🌻The Rich Don’t Save Money…Here is what they save instead

People who save money as a strategy to have more money clearly do not understand how money works. It sounds witty to save money, but the world where that works is long gone.

Books like The Richest Man in Babylon, suggest the idea of saving to accumulate riches. And it worked in their time. Not in our time. Well, except what you are saving is not money.

The rich and affluent people you see in the world today do not save money. They didn’t save money to get rich. They are not saving money to stay rich. This is because they understand the nature of what we call money today.

If money were gold and silver, it could have been worth saving. But the US dollar, British Pound, Euro, or whatever currency is legal tender in your country is not worth saving. To save it is to screw yourself. Just look at inflation in the last 18 months.

Read also: You have trouble with your finances for these only 2 reasons

Things Worth Saving

Let’s start with the answer. You don’t save something whose value is diminishing with time. Instead, you save something whose value remains constant or continues to appreciate.

Since 1971, the value of the USD has been on a downward spiral. And if you understand economics (even if just a little bit), you will know that it will keep going down. The purchasing power of the dollar will keep decreasing. This is because the central bank is now addicted to money printing.

If J. Powell (the current Fed Chair) won’t print more money again, he will one day leave that office and a new chairman that will print will be installed. The fate of the dollar is as clear as the noonday. And that is the global reserve currency. Every other currency is pegged to the US dollar.

So, think for yourself — a wealth strategy that entails holding on to something that is losing value gradually is not very wise, is it?

This is why the rich don’t do it. If you have read a lot of my articles, you must have heard me say this many times. You can save to teach yourself financial discipline. But don’t think you are creating wealth for yourself that way.

Instead of saving money (which is currency), the rich do something else. They create assets, own the assets, and keep the assets.

An asset is that which appreciates in value over time and at the same time brings you residual or passive income

So, let’s look at a few things worth saving. First, we consider bitcoin. Is it a smart thing to save?

To Save Bitcoin?

If you are interested in investing in bitcoin and crypto, you should read my crypto book for an in-depth understanding of the crypto space. But let’s do a brief here.

What is bitcoin? Bitcoin is a financial instrument. It is not an asset, not a commodity, not a currency, or a stock. It can be used as any of that, but it is in a class of its own. This is the first thing to understand about bitcoin.

What you do with bitcoin depends on how you see it and where you are (financially). Some use it mainly as a currency. Some use it as a commodity. Some trade it like stocks. Some leverage it like an asset. But it is all because of where they are and the tools they have access to.

As an everyday person using bitcoin, you cannot compare yourself with a Morgan Stanley or Goldman Sachs trader. You cannot use bitcoin the way someone like that uses bitcoin.

To the everyday person, bitcoin is certainly something you can keep. You keep enough stash of it away that you know can help you start over if things fall apart. You can hide your hardware wallet somewhere really safe.

It makes sense to save bitcoin up to a certain amount and keep it. The amount is up to you. But you must understand that it is not an asset. It doesn’t bring money into your pocket. There is no residual income.

So, rich people keep some money in bitcoin. But they did not get rich by buying bitcoin. Also, they are not staying rich by investing in bitcoin. Those who are getting richer with bitcoin are trading.

If you don’t understand trading, don’t dabble in it. You will get hurt. Don’t let anyone tell you that you can do it. If you are not trained and sophisticated enough to do it, stay away.

What About Gold?

Gold is also similar to bitcoin. But they are not the same. Gold is a commodity. Gold will not give you residual income. But while the price of bitcoin fluctuates heavily, the price of gold is relatively stable with gradual appreciation over time.

It is not really that gold is appreciating over time. In the real sense, the currencies are decreasing in value over time with reference to gold.

Gold is a very famous option for rich people to store their wealth. But you must understand something here. The rich people who own gold did not buy gold to get rich. They bought gold after they became rich as a hedge or insurance policy.

So, you could say the rich save gold. But an everyday person buying gold like the rich may not be doing the same thing. It matters where you are financially. You have to do what is right for your level.

And when buying gold, don’t buy paper. I know that sounds funny, but it is serious. Don’t buy paper. What that means is that when you buy gold, buy the physical metal itself and go find somewhere to store it.

Don’t let anyone give you a certificate that states that you have gold stored somewhere. If your intention is to trade gold as a commodity on the stock exchange, buy the paper all you want. But if your aim is to keep, don’t buy the paper. I’ll explain why.

When push comes to shove and people start scrambling for money, you will discover that the number of gold certificates given out does not match the number of gold bars available. It always happens. People are that greedy.

If it is not locked up in a safe in your house or property, don’t think it is yours. Trade the paper, but keep the physical thing.

What About Real Estate?

Yes, real estate does make people rich. The rich save real estate. Real estate is a great asset class that not only makes people rich but also keeps people rich. However, you have to know how the game is played.

Buying a real estate property and living in it does not make it an asset. A true asset has to appreciate over time while also giving you residual income.

Bitcoin appreciates in cycles but doesn’t give you residual income. Gold appreciates over time but doesn’t give you residual income. Real estate also appreciates over a long period and when done right, it gives you residual income.

Residual income from real estate often comes in the form of rent paid to the owner. When all expenses are deducted from the rent and there is still a significant chunk left, then the real estate property is a true asset.

Having other people live on your property is not the only way to turn real estate into an asset. Some turn their properties into storage spaces. It often entails less drama and maintenance. But you have to learn how that game is played.

Some use their land to grow crops. Some use their land to raise animals. Some rent out their property to companies and corporations for commercial use. There are all kinds of options.

So many people have become rich by playing the real estate game. In fact, it is said to be the easiest way to build wealth in America if you learn how to do it right.

Real estate does have its risks too. Prices can fall off a cliff in the short term. Renters can be problematic. The market is already too saturated in many cities.

But yes, anybody from any background can get into the real estate game and grow rich.

Read also: The rich don’t work for money

How Most People Got Rich in the First Place

Most people got rich in the first place through a successful business. They started a business or joined a business and it became successful. Or they had a successful exit. That is often the first taste of wealth.

Anybody who wants to jump into the super-rich class has the best chance by building a business. The barrier to entry for real estate can be high. And it takes years and decades to build serious wealth through real estate.

If you want to go faster, build your business. And this is not about “starting a business”. The majority of those who start businesses fail. Those who succeed are those who have made up their mind to build something no matter what it takes.

The easiest way to get started in building a business that will make you rich is to listen. Listen to the need around you. Listen to what people want. And be the sure person to get it to them.

Building a business is not about coming up with a product. It is not about creating an online store or service website. Building a business is about building a customer base.

This is about finding people who trust you enough to buy from you (even when they can easily go elsewhere). If you have such people, it is a matter of looking for what they would love to buy and offering it to them.

For example, you don’t have an online business because you have a million views. You have an online business when people are willing to give you their name and email address.

Business is people — it is never about the thing. It is about the people that buy the thing

Make your business about people, not about things. That is the pathway that will lead to financial success. That is what makes you rich.

With your success in business, you can divest into real estate, other businesses, gold, and bitcoin. This is the smart way to play. And it has worked for a lot of people.

Conclusion

The rich don’t save money. They own assets and keep their assets. They almost never sell their assets and mainly live on the residual (or passive) income.

The best way to get started is to build a successful business. That is when you are in the game.

Think about these things.

🟢contributed by David O.

For more information and updates join our WhatsApp group HERE

Follow us on Twitter HERE

Join our Telegram group HERE