“Let me tell you about the very rich. They are different from you and me.” — “The Rich Boy,” by F. Scott Fitzgerald. It’s true: Wealthy people manage their money differently from the rest of us.

I’m talking about the truly wealthy, the well-heeled, the haves, the 1%. Compared to peasants like you and me, they have entirely different ways of making, spending, and saving money. It feels like they have some secret knowledge from their wealthy bloodlines. Still, without owning their riches, you can follow their best financial practices.    Here are some ways to manage your money like a millionaire — without spending like one.

1. Invest automatically:—
Millionaires invest. Well-known billionaire and philanthropist Warren Buffett has popularized the “buy-and-hold” strategy many emulate. Followers of this strategy believe so strongly in investing that they do it as a matter of course. They do it long-term, holding onto their investments for years.

“If they buy good companies, buy them over time, they’re going to do fine 10, 20, 30 years from now,” Buffett once told CNBC.

We asked financial adviser James M. Matthews for advice on how we peasants can impersonate Warren Buffett. “Save early and often — and never stop,” said Matthews, managing director of Blueprint, a financial planning firm in Charlotte, North Carolina. “Many wealthy today started saving small amounts of money and   kept saving throughout the ups and downs of their careers and lives.”

2. Get help:—
Millionaires get professional help. The rich have flying squadrons of financial planners, tax consultants, and stockbrokers to work their voodoo and maximize their money.

“Outsource the things you’re not good at,” Matthews said. “Many successful people got that way by delegating the tasks to others for which they aren’t necessarily best suited, like handling their financial planning efforts. Delegating to a professional can help you   stay on track and avoid making expensive mistakes while you tend to your busy life.”

3. Take advantage of tax laws:—
Millionaires use the system to their advantage. They make sound investment decisions that factor in tax implications. They also funnel money into tax-free or tax-deferred funds like IRAs, 401(k)s, or college 529 plans.

4. Invest in real estate (no, you don’t need millions):—
Millionaires own stuff. They diversify their portfolios. They invest intangible assets like real estate that can produce income and grow in value over time. A “tangible asset” is something you own that has a physical form. This covers everything from land to gold bullion to your cousin’s beat-up used Honda Accord.

Matthews said diversifying your assets is a way to hedge against risk because the value of tangible goods is separate from the fluctuating value of the stock market.    Matthews said the key is not putting all your eggs in one basket. Owning real estate has real benefits.

5. Know your way around credit and debt:—
Millionaires know how to use credit and debt to their advantage. For instance, someone accustomed to dealing with large sums of money might feel more comfortable getting a short-term personal loan to start their own business. Or more comfortable picking up a second mortgage to acquire some rental property.

6. Keep your eyes peeled for a good deal:—
Millionaires can be surprisingly frugal. They’re not necessarily big spenders. They live below their means so they can save and invest the difference.  It’s like my father always used to tell me: How do you think they got rich in the first place? To research the affluent, sociology professor Rachel Sherman interviewed 50 wealthy people who either worked in finance or had inherited millions.

“The people I talked with never bragged about the price of something because it was high,” Sherman wrote in the New York Times.

“Instead, they enthusiastically recounted snagging bargains on baby strollers, buying clothes at Target, and driving old cars. They critiqued other wealthy people’s expenditures.”

7. Crack a book:—
Millionaires read, and not just for pleasure. They read to gain information.    And you’re doing this right now! Yaaay, you! You! You! You! You! You!(For the full effect, imagine a crowd packed inside a sold-out arena, chanting, “You! You! You! You!”) Self-made millionaire Steve Siebold interviewed more than 1,200 of the world’s wealthiest people over three decades. He noticed they all had one thing in common: They were self-educated by reading.

“Walk into a wealthy person’s home, and one of the first things you’ll see is an extensive library of books they’ve used to educate themselves on how to become more successful,” Siebold wrote in his book, “How Rich People Think.”

Courtesy: Business Insider

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