10 Things The Wealthy Do Differently – The Long Game | A Blog By Thomas Kopelman (2024)

Everyone wants to know what secrets the wealthy have that have enabled them to amass their fortunes. There has to be something they know that we don’t? In this blog post, I’ll discuss ten things that the wealthy do differently in order to maximize their money!

1. They Focus On Equity

Most people think a high income is what leads to becoming wealthy. While a high income surely helps, ownership is the path that brings the most wealth. Authors of The Millionaire Next Door Thomas Stanley and William Danko write, “20% of the affluent households in America are headed by retirees. Of the remaining 80 percent, more than two-thirds are headed by self-employed owners of businesses. In America, fewer than one in five households, or about 18 percent, is headed by a self-employed business owner or professional. But these self-employed people are four times more likely to be millionaires than those who work for others.”

Business owners are far more likely to become millionaires, it’s actually not even close. You can get equity by owning a business, working at a company that gives you ownership overtime, etc. This is where the real wealth gets built.

2. They Own Real Estate

I know, I know, I harp on real estate all the time and that it isn’t that great of an investment. However, when I say this I am mostly saying your primary residence. If you choose to buy a house, live in it for a while, pay it off, etc. then it can become a solid investment.

However, the best investments in real estate tend to be short and long term rentals. Many wealthy people own multiple investment properties, make a profit on them yearly, all while someone else is paying off that mortgage. Owning real estate is a great way to diversify your portfolio and build wealth. The key is to hold on and build equity in these homes.

3. They Rarely Sell Investments

Most people with little wealth barely invest. Then they end up selling those investments when the market is down or to buy some other things they want. The wealthy do not do that. They create portfolios that they stick with for very very long periods of time. Then when they need that money, they often borrow against that portfolio. This allows them to keep their investments compounding and not incur taxes like you would from selling.

Your biggest goal should be to allow your investments to compound for the longest time possible!

4. They Focus On Investing Over Savings

Saving is all about having cash for short term goals. Investing is about growing your money to help pay for your future. The wealthy prioritize regularly investing, while the poor focus on saving for the next thing to buy. The wealthy buy themselves more freedom in the future, while the non wealthy spend the money and are right back to where they started.

The wealthy focus on having a high investing rate over anything else. They will always ensure a solid percentage of their income is being invested for the future!

5. They Focus on Long Term Wealth

The wealthy understand that building wealth takes time. There are no true get rich quick schemes and they know that. This allows them to stay focused and not fall for every new shiny investment that comes across the table. Avoiding bad investments is a skill! They know their plan, they stay disciplined, and they stick to it!

6. They Know What They Like and They Spend There

Wealthy people take the time to understand the things in life that bring them happiness. It might be vacations with their family, a nice home, giving to organizations they love, etc. The key here is that they spend on those areas and cut in the areas that don’t bring them happiness. It is hard to build wealth if you have to have the nicest possessions, vacations, lifestyle, etc. By knowing what they actually like, they are able to cut in other areas and continuously spend less than they make which we all know is the key to building wealth!

In the book The Millionaire Next Door, the authors thought that the wealthy were the ones that wanted caviare, the nicest aged bottles of wine, etc. but what they realized was that the wealthy did not want that. They were actually the ones who avoided spending money on these luxury goods and that is why they became wealthy. The people who are not wealthy but want to appear wealthy are the ones who consume such luxurious products. Keeping up with the Jones’ is not how you become wealthy!

7. They Lean On Experts

The wealthy understand that they only have so much free time and knowledge and that others can help them in areas that aren’t their specialities (aka they can put their ego aside and trust others). They work with financial planners, tax strategists, business coaches, attorneys, etc to help fill their knowledge gaps. This allows them to build wealth in a more efficient way with less mistakes than they would make on their own. It also frees up their time so they can spend it in other important areas of their life.

8. They Know Their Network Is Key To Success

We all have heard the phrase “it’s not about what you know, it’s about who you know.” This phrase could not be any more true. You can hate that all you want and say it’s unfair that certain people have a leg up based on their parents, but anyone can build a network with time. We have social media, local events, and friends who can help connect us to others. Take advantage of that. Your network can help you build a business, get a new job, find a mentor, and much more. These are all so crucial to your future success. Doing good work is not enough. You need good people in your corner that can help you!

9. They Aren’t Fearful Of Good Debt

People can say whatever they want about debt, but in my mind there is good debt and bad debt. Those with little wealth have mostly bad debt like car loans, credit card debt, personal loans, etc. These don’t help you build wealth, they actually help destroy it.

The wealthy focus on leveraging debt to help them build wealth. Sure, they might be able to buy that house with cash, but they choose to leverage debt and keep their investments compounding. They understand that they can leverage this low interest debt on appreciating assets and get more return on those dollars. Most importantly, the wealthy do not get into bad debt. They avoid buying things they cannot afford.

10. They Have A Plan In Place

The wealthy understand that everything good in life comes by planning for it. But they also understand that the plan often needs to be changed because life changes quickly. So they create a plan often, but then review and make adjustments to it regularly to coincide with what is going on in their life. They fully understand that “A goal without a plan is just a wish.” So they stop wishing and plan always.

These are 10 key differences between the wealthy and those who aren’t. If your goal is to build wealth, start focusing on what the wealthy do. Mimic them. And one day you will be one of them!

If you enjoyed reading and are looking for an advisor,here is the link to book your first free meeting with me!

Disclaimer: none of this is advice, it is just for informational purposes. Talk with your financial planner before implementing any of these strategies.