Concepts for Getting Rich

Rich people tend to understand concepts that makes getting rich easier.

Wealthy people are not all just luckier than everyone else. They aren't all just in the right place at the right time.

That doesn't mean that there is some magic formula for becoming wealthy. But by seeing the world the way many wealthy people do, you can begin to make decisions that will improve your financial situation.

The first wealth concept you must understand before getting rich is to set priorities. What is important to you? Because once you have a clear idea of what is important to you, you can begin planning how to achieve your goals.

I recommend sitting down and listing out all your goals in life. Then go back and put them in order of importance from top to bottom. Then you can set out achieving each of these goals.

Be specific when writing down your goals. And don't limit these to items you want to own or places you want to go (although both should be included.)

Instead add things you want to achieve in your career or in your life. Don't be afraid to be ambitious but also be realistic. If you are a U.S. citizen and your goal is to be president of Brazil, you may be setting unrealistic goals.

On the other hand, if you work for Intel and your goal is to be the CEO of Intel, it may be unlikely but it's worth trying. Even if you don't make it to CEO, you may go much farther than others.

You may find that to achieve one of your top goals, you have to give up some of the lower ones. You will also find that your goals will change over time. Don't think yourself a failure for not achieving every goal. But also don't give up your goals before you've put any real effort into achieving them.

For example, many people set out to get a job at a particular company. They go to the Human Resources Department, they ask for an application and they turn it in. They may even make a couple of phone calls to follow up on the status of that application. When they don't hear back from the company, they give up and change their goals.

If you really want to work at that company, you have to try harder. Offer to take current employees to lunch and find out how they were hired. Ask them to give you a reference. Call managers and ask what qualifications they are looking for. Make sure you have those qualifications and if you don't, go get them.

The point is that if you want something bad enough, you must be willing to go farther than others are.

My top goal right now is to raise my three children. That means postponing some of my other goals for a while but that doesn't mean I am giving them up.

Traits of Wealthy People

1)Wealthy people work harder than the others in their profession.2)Wealthy people live off less than they make.3)Wealthy people make intelligent choices about their money.

One thing that the overwhelming majority of wealthy people have in common is that while getting rich, they almost always worked hard. This is one of the most important wealth concepts.

On average, millionaires in the United States work between 45 and 55 hours per week. That’s in contrast to the rest of the population that works less than 40 on average.

It doesn’t matter what line of work you chose for yourself. If you do 25% more work than anyone else in your profession, eventually you will have more money than most of the people in that profession.

That is partly because people who work hard tend to earn more. The other part is that while you are working, you are not out spending money and decreasing your wealth.

A popular buzz-phrase these days is that people say they want to “work smarter, not harder.” People that use this phrase are typically not the top earners in their profession and they're usually not getting rich.

If you can do 10% more work than others in the same amount of time, think of how much more you could do if you spend 25% more time. Successful people work harder early in their lives so they won’t have to work hard forever.

The second trait is that wealthy people live off less than they make. This is another important wealth concept.

It doesn’t matter if you make $10,000 or $900,000 per year. If you can learn to live off less than what you make getting rich will become easy because the remainder of that money can be saved and invested in working assets.

Understand, that doesn’t mean you can’t spend most of the money you make on your day to day life. It just means you can’t spend it all.

These wealth concepts are not designed to make your life miserable. They are made to help you achieve your financial goals and thereby increase your happiness.

The more you make, the greater percentage of your income you should save. But you need to pick the place that you are comfortable.

The way most people live, they save a tiny percentage of their monthly income only to spend all that savings the second their car breaks down or they need to take a trip.

The longer you keep money in savings, the more time it has to grow and compound and work for you. That's the time value of money , another important wealth concept important for getting rich.

If you can't learn to live off less than you earn, you will waste one of your most valuable assets: time. And effective use of time is key to getting rich.

I recommend monitoring your budget to see where you are at.

Next, wealthy people make smart decisions with their money. That means understanding the difference between working and non-working assets.

It also means planning for unforeseen events like loss of a job or health problems. It means understanding the value of education and what that education can and can't do for you. It means understanding the difference between what you want and what you need.

It means understanding how money and relationships can work together or can destroy wealth.

And it means understanding that the opportunity cost of buying one thing is the whole list of other things you could have bought. Opportunity cost is the final wealth concept. That doesn’t mean you shouldn’t buy it, only that you should understand what you are giving up.

Wealthy people understand not only how to make decisions that grow their wealth but how to avoid having their wealth destroyed. That means effectively managing risk. It also means minimizing the destructive forces of taxes and inflation. By understanding how each of these concept affects your financial situation, you can begin to make decisions that will make getting rich seem simple.

Finally, once you have built wealth, you must understand the concept of estate planning if you want to preserve that wealth for future generations.