What the Rich Do to Get Richer
Those with large amounts of wealth have the capacity to take advantage of additional revenue growth strategies that others may not. The following list highlights ways “the rich get richer:”
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Invest with focused goals
- They use a measured portion of their wealth to take greater risks when investing
- Have greater access to a wide range of investment opportunities
- Employ or engage higher level experienced professionals – CPAs, Lawyers, Investment managers, Insurance agents, Hedge fund and venture capital managers and investment bankers
- Spend to obtain extensive due diligence and vetting of people before they make an investment
- Take advantage of income tax benefits – this requires knowledge, an understanding of 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
- Take advantage of Estate tax loopholes and planning– the rich pay estate taxes which can be over 45% of excess assets over exemption amounts so the incentive is there to try to reduce those transfer taxes
- Don’t pay up to 29% interest as many people do with credit card debt
- Protect their wealth –They keep a base in safe investments to assure their cash flow and maintenance of their assets
- Irrespective of their other busy activities they try to make the time to understand the fees they pay, the benefits provided by each advisor and the downside of any investments they undertake
The rich do the above, but so could many others. No one should abdicate knowledge of how their money is invested and everyone should invest in accordance with goals and fully understand the risks.
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