How Do The Wealthy Invest Their Money

9 Money Habits Of The Wealthy You Need To Know

Have you ever wondered why certain people are so wealthy? Or why some groups of people seem to flourish more than others?

I bet you think, for the majority of them, they have inherited their wealth. Or were born into a rich family. Or have a very well paid job?

But here's what I found:

That yes, for some the above is true. Yet, it has less to do with a silver spoon, luck, and hard work. But more about the key money habits of the wealthy that help them build extraordinary wealth. And if you will take a closer peek you will see that it's these habits that the wealthiest people share. Money Habits of the wealthy you too could take up.

Let's dig further, but first let's explore the following.

Could I get wealthy by working a single 9-5 job?

A few years ago I asked myself how I could get wealthy? How could I be financially free?

Could I ever pay off my mortgage before I was due to retire? Or was I bound to work way into my 70's so I could continue to make the repayments?

At this point, my prospects weren't looking good.

Why?

Well, all I was doing was working your standard Mon- Fri, 9-5, and working for someone else. And of course, there is nothing wrong with that.

But I immediately realised this.

If you want to stop work sooner than age 70 and enjoy a good standard of living, you need to do something different.

What's the 'something different'?

Well, it's not going for a promotion or getting a second job. Because even then, your prospects could remain the same.

So after some research and reading it dawned on me that earning more money by working for someone else was NOT going to make me wealthy and experience financial freedom!

That was a real eye-opener.

Besides, the chances are if you earn more, you are likely to spend more and the vicious cycle continues. It's about escaping that vicious cycle and rut.

This is why it is important to learn from those who are in positions you want to be in and start to take on their behaviour.

What do they do differently? Could you take a leaf out of their book and experience a different outcome? After all, these habits are working for them, so chances are it will work for you also, right?

So what are these money habits of the wealthy?

Let's venture in and find out!

Some of the links below are affiliate and/or advertising links. This means I may receive a payment or some form of benefit if you click through and make a qualifying purchase or complete a sign-up process. These links help to keep this blog running. So, thank you!

As an Amazon Associate I earn from qualifying purchases.

8 Money Habits Of The Wealthy

They don't Have Debt
They have Financial Goals
Commit to Investing Money Regularly
Have and Stick To A Budget
They Spend Money To Make Money
They Create Passive Income Streams
Live Well Within Their Means
Put Their Money Away Immediately
Give Generously

#1 Wealthy people don't have debt

I have to get this one out first. Why? Because so many people have some debt of some kind. Some people think this is a normal way to live. It might be society's idea of normal but it's not.

You cannot be wealthy with debt looming over your head

This includes credit cards, overdrafts, loans and dare I say it – a mortgage.

I will just touch on mortgages for a second. This is somewhat an acceptable debt because the value of a property would normally go up. ( I have to say it could go down also!)

So if you work to pay it off sooner, the better it would be for you. The aim is to turn your home from a liability to an asset.

Do you know that if you pay just one extra mortgage installment a year you could knock years off your mortgage term?

To be wealthy is to experience financial freedom. You can't be free if you are in debt. This proverb says it plain and straight:

"…the borrower is the slave of the lender."
Proverbs 22:7

Until we pay off all debt we are a slave to the lender. I don't know about you, but I don't want to be anybody's slave.

The goal is to clear off mortgage debt. If this is your goal also, then I'm cheering you on. We can do this!

Speaking of goals…

#2 Wealthy people have financial goals

Wealthy people know how much to set aside as they would have established a plan for their finances. This will be according to the goals they have set.

Most wealthy people will tell you that they have invested at least 20% of their income (between savings and investment products).

Setting a goal to save at least 20% will give you a better shot at financial freedom. This figure will likely see you reach the financial milestones of the wealth that you desire.

If saving 20% is a stretch right now then save whatever you can and build the figure up. Something is better than nothing.

Sometimes it can be difficult to save enough money that would make a significant impact on your future. There can be other things that take your money before you even get a chance to save any of it. But saving is important.

So if you want to escape the struggle in your retirement then check out my post: How Much Should I Save Each Month? And see what you can do to secure your future.

