People often think that rich people make their money primarily by investing in the stock market. But wealthy people have many other ways to make their money work for them.
Kevin Huffman, owner of Criminil Trading, says, “Aside from investing, which remains a wealth generator, there are many other (more creative) ways that wealthy people use to grow their money.'' Told. Here are some of the main ways to do this.
Leverage your business
“Many wealthy people use at least some of their wealth to start businesses,” Huffman says. “Once the business takes off, it can create a steady income stream, increase in value, and potentially be sold for a big profit.”
intellectual property
Ownership of copyrights, patents and trademarks can be a lucrative business, Huffman explained.
“Ultra-wealthy individuals can even invest in the creation and ownership of intellectual property that provides ongoing royalties and licensing fees,” Huffman said. “For example, musicians can monetize their music catalogs as a source of income through streaming services.”
According to Rhett Stubbendeck, CEO and founder of Leverage Planning, creating intellectual property requires not only investing money, but also ideas.
“For example, one of our clients developed a proprietary financial planning tool, patented it, and now enjoys stable royalties,” Stubbendeck said. “This is a great way to build both income and reputation.”
Payment for time-saving services
Wealthy people typically have hectic and demanding schedules. Every minute she spends on mundane tasks like cleaning, cooking, and running errands can be spent on more worthy pursuits, like growing her business or spending quality time with loved ones.
For this reason, many wealthy people choose to invest in services that save them time so they can focus on what matters most. This includes hiring a personal chef to prepare healthy meals, a housekeeper to keep the house clean, and a personal assistant to manage daily tasks and errands.
Although these services may have large upfront costs, they can provide significant long-term benefits. By freeing up time and mental energy, wealthy people can pursue higher-value activities that generate greater income and build lasting wealth.
private financing
Another strategy used by the wealthy is private financing, Mr. Stabbendeck said.
“This involves providing loans backed by real assets, which provide higher returns than many traditional options,” Stavendek said. “Annual returns range from 8% to 12%. This is a powerful way to diversify and strengthen your investment portfolio.”
Skills development and personal education
Another important strategy commonly employed by wealthy individuals is making deliberate investments in skill development and personal education, said David Blaine, CEO and founder of BlueSky Wealth Advisors.
“Unlike direct financial investments, investing in personal and professional growth can yield dividends in the form of increased returns and potentially innovative business ideas,” Blaine said. states.
Continuous learning, including advanced courses, specialized workshops, and strategic networking events, allows individuals to stay ahead in their field and take advantage of new opportunities not accessible through traditional market investing, he said. states.
Building a strong network
One of the most valuable ways wealthy people make their money work for them is by building a powerful network of influence. By cultivating relationships with other successful people, you gain access to valuable opportunities, insights, and resources that can help you exponentially increase your wealth.
This may include joining upscale business and social clubs, attending high-profile events and conferences, or simply connecting with and learning from other successful entrepreneurs and investors. .
strategic philanthropy
Finally, Blaine said many wealthy people practice strategic philanthropy.
“Establishing or donating to a foundation not only satisfies your philanthropic desires, but also achieves significant tax savings,” Blaine said.
“Throughout my tenure, [my company]Guiding clients on establishing charitable trusts and foundations has proven to be a powerful way to manage larger estates, ensuring long-term wealth preservation and social impact.” he added. “This approach not only helps with tax planning, but also helps solidify your family's legacy and influence.”
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