How do 1% of the rich in the world manage their finances?



If someone tells you how easy it is to get rich, they are fooling you.  You won't be rich overnight.  But if you persist, you will definitely make progress over time and get closer to the finish line.

Freelance mode allows you to wake up every day with a smile on your face and do whatever you want. Of course, this is not easy.

If you want to become financial freedom, let's follow financial principles below.

1. Take advantage of tax benefits and deductions

Imagine you are playing a game with the IRS.  And you definitely want to find a way to win this game.  Or, at least, know the rules of the game.

 The same goes for taxes.  If you have a good understanding of your local tax codes and deductions, you can save money on taxes each year.  Example: you buy a Tesla for just $78 per month.

- You bought a Tesla Model 3. However, you have a way to get this car as low as possible. You have  to pay $4,437 in taxes and other fees.  In addition, you also have to pay 640 USD / month (7680 USD / year) insurance for the car.  Altogether, the total cost of your Tesla is $12,117/year.

- Although you have to pay the money yourself, you will get a $2,500 discount on the streetcar tax.  you are also eligible for a tax credit of $3,750.  If these two are deducted, the net cost of the Tesla drops to $5867 / year.

How do 1% of the rich in the world manage their finances?How do 1% of the rich in the world manage their finances? / ph: pexels

If you buy the car for business use, you can deduct $1,438 in interest.  You can also deduct $4,437 USD for taxes, registration fees, and service fees.  Plus, for the first year, you can cut Tesla's extra costs by $8200.  In total, you could cut $14,075 or save $4,925 in taxes.

The net cost (5867 USD) minus the tax savings (4,925 USD), so the total cost of buying a Tesla is 942 USD / year which is 78 USD / month.

 You should research taxes and determine which taxes are deductible and which are not.  By doing this, you can save a decent amount of money each year.

2. Adjusting your lifestyle

If you want to improve your financial situation, all you need to do is cut back on your spending appropriately.  

Clear spending planning will help you avoid wasteful shopping and spending. In addition, you should pay attention to the monthly revenue and expenditure and see if you are spending properly.  This little thing will make you rich. 

So every month, you should always make a spending plan with a fixed budget and review the bank statements.  Even though it only takes a few minutes, it will tell you where you are overspending and what to cut.

You should write down your monthly expenses then compare them with your income. And then by all means make the cost as low as possible. By doing so, you will escape the vicious cycle: making money and paying off debt.

If you want to improve your finances and live a prosperous life. Let's start implementing the above financial habits.

 If someone tells you how easy it is to get rich, they are fooling you.  You won't be rich overnight.  But if you persist, you will definitely make progress over time and get closer to the finish line.

How do 1% of the rich in the world manage their finances?

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