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5 Financial Habits That Keep the Wealthy Rich

A financial planner who works with millionaire clients says many have similar habits that keep them wealthy. His richest clients have a financial plan and stick to it, and they don’t try to time the market. They also tend to look for ways to reduce their taxes and over-plan for retirement.


Most wealthy people have ways of making their money last. After years of advising high-net-worth individuals, financial planners has observed several common traits among his clients. “The vast majority of our clients are the millionaire next door folks,” he says. “They weren’t huge income earners, but just really disciplined savers, socking money away into 401(k)s and brokerage accounts, and accumulated over $1 million when they’re ready to retire.”

In experience, Planners has identified five key strategies that help wealthy people maintain and grow their wealth over time.

1. Wealthy People Have a Financial Plan and Stick to It

Wealthy individuals who keep and build their wealth consistently have a comprehensive financial plan. This plan extends beyond basic saving and spending habits. “You need to know all the nuts and bolts about a family’s budgeting and expenses, what kind of insurance they have, what their estate planning looks like in terms of their legal documents, and their goals for potentially leaving a legacy behind for either family members or charitable organizations,” Planners explains.

This thorough planning process often includes considerations of taxes, employer benefits, and investment strategies. Wealthy people seek professional help to create and adhere to this plan, ensuring they know the necessary steps to take today to secure their financial future.

2. They’re Neither Worried About Their Investments Nor Managing Them Often

Most wealthy individuals do not obsess over stock trading. They avoid trying to time the market or chase after the next hot stock. Instead, Experts encourages clients to adopt a long-term investment perspective. “We don’t try to outwit the markets. We just want to harness the power of the markets to give our investors the highest probability of success,” he says.

For many of Experts wealthy clients, investing is about patience and maintaining a long-term view. “We know we’re not going to be right every year, or every three years, or even every five years. But, we know that over time, we are giving our clients the highest probability of success.”

3. They’ve Over-Planned for Retirement

Wealthy people maintain their financial stability in retirement through meticulous planning. Experts notes that his clients often over-plan for their retirement years. “We use the life expectancy of age 96 for our clients because we know there’s about a 25% chance that for a healthy 65-year-old couple, at least one of them will live to age 96.”

By preparing for a longer retirement, wealthy individuals can ensure they maintain their standard of living throughout their later years. “At the end of the day, the last thing we want is for you to run out of money.”

4. They Find Ways to Reduce Their Taxes

With careful planning, wealthy individuals reduce their tax burdens, allowing them to keep more of their earnings. They understand how to take advantage of tax breaks and incentives to minimize their tax liabilities both now and in retirement. Reducing taxes is a critical component of their overall financial strategy, influencing decisions on investments and charitable donations.

Paying less in taxes allows wealthy individuals to retain more of their income over time, which is essential for maintaining their wealth as they move into higher tax brackets.

5. They Incorporate Charitable Giving into Their Financial Planning

Wealthy people often include charitable giving in their financial plans, which not only fulfills a sense of obligation to give back but also offers tax benefits. Charitable donations can take various forms, including monetary gifts, shares of stock, or distributions from an IRA after a certain age.

Charitable contributions can lower taxable income, which in turn reduces income taxes and Medicare premiums in retirement. Thus, donating serves multiple purposes, benefiting both the donor and the recipients.

The Bottom Line

Wealthy individuals employ several key strategies to maintain and grow their wealth over time. By having a comprehensive financial plan, adopting a patient investment strategy, over-planning for retirement, finding ways to reduce taxes, and incorporating charitable giving into their financial planning, they ensure long-term financial stability and success. These habits, observed by financial planners, highlight the disciplined approach that helps wealthy individuals remain financially secure.

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