth have been able to do so because they do things different from everybody else. You can learn invaluable lessons about money from listening to them or observing their lifestyles. PHOTO | FILE
What you need to know:
- Billionaire Mark Zuckerberg made news when he refinanced his US$6 million mortgage on his home four years ago. Why does he need a loan with all that money?
- Making money, on the other hand, requires skills like boldness, passion and the ability to sniff an investment opportunity ahead of everyone else.
- While a middle class earner will borrow to buy an expensive car to appear rich, a rich person is likely to buy a car that meets his needs, not necessarily the most expensive.
Those who have acquired and maintained wealth have been able to do so because they do things different from everybody else. You can learn invaluable lessons about money from listening to them or observing their lifestyles.
Here’s a look into a few of these lessons:
1. Diversify.
When it comes to money, the saying that you shouldn’t put all your eggs in one basket applies. While he is known for his record label, American rap mogul Jay-Z for instance, has diverse investments. He owns a clothing line, an arena, an investment in an NBA sports team and a nightclub, amongst other investments.
2. Do not be afraid of loans.
Billionaire Mark Zuckerberg made news when he refinanced his US$6 million mortgage on his home four years ago. Why does he need a loan with all that money? Many wondered. He is clearly not afraid of debt because he can differentiate between good and bad debt. While bad debt is a liability, good debt will either increase your net worth or give you tax exemptions. Instead of shying away from debt, you just need to learn the difference between the two.
3. Being book smart is not enough.
Billionaire Richard Branson who is dyslexic and who struggled in school before eventually dropping out at age 16 is proof of this. School mostly requires you to have a good memory. Making money, on the other hand, requires skills like boldness, passion and the ability to sniff an investment opportunity ahead of everyone else.
4. Having a small income shouldn’t stop you.
Investor Robert Kiyosaki said it all in his famous quote: it isn’t how much you earn but how much you keep, how much it does for you and how many generations you keep it for. This means that having a small income isn’t an acceptable excuse for not having investments.
5. Not spending is the same as making money.
Perhaps because they are already confident in their money making abilities, the wealthy hardly buy things to make statements.
For instance, while he is considered the second wealthiest person in the United States as of March 2017, with a total net worth of US$78.7 billion, businessman and philanthropist Warren Buffet still drives the same car he bought 50 years ago. While a middle class earner will borrow to buy an expensive car to appear rich, a rich person is likely to buy a car that meets his needs, not necessarily the most expensive. This way, they have more to invest in income generating ventures.
