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How Do People Get Rich? A Look At Wealth Accumulation Strategies

I was reading Free Money Finance the other day and was enamored with one of the interesting articles that discussed the most important factors making people wealthy. FMF presented results from a book that showed how a group of individuals made money in life and eventually became what is considered, “wealthy.”

How do people get rich? We all talk about how we want to make lots of money in the future but do we really know how to get there? Why not follow what others did? The findings come directly from individuals that got wealthy in life and took some time to reflect on their success.

Of course you don’t have to listen to a 20-something behind a computer screen but I hope you take the results of real life millionaires seriously.

The top 2 reasons the people felt they got rich/wealthy in life:

Habitual Saving

Wait a minute. So you actually have to save money to accumulate wealth? This shows that getting rich is not a slow process. It is a process that involves spending less than you earn for as long as you live. Are you willing to ditch the credit card and spend less than you earn? If so then slowly but surely you will begin to accumulate money in your bank account. As time goes on, and with compound interest on your side, your small weekly savings will end up a nice large sum. You could argue that this is boring and slow but I would rather know that I’m on the right track as opposed to gambling with my hard earned savings.

Sound investing

This doesn’t include chasing momentum or constantly seeking the next hot stock. It involves investing your money into investment vehicles that you understand and trust. It doesn’t matter if you invest in stocks, mutual bonds, bonds, CDs, or a online savings account, as long as compound interest is on your side (and the market doesn’t completely crash) your savings will grow.

Before you can begin investing, make sure you have found a debt elimination plan to get rid of all of your debt.

At the bottom of this list of factors influencing how everyone got wealthy, guess what was there? The two least common methods of getting rich over time:

An inheritance

I wrote about this in my post on how to get rich quick. If you plan on taking it easy until you inherit money you will be in for a surprise. After all of the time has gone by and once you figure out what you were left behind with, you will still have to pay all of the relevant taxes. Once that is all complete you will realize you are far from rich. If  you do plan on inheriting some decent money don’t let it be your saving grace. The money will help you with your savings goals but it will usually not provide you with financial independence.

Starting a successful business

Okay I’m surprised about this one. I know that many small business and new business ventures fail but I still thought starting a successful business was a more critical factor influencing the accumulation of wealth.

I’m guessing the keyword here is “successful.” We can all start a business and make some money from it but we will experience varying levels of prosperity. This probably also includes individuals that have lost money as the result of a new business venture. With that being said, I still strongly believe that college student should consider starting a side business.

Other factors on getting wealthy that made the list (top to bottom): a high paying job, an advanced degree, buying a first home, and getting married.

What is your take on these various wealth accumulation strategies? Are you working on any of them? Would you like to improve on any areas? Please do share with us!

 

Source: Studenomics

On 31 May 2011 at 20:13pm - by Briching Team - Comments (0)
HOW RICH ARE YOU?


Every year we gaze enviously at the lists of the richest people in world.  Wondering what it would be like to have that sort of cash. But where  would you sit on one of those lists? Here's your chance to find out.

http://www.globalrichlist.com/

On 31 May 2011 at 20:10pm - by Briching Team - Comments (1)
Top 10 Rich People In This World

Being rich, undoubtedly, keeps you among a few distinguished amidst the crowd of mortals on the planet Earth. It is the wealth in your possession which provides you all the worldly pleasure and comforts, however, making of a rich is not as much easy concept to be adhered with nor it is fairy tale, where, you suddenly come across wealth after tiring treasure hunt. It is sheer hard work and use of one’s brain which make them rich. Here, we are taking about the top ten richest people on the earth as according to the wealth held by them in order of one to ten.

The most fortunate guys on the Earth in terms of wealth and business possessed by them are: Bill Gates, Warren Buffett, Carlos Slim Helu, Ingvar Kamprad, Lakshmi Mittal, Paul Allen, Bernard Arnauld, Prince Al Waleed, Kenneth Thomson, and Li Ka-shing.

1. Bill Gates

Bill Gates with an estimated wealth of $ 50 billion dollars tops the list. He amassed that great fortune through his business of computer software as operated under aegis of Microsoft Company, especially, selling revolutionary operating system Windows that brought breath taking change in computer application for a common user. Apart from his wealth, computer wizardry he is also known as great philanthropist as he generously donated half of his fortune to Bill gates foundation.
2. Warren Buffett

Warren Buffett with wealth of 42 billion $ is on the second spot in the list of top ten billionaires. He is known as venture capitalist and made most of his fortune through his company Berkshire Hathaway in insurance business.

3. Carlos Slim Helu

Considered as the richest person in Latin America Carlos Slim Helú, is said to be owner of an estimated fortune of 30 billion $ that he earned from the telecommunications company Telefonos de Mexico.

4. Ingvar Kamprad

The fourth position in the list is held by Ingvar Kamprad, a Swedish industrialist with 28 billion $ fortune in his possession. He accumulated this huge wealth through IKEA, a chain of Home Furnishings, which now has over 230 stores in 33 countries.

5. Lakshmi Mittal

In the fifth place, it is Lakshmi Mittal, with fortune of 23.5 billion $ from India, the CEO of “Mittal Steel Company,” the largest producer of steel in the world.

6. Paul Allen

Next position is kept by Paul Allen with worth of 22 billion $ is the lesser known partner in the founding of the company Microsoft.

7. Bernard Arnauld

A French business Bernard Arnauld is placed at seventh position with wealth of 21.5 billion that he earned from his “rule of fashion” LVMH, which owns world-renowned brands as Christian Dior and Lois Vuitton, among others.

8. Prince Al Waleed

Member of the royal family of Saudi Arabia Prince Al Waleed, with fortune of 20 billion dollars is placed at eight spot. He is an investor in a number of areas with greater participation in Citigroup.

9. Kenneth Thomson

Kenneth Thomson at ninth position with an estimated fortune of 19.6 billion $ is the richest person in Canada, son of the founder of the Thomson Corporation. The company is known worldwide in the business of publishing and media, which lately diversified into market information and electronic services.

10. Li Ka Shing

The tenth and last place in the list of the richest men in the world is held by Li Ka-Shing, the wealthiest man in Asia, with an estimated fortune of 18.8 billion $. His empire consisted of operations in banking, construction and property, among other markets

On 31 May 2011 at 19:40pm - by Briching Team - Comments (1)
Welcome to Briching Blog

This is our first blog post! Nothing much to add right now but hopefully will update this frequently with briching updates...stay tuned...

On 02 Nov 2010 at 06:06am - by Briching Team - Comments (2)
 
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