#3 Wealthy People Invest early on and regularly

Do you want to work for money? Or wouldn't you much prefer your money to work for you? Then habit #3 is right for you.

Wealthy people invest their money wisely and do it regularly to create wealth. They also start investing early.

When you start investing early on in your life you will have the benefit of time. Time is the catalyst to make your money grow.

This is key to have your money work for you.

I know events like getting married or having children is a reason why you may stop or never start making investment choices. And I get it, the budget is tight already.

But you can't afford not to. Here's the thing:

>>To get the most out of investing is to do so early and regularly. <<

Then over time, you will reap the benefits.

READ THIS RELATED POST : When Should You Start Investing? (For A Brighter Future)

Even saving a small amount should not be despised. It all adds up.

Where do the wealthy invest their money?

I often hear this question: "what do millionaires invest in?"

It's a question non-wealthy people are curious to know the answer to.

What's the 'secret'?

I'm probably going to disappoint you now. But the secret is this:

It's less about where do the wealthy invest their money and more to do with how they invest.

Going back to the title of the section, I've already stated two ways on how to invest. Regularly and to start early on.

But before you can do that, you first need to understand what it is you're investing in.

Because the key point in how to invest is to invest in what you genuinely are interested in and what you understand.

Research, research and research some more.

You also need to play into your strengths. For example, if you struggle to get your head around the ever-changing world of technology and its advancements. Then you should not be investing in this area.

Even if your best friend swears by it. If you don't understand it, stay away.

Because understanding the market you want to invest in helps you when it comes to making buy/sell decisions.

Another key way to invest is to look at the numbers, facts, and information. Will putting money into this venture likely return the right results?

Wealthy people do not go by total hearsay. The rich analyse the information before they dive in.

But with all that being said, there are some typical areas the ultra-rich invest their money. They are (not an exhaustive list):

Property
Stocks and shares via the stock market
Shares into businesses directly (think dragons den the tv show)
Savings
Gold
Fine Art

Wealthy people invest in themselves

The most important thing you can invest in is yourself! Wealthy people never stop doing this. It's a must.

You invest in yourself by reading, learning, and growing. The moment I began reading books to help me understand money and the best ways to manage it, my whole outlook changed.

Invest in books to help you think like the ultra-rich. Books like Rich dad, poor dad by Robert T. Kiyosaki was the first book that opened my eyes to the money habits of the wealthy. If you haven't already, you most definitely should grab yourself a copy. It's fantastic and will totally transform your mindset.

You also invest in yourself by being with like-minded people. Even being around people you inspire to be like is great too.

Beginners tip to investing

But if investing is new to you then a good place to start investing would be to open a Stocks and Shares ISA.

Investing in stocks and shares through an ISA more straightforward than investing into businesses directly.

You can choose to invest a lump sum or set up a regular savings plan that fits your financial goals.

You can also drip-feed your money in over time to reduce risk.

A Stocks and Shares ISA is tax-exempt. But with a Stocks and Shares ISA you put your money into a range of different investment pots.

There are many Stocks and Shares ISA you can choose from. I like the Shepherds Friendly offering as you can save as little as £30 each month. Making it easier for you to save your money.

Shepherds Friendly have been paying a 3% bonus on money invested in this way for the last 9 years. That is quite impressive! Especially when you compare it to the poor interest rates offered by banks on most savings accounts.

Investing your money produces a higher return on your initial investment than it would from a regular savings account.

I have been saving into a cash ISA for the last 15 years. And into a Stocks and Shares ISA for the last 3 years. And I have been seeing my money grow quite substantially which is great.

Investing is one of the best things you can do to obtain wealth.

Discover here how you can do more to secure yourself a better future.

#4 Wealthy People have and stick to a budget

Yes, wealthy people have a budget.

Do you want to know how to manage money like the rich? Again, it's via a budget.

Budgeting is of utmost importance. Wealthy people are so because they know exactly what's coming in and crucially what's going out. They tell their money where to go. And you can too.

I have an easy and simple budget you can swipe here for free. It also includes an expense tracker to help you stay on top of your money.

Do you need help with creating a budget and sticking to it for ultimate results? Then, check out my simple useful budget guide to walk you through creating a budget.

See more savings and master your money in no time.

