The other day I watched a recorded speech by Tandin Dorji – the founder of EducationPro Consultancy Firm.
He was talking about many things. But one thing is on various games and why we must know the game we want to play and its rules.
It’s how some people are wealthy or in middle class, and some are still in low income class.
Let us see basic financial mindset, moves and strategies which separate wealthy people and other classes:
1. Money Mindsets
The wealthy people understand that it’s not just about how much money you make, it’s about how you spend it.
But for other classes, money is something to spend. They use money on lifestyle upgrades and not on high-return investments.
2. Purchases Nature
When they get new money, wealthy people don’t rush to buy liabilities or depreciating assets. They invest in assets that generate income.
But middle and low income people immediately rush to purchase luxury cars or other expensive items.
3. No. of Income Source
Just like banks, wealthy people also will have as many as seven sources of income. Reduction in one or two have less impact.
But middle and low income class people will have one or two sources of income. Decrease in one may throw them in poverty.
If your plan is to become wealthy, maybe you should consider increasing number of your income sources as well.
4. Tax Plan & Strategies
All wealthy people know how our tax system works. They invest in such a way the tax burden is minimum.
It is why most of the wealthiest Bhutanese individuals don’t even pay tax like an entry grade civil servant.
It’s not they are inherently disobedient, it’s just how our tax system works. Nu.100 have different tax when it’s personal, and business income.
5. Financial Advices
Wealthy people seek advices from professionals like bankers, real estate developers, accountants, investors etc, and take informed decisions.
The low, and middle income class people don’t have access to advice or insight of such professionals.
In some cases, they don’t take such advices thinking what they do is just right and then end up picking inapt financial choices.
6. Retirement Nature
Low and middle income class people think retirement is at 65 – when law permits them to discontinue being in services.
However, retirement for wealthy people is when someone doesn’t have to work for money.
The retirement can be before or after 65. But they aim to do so before 65 as they can work on passions thereafter, not for money.
So, moving from a low or middle income class to a wealthy class needs a main income and other multiple income streams.
It is to live below means initially, and then purchasing income-generating assets to indulge on luxury things later.
One main thing that separates wealthy and other classes is mindset. Do you believe it?
