The Richest People Follow These 5 Money Rules. How Many Do You Know?

by Christy Bieber | Published on Sept. 4, 2021

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Well-dressed mature couple enjoying wine with a fancy meal.

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Follow the same rules rich people do if you want to become one of them.

Wealthy people tend to have a different attitude towards money than most of us do. In fact, there are a few money rules the wealthy tend to live by that others often fail to follow.

If you hope to become rich, you may want to adopt some of these personal finance rules as your own.

1. Develop multiple income streams

Most people who aren't rich have one income source: a job.

This makes them vulnerable to income interruption if they lose a position. And it imposes limits on how much they can earn, because a salary from an employer can only go so high.

Rich people, however, don't usually have just a single source of income. They may own or invest in multiple businesses, and earn money in many ways -- consulting, earning a salary, earning investment income, giving speeches, or serving on corporate boards.

If you diversify your income sources, you reduce your financial risk and can earn more.

2. Focus on growing wealth instead of looking rich

Many people who want to look rich buy big houses, fancy cars, or expensive jewelry. And sometimes, they purchase on credit.

While rich people do sometimes purchase nice things, they also know it is more important to build lasting wealth than to impress the neighbors. They prioritize putting money into investments that help them grow their net worth.

3. Use debt as a tool

Rich people aren't afraid of taking on debt, but they do it differently than many other Americans. Rather than using credit cards to buy groceries or charge vacations they can't afford, they leverage debt as a tool to grow their wealth.

For example, they may borrow to buy investment properties that earn them a steady rental income and help grow net worth as the properties rise in value.

4. Invest wisely

Rich people don't chase get-rich-quick schemes like meme stocks, or try to earn a fortune by perfectly timing purchases of cryptocurrencies that celebrities talk about on social media. Instead, they make informed decisions about investing in a diversified portfolio.

5. Take advantage of tax breaks

Wealthy people are famous for taking advantage of tax breaks. And while they sometimes get a bad reputation for it, there's nothing illegal about working within the existing framework to try to save as much on taxes as possible.

It's not just the rich who can use the tax code to their advantage, though. Everyone should understand the tax savings they can earn from being strategic about the investment accounts they put their money into, and increase tax savings by maxing out their tax-advantaged investing each year.

The good news is that these rules aren't impossible for the non-rich to follow. And if you want to become rich yourself, it can pay to start living by them.

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