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Investing 101

How to invest like the rich

 

It’s no secret that the rich keep getting richer. Listed below are habits and strategies that the wealthy all possess- use these strategies and adopt some of their attitudes and you can also be on your way to building wealth like the 1%.

The 1% Have Multiple Income Streams.

The wealthiest people do not solely depend on a single salary to generate wealth and cash flow. Salaries have limited growth potential, and depending on a salary is not good risk management. If you lose your job, and that salary is your entire cash flow, it puts incredible strains on your finances and livelihood. Instead, the 1% put a lot of effort and resources into developing multiple income streams. Income streams can include businesses, dividend investing, private equity investing, fixed income/bonds, and definitely real estate.

The 1% Not Only Earn Differently, They Spend Differently.

“The philosophy of the rich and the poor is this: the rich invest their money and spend what is left. The poor spend their money and invest what is left,” Robert T. Kiyosaki, author of Rich Dad Poor Dad. For instance, the 1% will budget how much money to save and invest (perhaps 20 – 35%), before determining how much money they have leftover to spend on rent, necessities, and extras like vacations. In addition, the rich are spending less than what they make so that they can save more and ultimately invest more. The rich get richer by spending like they’re poor and the poor remain poor by spending like they are rich.

The 1% Know The Virtue of Patience.

Wealthy individuals work towards long-term goals, instead of short-term goals. They understand the power of compound interest and why it pays to start young and let your money work over time. They would rather invest in future income-generating assets than in something that will lose value immediately upon purchase.

The 1% Take More Risk.

We’ve all heard the phrase, “the higher the risk, the higher the reward,” and while this typically holds true, you don’t have to take huge risks to start making better money decisions. To guard yourself against risk, always familiarize yourself with the sponsor’s track record. In 2018, DiversyFund investors saw 17.3% returns and in 2018, investors saw 18% annualized returns.

Many outside of the 1% do not invest because they do not know how, or are intimidated by the process. DiversyFund’s online platform makes investing easy and quick, and our Growth REIT is SEC-regulated. This means anyone can invest- accredited or not.

The 1% Let Their Money Work For Them.

The 1% has less cash in savings accounts, while the other 99% keep more money in regular savings accounts. Money in a savings account is not working for you- it is actually losing value due to inflation. This is why it is critical to not just save money, but also to invest it. In fact, more than 93% of the 1% owns $10,000 or more in stocks, according to U.S. household wealth trends data from the economist Edward Wolff.

When you invest in real estate through DiversyFund’s Growth REIT, all dividends are reinvested, and the power of compounded interest leads to exponential growth. That means your money is earning money, which is earning money…which is earning money. Talk about putting your money to work, no simple savings account is doing that!

The 1% Invest In Real Estate.

Real estate has averaged over 11% since 1970, while the S&P 500 has averaged just 7% (adjusted for inflation and accounting for dividends). It’s no wonder that 90% of the world’s millionaires have had real estate play some sort of role in building their wealth.

Until now, institutional-grade real estate assets were exclusive to the ultra-wealthy. The thought of high down payments, transaction costs, and hiring management teams have been great barriers for everyday investors to get started in real estate. With REITs, however, you can buy shares of a professionally-run portfolio of real estate. With DiversyFund’s Growth REIT, you only need $2,500 to start investing like the 1%.

To learn more about the DiversyFund Growth REIT, visit us here.

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