What do the wealthy few own that makes them wealthy?
Stocks, Bonds and Real Estate combined accounts for 81% of their total wealth…!!!
And the reason is of course simple. These are the assets that generate passive cashflow and also provides capital appreciation.
If you look closely, cars and other luxury items account for only 3% of their total wealth.
So, whatever you are earning, your spending on extra luxury should not exceed more than 5% of your total wealth else, you are on your way to becoming broke no matter how much you earn.
Even big celebrities have gone bust just because they don’t know how to manage their finances.
We believe luxuries are just “branded liabilities”. We are not saying that should not buy them but buy only when you REALLY are able to manage your finances well. If you can’t afford to get two quantity of a thing “comfortably”, then don’t buy it!
Before that compound your wealth through investing in stocks and real estate and preserve your wealth through bonds.
To Your Investment Success