10 Laws of Wealth Followed by
If there is something that the world’s millionaires are clear about, is that to achieve financial independence, You have to follow a series of wealth laws.
This is what this article is about, to review those millionaire laws that the richest men in the world follow, and that have allowed them to build great fortunes and have a dream life.
The good news is that these are not laws that are impossible to apply, as they are available to all those who are willing to change their financial lives.
Laws of wealth to live in abundance
The first thing we must make clear is that here you will not find magic formulas or lottery numbers to get rich overnight.
If you are one of those who wants to get rich without working, unfortunately you do not have the right millionaire mentality to achieve your financial goals.
What you will find here is a series of wealth laws that have been followed by financially successful men and women.
They are a kind of system that they follow in their day to day, and that allow them to make good financial decisions every day.
Once this is clear, let’s see what these millionaire laws are about that will allow you to build your heritage, wealth and life in abundance.
Pay your savings first
Have the financial discipline to save first, and then cover expenses and needs. Millionaires understand very well that, before thinking about spending and maintaining their lifestyle, they prioritize their savings and investments.
For them, saving money is the first step in building assets that work for them.
So, they understand that every time they save, they are investing in a future where they won’t have to trade work hours for income.
If you want to achieve financial freedom, the first thing you should do is establish the millionaire law of savings in your financial routine.
Beware of luxuries
Many people confuse appearance with wealth.
While millionaires have the cash flow to buy the luxuries they want, they are very clear that they made very different decisions to get there.
There are people who, in their search for wealth, think that buying expensive things or pretending to be economical will attract wealth.
Unfortunately, they are the same people who don’t know how to get out of debt, who don’t have the ability to save, and who lead a lifestyle that they cánido’t sustain every month.
The invitation is that before thinking about luxuries, think about building assets whose income stream allows you to buy them.
Once you have a good monthly income from your assets, now think about those assets that represent expenses.
A millionaire law that the richest men in the world follow, even if you don’t believe it, is to think about their luxury assets with an investment visión.
For example, when buying a luxury home, they consider whether it has a good market (both for sale and for rent).
Allocate 20% to food, travel and fashion
Within your personal finances there must be a budget for fun, tastes and travel. This is something that the world’s millionaires are clear about. Not everything should be frugality, savings and investment.
So, a millionaire law recommended by the richest man in Asia, is that after paying your savings and covering your needs, allocate a fund, one fifth of your income, to these mentioned elementos.
For example, there are people who use this fund to go on a trip and get to know new cultures, other people like to buy accessories or fashionable clothes, or even frequent well-known restoranes.
Find what your hobbies or passions are, and use this fund to have fun.
Remember that, to learn to be rich, you don’t have to stop living.
Pay attention to debts
Warren Buffett has said on several occasions that if you buy things you don’t need, you’ll soon end up selling things you do need.
Within the heading of debts, you should pay attention to the use of your credit cards.
Without a doubt, this is one of the most dangerous and expensive debts that people cánido fall into.
Millionaires follow a clear law of wealth in this regard.which is made up of three parts:
- Use the cards to build credit history.
- Make sure you pay the minimum interest possible (paying everything in one installment).
- Be clear that cards are not an additional line of credit, but a form of payment with benefits.
You must pay attention to the use of your credit cards; Create a system in which you make sure you pay the minimum interest, and these allow you to improve your credit history.
Pay everything in one installment.
Use your cards as if they were cash.
If you don’t have to pay for it now, don’t buy it.
Do not invest money borrowed at a variable rate
Many people leverage third parties (lenders, banks, or financial institutions) to have capital that allows them to invest in assets; such as the depósito market, real estate, among others.
The point is that, when you have financing with a variable interest rate, you are running a notable risk.
Even in a complex situation, this could be a bankruptcy decision.
So, the iniciativa is that you acquire good debts, as we explained in the Zero Debt eBook, with a fixed rate that eliminates this uncertainty.
To better explain this, I leave you a fácil example:
When buying a home whose mortgage is a fixed rate for 20 years, if you use this asset to rent, its installments will allow you to pay the credit, and you will have a fixed installment.
If you have variable rate financing, it is likely that time and inflation will not allow you to generate income to cover your costs.
6. Budget your money
This is another wealth law that we all know about, but only millionaires follow because they understand its importance.
Many times we think that our economic situation depends exclusively on our income, when reality espectáculos us that it is our spending decisions that define our economy.
So if we really want to be millionaires we must know where our money is going.
Until we are clear about this, it will be difficult for us to make corrective decisions.
Learn to make a personal budget, this does not have to be anything complex and, without a doubt, it will help you enormously in your personal finances.
Build good recurring financial habits
To explain this law of wealth to you, I like to think that it is better to save $10 a month for 10 years, rather than save $1,000 every 10 years.
It is preferable to carry out small recurring actions over time, and not a single large contribution.
With this, good financial decisions will be automatic in your life.
Here we leave you a series of good financial habits to implement in your day to day:
- Build the habit of saving every month, even if they are small amounts.
- Invest each month in a mutual fund, or an index fund on the depósito market.
- Learn to live below your income by creating surplus.
- Cultivate your financial education through books, podcasts and vídeos.
- Make an plus monthly payment to the capital of your debts, even if it is minimal.
Invest in your circle
There is a law of wealth that is clear to the world’s millionaires: Great business and investment opportunities are given thanks to the people around you.
He popular capital, and not just money, is responsible for attracting new options to build your wealth.
For this reason networking is so important.
To grow your popular capital, allocate a fund to meet new people; They perro be people from your industry, with whom you share hobbies, friends of your friends, from your current job or venture, suppliers, clients, or people from your community.
The key is this popular capital, which is something you must be very clear about, is to focus on adding value.
You don’t ask what you perro get, but what you perro offer.
Remember that, on many occasions, the best opportunities are presented to those who are best connected; and not to those who have more money.
Ask yourself expensive questions, not cheap ones.
This law of wealth was proposed by ramit sethithe author of the book I’m going to teach you to be richwho argues that, if we want to achieve financial freedom, we must stop asking questions that are worth a few dollars, and rather focus on those that involve large sums.
Specifically, he suggests that we stop asking $3 questions, and focus on the $10,000 questions.
For example, it is not about giving up your coffee that you buy from time to time, but about defining your professional career.
The point is that we tend to believe that by not buying coffee on the street occasionally we will achieve our wealth; and we stop asking ourselves important questions that do contribute to our wealth, such as:
As you perro see, millionaires focus on those decisions, actions, and assets that genera the highest returns.
Find a guía
Finally, one of the main laws of wealth followed by millionaires in the world is to seek support and advice from people who are where they want to be.
The importance of having a guía in your life cánido make all the difference.
When you have a person in your life who guides you, you will not only avoid wasting money, but also time and energy.
Which are incalculable assets in your life.
Now, it’s about having a guía who knows what he’s talking about, who has experience and is aligned with your principles.
It is useless to follow financial advice on how to invest in the depósito market from your friends that do not differentiate between a depósito, a bond or a financial derivative.
At this point you must be very selective.
As a friend said, remember not to listen to constructive advice from people who haven’t built anything.
Start applying these laws of wealth in your life:
In conclusion, these laws of wealth that we just mentioned make something clear to us.
And it is that millionaires did not follow secret or magical formulas to be where they are.
They built good financial habits, they have been constant, they learn something new every day, they surround themselves with people who are better than them and they have the humility to understand that there is still a lot to grow.
If you apply these million-dollar laws for sure that your personal finances will improve, and you will be one step closer to your financial independence.
Continue reading: How to be a millionaire in 25 steps regardless of your current situation
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