It’s no secret that the truly wealthy live differently than the average person, says wealth advisor Dwight Dykstra. But that doesn’t just apply to their vacations, expenditures, and everyday lives. Wealthy people tend to handle their money differently than the rest of us. And while we all dream about living like a millionaire, most people just aren’t willing or able to make the changes necessary to build real wealth.
But that doesn’t have to be the case. Use these tips and tricks from a wealth advisor to handle your money as the wealthy do. Remember, building wealth is just like building strength–it requires constant, daily discipline and effort. But for those who follow through, there can be amazing results.
Diversify Your Portfolio Advises Dwight Dykstra
This is a basic investment principle that is vital to your long-term financial success, says Dwight Dykstra. Diversification protects your assets from fluctuations in any one sector, while also presenting opportunities for growth.
Stocks and bonds are a great place to start, but there are so many other investment opportunities available that wealthy people tend to take advantage of. The average person can absolutely afford to do the same, they just don’t always have the same financial education or information readily available to them.
Real estate, REIT funds, commodities, art, and private equity can all give you excellent returns while diversifying and protecting your financial portfolio. Talk to an experienced financial advisor about your options.
Spend Less and Save More
This may seem incredibly obvious, but the less money you spend the more you have available to save and invest. Wealthy people tend to become–and stay–wealthy because they don’t spend frivolously.
While they may make purchases that look frivolous to the average person, when those purchases are within budget, they can actually be perfectly prudent. After all, if you make $1 million per year and your monthly budget for clothing is $5,000, a $1,500 dollar purse may be a bargain rather than a splurge.
It’s all about sticking to your budget and finding ways to save. No matter how much money you make, there are ways to cut back and save more, says Dwight Dykstra. A cheaper apartment, less eating out, fewer online shopping binges… Whatever it takes, just do it, invest the money wisely, and watch your nest egg grow!
Eliminate Consumer Debt and Then Avoid It Like the Plague
In 2021, the average credit card has a 15.91% interest rate, according to Business Insider. If you have $10,000 in consumer debt, you’re paying $1,590 per year in interest alone. If you’re making only the minimum payments on your debt, it could take you decades to pay off $10,000 and you’ll end up paying more in interest than the amount you borrowed!.
Having a high debt ratio can also negatively impact your credit score. And the lower your credit score, the higher your interest rates, making it even harder to pay off the total. It’s a vicious cycle, says Dwight Dykstra–one that wealthy people don’t allow themselves to get caught in.
Pay off your consumer debt as quickly as possible and avoid it like the plague to make sure you retain your hard-earned wealth.