Rich People spend money on experience, and poor on materialistic things.

My Grandfather used to say.

You’ll never get rich if you start living on pay-checks.

It is true, that whatever salary you make, it is impossible to become rich with what you’re earning.

I’m not saying getting rich only means buying materialistic possessions and purchasing homes.

The definition of rich is different for everyone. According to me, becoming rich means you’ll become financially free, where you don’t need to work for money.

You can take a break and buy free time using that money.

Rich people are mindful of their spending habits. You can’t take a whole beer shop, because you’re rich enough to buy it. Alcohol is bad for health.

You can buy comfort by becoming rich. Rich people use the money to buy comfort.

Read also: 3 strategies to minimize unnecessary expenses and build your wealth

Rich people invest what they have.

Rich people invest what they have! it may be time, money gold, and cryptos. Investments help them to keep up earnings for them even if they are sleeping.

In the current scenario, you can’t beat inflation by only investing in fixed deposits or bonds. Inflation is at its peak.

Rich people invest their money, and assets to make more money and then invest them again.
Rich people create a buffer between their investments and spending which helps them to manage their money.
Rich people don’t depend on someone to make investments for them, instead, they took action and learn about investing.
Rich people know what is an asset and what is liability

How do identify the rich guys and poor guys?

Poor guy will buy a 1300 dollars t-shirt, fancy jeans, and a hat to look rich.

He will buy expensive cars to surprise others. Poor people buy expensive things to look rich.

Rich people buy cheap things to save money for further investments.

Rich people know the line between asset and liability.

For example,

If you’re buying a car then it will be a liability for you, if you are not giving it on the rent.

When you start giving it for rent it will make money for you. It will become an asset for you.

When you keep money in your home it will become a liability as its value decreases.

If you put that money in the bank account, from that day your money will become an asset to you.

Rich people save money to invest, they know how to circulate their assets properly.

What you’re buying which is not related to your daily essentials, ask yourself one question, will this purchase give me money in return or it will become a liability?

Try to find the difference between assets and liabilities
Don’t buy things that will not give you returns in a long time.
Try to build assets and reduce liabilities like home loans, or buying a car.

Read also: 4 ways we lose money without realizing it

Practice minimalism and reduce dependence on materialistic happiness.

You don’t need to look rich so people will say, you’re rich. Change your attitude towards money.

Create assets by investing, or purchasing them through the market. Rich people use the same principle to make money.

They start their work from zero and go toward the financial freedom everyone craves in their lifetime.

CONTRIBUTED BY Saurabh Adhane

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