How do the wealthy do it?

Hey there, time traveller!
This article was published 15/01/2025 (306 days ago), so information in it may no longer be current.

Dear Money Lady readers,

I have been asked many times how the wealthy save and make money. So, today let’s share some secrets from those high net-worth Canadians – Canadians who have retired with high-valued investment and retirement assets. How did they do it, and what can you copy?

Wealthy people have all made their money differently. Some are great investors; some use real estate and others have great entrepreneurial skill. But when you drill down to the core of those high net-worth people, they all have a few traits in common that we don’t see in those people with much less.

First, the wealthy usually have a higher appetite for risk than the average person. I am not saying they are reckless but rather that they are always on the lookout for opportunities that might be prosperous. Wealthy people leverage their assets to create more wealth. They are not people who stay stagnant; moreover, we often see wealthy people who have paid off their mortgages multiple times throughout their lives, only to have the ability to leverage-lend again. The wealthy see debt not as a bad thing, but as a tool for creating more wealth. They borrow to use the interest as a tax write off and then monetize the funds to expand their net worth. This is done through investing in the stock market, creating a business, or buying real estate. They want appreciating assets and never leverage on something that will depreciate over time.

Second, wealthy people are tenacious workers. They invest in themselves, always upgrading and looking for advancements. They also pivot to change, taking full responsibility for bad judgement calls and then doing the things others wouldn’t, to get ahead. I have never seen wealthy people sit back on their laurels and wait for something to happen. They want to be the “market movers” and they will always be trying to improve their situations.

Third common trait of the wealthy is that they never do things as “lone wolves.” They know they can’t know it all and believe that more minds are better than just one. The wealthy always have advisers in everything they do. They are inquisitive thinkers and want to know more – true believers that “knowledge is power.”

Last, we see that wealthy people understand the concept of diversification. They never have all their assets in one place but rather want to spread their assets across multiple platforms to lower their risks. And, contrary to what you may think, the top one-per-centers are not pretentious or outwardly gregarious with their money. They buy pre-owned cars to save money rather than new ones. They use reward credit cards to get discounts. And they keep to personal and professional financial budgets so they know where their money is, how it’s performing and how they can save more.