The other day I was talking with my sons about their favorite player Pablo Sandoval leaving the San Francisco Giants. My younger son couldn’t understand why the Panda would leave the team with whom he won three (3) World Series Championships. My older son said he had 95 million reasons to leave. Yes, he signed a five (5) year $95 million dollar contract. What does that mean? He, his kids and his grandkids will never have to worry about money again if invested correctly.
It got me to thinking about my tops clients and how they accumulated their wealth. Taking away the ones who inherited money the majority of my clients are self-made (one actually has won the lottery). As different as these people are they have some common characteristics.
Here are Five (5) Common Traits that stand out among these people.
1) Pay Yourself First. Every time they got a paid they put money into their accounts FIRST. Whether it is a 401K, an IRA, investment account or a money market account. They pay themselves FIRST before paying the bills.
2) Live within your means. These people live within their means. Meaning they run their life like a business. They know how much money they make, but more importantly they know how much they spend. They take on a limited amount of debt and don’t stretch themselves so thin they are living paycheck to paycheck. They take calculated risks with their money analyzing the risk and the consequences prior to spending their money.
3) Diversify. They own many investments like stocks, tax free investments, mutual funds, ETF’s, but also real estate and other alternative investments. It could be in the form of a rental property, a commercial building or a Real Estate Investment Trust, but to truly become and remain successful they realize they can’t own too much of one thing.
4) It’s doesn’t happen overnight. People don’t become rich overnight. They work hard, save consistently and their dedication pays off. Whether you are investing in the stock market, real estate market or opening your own business it takes time, patience and years.
5) Have a Plan. When you drive somewhere you have never been how do you get there? Do you use google maps? A GPS? Talk to an expert. Talk to someone who has been there and knows the road. Hire a good CPA. Find a great Realtor. Find an attorney you trust. Put together a team of experts and have a plan.
These five (5) traits aren’t the only traits, but they are some of the most common. If you think about it, it’s quite simple, but it’s not easy.
Do you think Pablo Sandoval just showed up to a game one day? No it took years of practice perfecting his trade and it has paid off.
With that being said I’m off to play catch with my boys!
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