Do you know that the richest one percent of the world have more money than the
remaining 99 percent this may sound absurd but it's the truth the world's
wealthiest people have many things in common and not surprisingly live much
differently than the remaining 99 luckily boss you don't have to have the
same amount of money that they have to start practicing what they do which is
why in this video i will be sharing with you how the one percent manage their
money and if you're new to the channel then hit the subscribe button below for
more life changing content method number one budgeting their
monthly expenses the first way the one percent manage their money is by
budgeting their monthly expenses you may wonder why they need a budget when they
have enough money to cover their expenses for instance how long do you
think someone as rich as bill gates at microsoft with a net worth of a hundred
billion dollars can last if they decide to spend one million dollars a day crazy
enough it would take him over one hundred 000 days to burn through this
immense net worth spending a million dollars a day however in most cases the
rich don't spend their money this quickly but the example is to make you
understand why it is important for you to do what the rich are doing if the
rich who have enough money and still budget their monthly expenses then i
think you should do the same but the top one percent do not just have a budget
they stick to it it is not enough to create a budget as most people do it is
more important to stick to that budget having a budget helps entrap their
spending and make necessary adjustments with the help of a budget they can
manage their money and know where it is going even before spending it the sad
reality is that many people who aren't as affluent as the one percent fail to
create or maintain a budget in their day-to-day lives this very often leads
to overspending the assumption of high interest debt and bearing more financial
stress than is necessary therefore if you are watching this video right now
and want to manage your money like the one percent you should start budgeting
your monthly expenses right away method number two reviewing and
negotiating their big three expenses if you've been reading about how to manage
money and attain financial independence then you must have come across the
advice to cut down your spending this is good advice but it depends on what costs
you are cutting down like most people you may be focusing on expenses that
have little effect on your finances the three biggest expenses that you have no
matter what life circumstance you're presently in
are housing food and transportation these three generally account for more
than 50 percent of your total expenses and if you want to learn how to manage
your money like the one percent you must learn to review and negotiate these
expenses the first expense and often the most costly is housing if you want to
reduce how much you spend on a monthly basis then this is where you should
start reducing your housing costs can involve selling your current house in
downsizing renting out a room or moving to a city with a lower cost of living by
doing these things you can lower or eliminate any mortgage payments you
currently pay or offset these costs with a tenant's cash receipts another big
expense is the cost of transportation we all need to get around and whether you
travel by car bus or bike there's always a cost involved quite frankly the cost
of transportation can dig deeply into your pocket therefore if you want to
succeed financially then you must learn how to manage it well
some simple ways to cut down this expense line item is to bike to your
destinations when possible rely on public transportation over driving or
sell off your car altogether sure this may make your life a little bit more
inconvenient in the short term but the savings will be well worth it the third
big expense is the cost of food obviously you can't go without food but
you can't control how you eat in order to save money for example it's usually
less expensive to cook your meals at home than to go to the restaurant so
working on your culinary skills can lead to some nice savings over time moreover
a little planning before grocery shopping can go a long way doing so will
not only allow you to get through your shopping list faster
but it will allow you to take advantages of sales at the same time method number
three paying down consumer debts as quick as possible
debt is one of the things that can quickly [ __ ] you financially i'm sure
you know this if you've ever had to pay back debt before being debt means using
money that could have been saved or invested to pay back creditors which
almost always comes with extra fees in the form of interest let's not gloss
over the fact that not all debt has the same impact on your finances consumer
debt is one of the debts in which you must do everything you can to pay it off
as quickly as possible consumer debts are debts that are a result of
purchasing goods used for individual or household consumption the easiest way
for you to understand consumer debt is that they are debts that are not used
for investment or running a business some common examples include credit card
debt student loans auto loans mortgages and payday loans amongst many others the
first reason why you need to pay this type of debt as soon as possible is that
most consumer debts come with high interest rates the longer it takes you
to pay them off the more money you will have to pay in interest as opposed to
what you think the one percent still incur some debt they see debt as a tool
and use it to gain financial leverage but when it comes to consumer debt they