#5 Wealthy People spend money to make money

Wealthy people buy or invest directly or indirectly in things that will also bring about financial return.

Directly would be investment products, starting a new business then selling it, and other things that will increase in value. (refer back to #3)

Indirectly might be to spend their money on things that will help with their productivity. Like technology, software, assistants, staff, office equipment, courses, and books, etc.

Anything that will bring about a return on their investment in the future, get their attention. They avoid wasting money and splurging.

#6 Wealthy people have passive income stream(s)

Remember my statement at the beginning of this post? I said I couldn't get wealthy by being employed only.

I knew I needed to do something else? And that's exactly what I've been doing and I'm looking forward to sharing that with you soon.

So I urge you to get at least one passive income stream going, then you too will be onto a winner!

READ THIS RELATED POST: 10 Side Hustle Benefits You Need To Know

READ THIS RELATED POST: How To Make 1000 Pounds Extra a Month?

Most wealthy people have multiple streams of income. The more this income can be earned passively, the better.

Passive income generators, free your time to do other productive and money making things.

And give you more time to enjoy life.

Also, passive income means you do not rely heavily on one source of income. This means should the unexpected happen, you will still be able to sustain yourself through the other streams of income.

This is essential in removing money worries.

#7 Wealthy people live well within their means

Wealthy people stay pretty modest for the most part. You can't always tell by looking at a wealthy person's appearance they have great wealth.

That's because rather than splurging on designer wears, flash cars or flash anything for that matter. They put their money away into savings and investments where it will grow in value and will provide them with an income to sustain their standard of living in their later years.

Don't be tempted to spend more as you get more. It's fleeting and provides only short term pleasure.

It's important to think about your future and that of your generations to come. Leave something for them so that it can remove their money worries. They too can build on their wealth for the benefit of others.

#8 Wealthy people put their money away immediately

Wealthy people pay themselves first and immediately upon receipt of earnings/income.

This is how the rich save money.

They set up automatic payments to their savings and investment products.

We can do this too by logging into our bank accounts and setting up a standing order or a regular automated payment schedule.

These are automated and a set time each month. No questions asked. Expenses and bills are also set to leave at the same time. This way they are clear on what is remaining.

If they need more money, they think of ways to come up with the difference.

They never say: 'I can't afford this'. But rather 'How will I get the money to afford this?'.

The right mindset is key.

READ THIS RELATED POST: How A Positive Money Mindset Transforms Your Finances

#9 Wealthy people give generously

So what do millionaires do with their money? Well a good slice of it actually gets given away.

This is one of the money habits of the wealthy that is truly powerful.

I strongly believe in giving. I believe you're planting a good seed which will result in an extraordinary harvest when you give.

As a young girl, my first introduction to what a billionaire was, was via a certain Mr. Bill Gates. But not only did I find out he was a billionaire but I also came to know that he was a man with a VERY generous heart to give.

He stepped down from Microsoft back in 2014. But has maintained the spirit of giving ever since, giving more and more of his money away. Yet, he is still amongst the richest people on earth!

I honestly believe this is due to the amount he gives (not to mention some real fantastic investment choices I bet!). The more he gives the more he receives.

A person who gives has a good mindset. They do not see this as losing money. Rather it motivates them to come up with even more creative ideas to make more. This is an excellent example of stewarding your money.

"One person gives freely, yet gains even more;
another withholds unduly, but comes to poverty."
Proverbs 11:24 NIV

RELATED POST: Scriptures on Giving: Sowing and Reaping A Significant Harvest

RELATED POST: 5 Great Reasons Why You Should Donate to Charity

Conclusion on the 9 Money Habits Of The Wealthy

What do you think about these money habits of the wealthy? They are not impossible to do right?

The key is to manage money better with a budget and work on reducing any debt.

Then start saving, gradually moving into investing into areas you genuinely have an interest in and understanding about.

Next, it's about creating other streams of income so that you're in a good position should any financial trouble come about.

Giving back is important. Keep the circle of love and giving going. Because you do not lose when you give. Actually you get more. To me, this is truly an investment.

Let me know in the comments below and share this post amongst your friends who could do with hearing this too!

Based on this post I think you will love…