The Best Kept Secrets Of The Wealthy–Part II
One of the best-kept secrets of the wealthy is that the majority of them invest in stocks! They hold onto their stocks long-term. The wealthy do not “actively” trade their stocks.
Wealthy individuals know the disadvantages of being a day-trader. Day-trading is constantly buying and selling, buying and selling every day. This can be a losing proposition.
A small “minority” of the wealthy hold their stocks for less than a year. They know the tax implications and brokerage fees involved in short-term investing. The affluent aim for long-term investments in their stock portfolios to minimize these taxes and fees.
Wealthy individuals also do not check their investment portfolios daily! They are aware that doing this, after making well-informed stock decisions, could be a waste of time. Confident in their stock picks these investors are not overly concerned with “daily” stock price fluctuations. They realize that stock prices going “up and down” daily is a normal occurrence in the stock market.
In addition, many of the wealthy do not pay attention to the daily news media regarding stock performance. Affluent individuals know that market pundits don’t have “a magic crystal ball.” Many take these pundits financial advice “with a grain of salt.”
Most wealthy individuals spend time researching and studying their stock investments thoroughly. They take the necessary time to carefully plan their investments out before investing. This is unlike the “trader” who spends more time trading than studying his stock investments.
Most wealthy individuals also do not bother to call a stock broker every day for advice. The wealthy prefer to make their “own” educated stock decisions with their money.
Another best-kept secret of the wealthy is that many of these affluent individuals are “frugal” with their money. Many millionaires live “below” their means in order to have more resources available to achieve financial security. Millionaires are known to save aggressively.
Studies have shown that the majority of millionaires invest. However, certainly not in a savings accounts at a bank! This brings to mind this quote by Robert G. Allen: “How many millionaires do you know who have become wealthy by investing in savings accounts? I rest my case.” Most wealthy individuals are very disciplined savers!
In addition, the wealthy are not big fans of “overconsumption.” The acquisition of “high-status” material goods is not of vital importance to many of the wealthy. They do not feel the need to display their wealth “openly”.
Many affluent individuals live in modest or middle-class neighborhoods. A majority of millionaires are self-employed. Moreover, many drive reasonably priced older automobiles and shun the newer and higher priced “luxury” models.
In conclusion, the majority of wealthy individuals invest in the stock market. They hold their stocks for over a year to take advantage of lower fees and lower income taxes. Instead of using a broker, the affluent prefer to make their own stock decisions. Moreover, most do not pay close attention to the daily financial news headlines.
And, surprisingly, many wealthy individuals are frugal. They do not live above their means. Moreover, many affluent individuals do not place great importance on status symbols.