pay it down as quickly as possible the first method the one percent used to
manage their debt is avoiding consumer debt in the first place this is the most
logical strategy as without debt you wouldn't have to worry about paying
anything back the rich can do this by spending less than they earn and living
within their means and if they do have debt the first thing they do is to
create a debt repayment plan they calculate how much debt they owe and
plan how they're going to pay it back they usually start with the ones with
the highest interest rates first they also pay at least the minimum on their
credit card every month and pay more whenever they can method number four
planning tax payments one other thing that differentiates the
one percent from the rest of the population is how they plan everything
relating to their finances including their tax payment those who earn more
money are expected to pay more tax and you may think that the one percent pay
more tax but that is not entirely true they plan their tax payment and explore
different ways to pay less tax using the advantages of the law that allow them to
lower their tax rate warren buffett who is one of the richest people on earth
once said that he paid a lesser tax rate than his secretary because of how he
earned his income this shows that the one percent have learned how to
effectively manage their money more than the remaining population they hire the
best financial advisors who use their experience to manage their money for
them and this helps them save a lot of money in tax
they make most of their income through investments and other means which allows
them to pay a lesser tax rate than those who make their money through employment
income another way that they strategize their tax remittances is by separating
their personal money from their business related funds
most of the one percent are either entrepreneurs or business owners and
they earn their money through their business or company this is another
reason why they can reduce the amount that they pay as taxes a percentage
method number five leveraging credit card rewards when it comes to the use of
credit cards there is a hot debate whether you should use them or not most
people enter into debt because of their uncontrolled use of credit cards the
main challenges that people use credit cards face are upfront card costs high
interest rates and the habit of overspending that it can cause however
there are some benefits of credit cards and the one percent have learned to use
them to their advantage they are more deliberate about their finances and that
is why they can take advantage of the rewards these cards can offer the first
thing you must understand is that credit cards are not all evil
they can act as a safety net if you find yourself without cash on hand but you
should only use them in this way if you have the money in the bank to cover this
expenditure when you learn to use credit cards responsibly the upsides can be
very lucrative many credit card companies give their users rewards to
encourage them to use their cards these rewards usually come in three forms
which are cashback rewards mileage and points the one percent usually qualify
for most of these benefits because they maintain a good credit history by paying
their balance on time when you use your card responsibly you should then expect
some rewards from them cashback rewards is the simplest type of reward that
comes with using credit cards in this example they pay a certain percentage of
the total amount you charge to your card back to you mileage rewards typically
give you discounted costs for airline tickets if you travel frequently and an
extra bonus for using a credit card when you travel the third reward option is
points credit card companies will give you certain bonus points each time you
meet certain requirements which are usually tied to spending levels the
points can later be converted into cash which can be used for purchases as well
overall the rich use credit cards to gain financial rewards and you can too
if you use them appropriately method number six exploiting low
interest debt tools the 1 see debt as a tool and exploit it
well they usually look up for debts with low interest rates that they can easily
pay back they don't take loans to buy consumable items either rather they take
loans to invest in their business to build lasting wealth they use that as an
advantage to help them do more than they would have been able to do with their
own money therefore they take loans to build assets and not to buy liabilities
and they also avoid credit card debts as much as possible if you want to manage
your money like the one percent you must be able to differentiate between good
debts and bad debts good debts are the debts that help you build assets more
frequently and accumulate wealth well bad debts are the ones you spend
acquiring liabilities method number seven investing excess
cash into self-development one of the most important investments
that the top one percent make is an investment in their self-development the
top one percent don't care how much they spend on self-development because they
know that the reward is worth it they attend seminars and workshops and they
read at least every day they are always curious and eager to learn something new
they develop every aspect of their lives including their spiritual life finances
business health and relationships whenever they can't read they may listen
to audiobooks and podcasts in their car if you want to be like the one percent
then you must be ready to do what they are doing and now you know exactly what
to do thanks for watching if you want to go
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