Do you know that the richest 1% of the world have more money than the remaining 99%? This may sound absurd but it’s the truth! The world’s wealthiest people have many things in common and not surprisingly their money methods often overlap so here are some examples that perhaps you can use yourself!
Method #1: Budgeting their monthly expenses
The first way the 1% manage their money is by budgeting their monthly expenses. You may wonder why they need a budget when they have enough money to cover their expenses. For instance, how long do you think someone as rich as Bill Gates of Microsoft, with a net worth of $100 billion, can last if they decide to spend one million a day? Crazy enough, it would take him over one hundred thousand days to burn through this immense net worth spending $1 million a day. However, in most cases, the rich don’t spend their money this quickly but the example is to make you understand why it is important for you to do what the rich are doing. If the rich, who have enough money still budget their monthly expenses, then I think you should do the same.
But, the top 1% do not just have a budget, they stick to it! It is not enough to create a budget as most people do, it is more important to stick to the budget. Having a budget helps them track their spending and make necessary adjustments. With the help of a budget, they can manage their money and know where it is going even before spending it.
The sad reality is that many people who aren’t as affluent as the 1% fail to create or maintain a budget in their day to day lives. This very often leads to overspending, the assumption of high-interest debt and bearing more financial stress than is necessary. Therefore, if you want to to manage your money like the 1%, you should start budgeting your monthly expenses right away.
Method #2: Reviewing and negotiating their big 3 expenses
If you have been reading about how to manage money and attain financial independence, then you must have come across the advice to cut down your spending. This is good advice but it depends on what cost you are cutting down. Like most people, you may be focusing on expenses that have little…