Personal finance guru Warren Ingram reckons that most truly wealthy people – those with investments worth over R40 million – have the following 10 things in common:
They built wealth for the long haul. Most of their sizable assets came from earned income and investing.
They’ve nailed the basics. This group didn’t become wealthy by taking significant risks. Instead, 86% of them said their most substantial gains came through buying and holding investments while 89% attributed their largest wins to investing in ordinary shares and bonds.
They’re optimistic (and opportunistic). They are generally very optimistic, and they’re ready to invest when they see an opportunity. One in five surveyed kept more than 25% of their assets in cash, ready to pounce when they see buying opportunities.
They use debt strategically. Nearly two in three use debt to build their wealth but not for lifestyle assets.
They keep a close eye on the Tax Man. They are very attuned to potential tax implications of their decisions.
They diversify by investing in valuable tangible assets. Almost half invest in these assets, including timber properties, investment real estate and farmland. About 20% collect fine art. Importantly, these are for diversification and capital protection, not really for capital growth.
They’re disciplined. About four out of five surveyed said investing to meet long-term goals is more important than making money for short-term wants and needs.
They had strong examples growing up. While the wealthy do not typically come from wealthy backgrounds; their parents did give them a robust set of values. About 80% said they were given these five values: academic achievement, financial discipline, work participation, family loyalty and civic duty.
They love giving back. About two-thirds said their family had a strong tradition of giving back to society.
They’re committed at home. About 86% are married or in long-term relationships.