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Money Secrets of the Rich and Famous…Checklist


The East Brunswick Public Library sponsored my presentation last week about Money $ecrets of the Rich and Famous and I had a slide with 10 bullet points that seemed to provide a clue to what the wealthy do, and so should most people, so am including it here with some added comments.

  1. They Invest with focused goals. Everyone should do this with no exceptions.
  2. Take greater risks when investing. Risks need to be measured. When you have your base secured, you can venture into greater risks. However, if your plans, projections and current portfolio indicate that you will not attain your goals, perhaps greater risks should also be considered.
  3. Have greater access to more investment opportunities. I consider this a blessing and a curse. Greater opportunities indicate that you have choices beyond the “conventional” investments. I consider many of the so-called conventional investments better choices for most people. These include bank certificates of deposits [very low income right now but complete safety of principal] and index funds or carefully managed stock portfolios. Over time these have proven to do significantly better than alternative and many “insider” and esoteric “open only to the wealthy” investments.
  4. Can employ or engage higher level and more experienced professionals – CPAs, Lawyers, Investment managers, Insurance agents, Hedge fund managers, Venture capital managers, Investment bankers. This is certainly true but there are accessible and affordable advisors available for any size portfolio.
  5. Spend to obtain extensive due diligence and vetting of people before they make an investment. This is important if you make unconventional investments, which many of the less than very wealthy do not do.
  6. Take advantage of income tax benefits which require knowledge, understanding the risks and costs of fighting the IRS, the nerve to undertake unsettled positions, and the willingness to pay fees for research in uncharted areas. Using a good tax professional is a must no matter the size of your pocketbook or income. Do not skimp on this cost; it is really an investment.
  7. Take advantage of estate tax loopholes and planning; the rich pay estate taxes which can be over 50% of excess assets over exemption amounts. You should only wish you were in this situation. For most almost everyone else, do not bother about this.
  8. Don’t pay 29% interest and late charges as many people do with credit card debt. This is right and anyone paying these fees should triage their spending to get this debt extinguished as quickly as possible.
  9. Protect their wealth by diversifying their investments. No one should put all their eggs in one basket. [This was originally from Don Quixote around 1615: still true]
  10. Can do large and grandiose “stupid” things that can make them richer in the long run. This is right if you have money to lose, but why take the extra risk if it is not necessary to attain your goals.

The above is a pretty good checklist. I suggest saving it and giving it a relook every once in a while.

If you have any tax, business, financial, leadership or management issues you want to discuss please do not hesitate to contact me at emendlowitz@withum.com.

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