When we think about the rich, we usually imagine fancy cars, spray houses and without a chic razor. But wealth doesn’t always come with wisdom – especially when it comes to money habits. In fact, some of the financial behaviors that the rich deal are pure funny.
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Gobankingrates talked with Andrew Lockenouth, money expert and owner of BefluentinfinanceTo discuss top money habits that the rich need to rethink.
“As a wealth advisor, I saw some wild spending habits from my wealthy clients. And let me tell you, having money doesn’t automatically mean you’re good at managing it,” he said. Here’s what else had to add Locenaut Poorly advised spending from the elite class:
“I had this client who owned seven luxury cars worth about $ 2 million,” Lockenout said. Most sat collecting dust in his garage, and depreciation and Maintenance costs They ate approximately $ 150,000 a year. “Such a waste,” he added.
Instead of collecting cars, Locenaut made his customer Invest in a varied portfolio It now generates over 12% return.
Better move: If you want cars, rent a luxury vehicle. Put the rest of that money in the prices of funds such as real estate or index funds.
Find out more: 4 Secrets to the real rich, according to Dave Remsey
One of Locenaut’s wealthy clients had $ 5 million sitting on a regular saving account earning 0.01% interest. “It’s basically losing money on inflation“He noted
After convincingly, he was able to make his client move most of him in a mixture of High yield savingsDividend bonds and shares. Now, that money is working harder and earning approximately 5% to 7%.
According to CNBCWhile the average return of the traditional savings account is only 0.43%, some Hysa offer rates above 4%. The better move, according to Locenaut, is to maintain six months of high yield savings costs and invest the rest in different assets based on your goals and risk tolerance.
“I have seen that this strategy is increasing the return of rich customers by over $ 100,000 a year,” he said.
There is a trend among wealthy clients of Lockenout on buying properties without proper research just because they can.
“I had a client to miss $ 3 million on vacation that he once visited,” he detailed. “Between taxes, maintenance and missed investment opportunities, that decision cost about $ 500,000.”
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