rich

Best Money Tips: Tax Secrets of the Rich

Amy Lu — Thu, 05 Jul 2018 08:30:11 +0000

Welcome to Wise Bread's Best Money Tips Roundup! Today we found articles on tax secrets of the rich, ways to adopt a zero-waste lifestyle, and household chores you should outsource.

How to Profit From China's Growing Upper Class — Even If You Don't Speak Chinese

Carrie Kirby — Mon, 14 May 2018 08:31:13 +0000

When I lived in Beijing in the late 1990s, most Chinese people were poor compared to their American counterparts. I remember visiting bars that catered to foreigners with local friends in tow, and having them marvel that the price of one drink could feed them for a week. People were considered well off if they owned a car or had an apartment with hot water on demand.

Things have changed. While poverty is still common in China, the wealthy class has ballooned. China is now in second place, after the U.S., for the most ultra high net worth individuals. And the wealthy class there is expected to keep on growing, with the number of Chinese millionaires expected to surge 41 percent to 2.7 million by 2022, according to Credit Suisse.

This means that there are lots of Chinese people in the market for goods and services their parents couldn't afford. Here are some ways you could cash in.

Teach English online

Teaching English for a low salary or as a volunteer has long been a way for new college grads to see the world. But the combination of global broadband and growing Chinese wealth has created an opportunity for Americans to make decent money teaching English from the comfort of their homes. VIPKID connects English-speaking teachers with children in China for one-on-one video lessons that pay $14 to $22 per hour. (See also: How to Earn $1,000 a Month or More as an Online Tutor)

Be a butler

In 2016, the Netherlands-based International Butler Academy opened a training program in Shanghai to serve the growing demand for butlers among high net worth households in China. English or English-appearing butlers who are willing to travel to China can start at $60,000 — nearly 50 percent more than beginner butlers earn in the West. Staffing agencies report that the premium is driven by the status boost that comes with employing a bona fide Downton Abbey-style butler. (See also: 14 Jobs that Capitalize on the Growth in Rich Households)

Rent your vacation property to Chinese tourists

Airbnb has been pushing hard into the Chinese market, adding 24/7 Chinese-language customer support and locally used payment options. At the same time, the number of Chinese visitors to the United States has been exploding, with more Chinese visitors than any other country except Mexico.

If you own a vacation property in a popular Chinese destination, such as Los Angeles, or near a national park, you can make your listing more attractive to Chinese travelers by providing a high level of service, since Chinese travelers are more used to hotels than home sharing. Discounts for longer stays help, too. If you have Chinese visitors coming in, thoughtful touches such as having a hot water kettle and house slippers available can help them feel more at home. (See also: 5 Easy Ways to Make Good Money From Airbnb)

Teach skiing

Skiing didn't really take off in China until the recent wealth boom, with the number of domestic ski areas rocketing to 568 from just six between 1996 and 2016. The run up to the 2022 Beijing Winter Olympics is further ratcheting up interest.

The combination of booming popularity and a limited history means that ski instructors are in short supply in China. A Club Med recruiting page promises ski instructors who travel to China perks such as accommodations, meals, and free flights in addition to an "attractive wage." How attractive? While ski instructors in the United States earn $15 to $20 an hour, in China you can make $20 to $30. Although speaking Chinese would increase your chances of getting hired, resorts are increasingly accepting that most available ski instructors don't.

Host a high school student

The number of international students earning high school diplomas in the United States has skyrocketed over the past decade, and the trend is led by China, whose students make up 46 percent of all international high school students here. Some of these kids are in U.S. boarding schools, but others are in private day schools and even public schools. These students need host families, who can earn $500 to $600 monthly per student for providing room and board.

Sell your property to a Chinese investor

To the chagrin of many would-be homeowners in certain markets, U.S. real estate has become attractive to Chinese investors making all-cash purchases. In fact, Chinese are now the top foreign buyers of U.S. real estate.

If you are looking to get top dollar, cash, for a property, it may be worthwhile to enlist an agent who knows the Chinese investor market well. Just don't expect this tactic to win you any friends among neighbors who might not like to see neighborhood properties turn into investor-owned ones.

Be a private schoolteacher or administrator

As I mentioned in the first item on this list, teaching in China used to be a low-earning opportunity for young people who wanted an adventure. With the growth of wealth in China, however, comes many domestic private schools who want English-speaking teachers and administrators, and are willing to pay for them.

Experienced teachers can earn $3,000 or more per month, and while that might not sound like big bucks, if it comes with a furnished apartment, airfare, and halftime pay over holiday breaks, some estimate you could sock away at least half your salary.

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This article is from Carrie Kirby of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

15 Jobs That Capitalize on the Growth in Rich Households

Carrie Kirby — Wed, 25 Apr 2018 08:30:10 +0000

The rich keep getting richer. Even among high net worth families, the fastest growing group is the richest — those with $5 million or more in investable assets, according to the Phoenix Wealth & Affluent Monitor. That group grew 8 percent in the U.S. in 2017, and the high net worth market overall (meaning people with at least a cool million in liquid assets) grew by 6 percent.

What does that mean for you? Maybe you won't be entering the 1 percent anytime soon, but could you work for the 1 percent? Here are some jobs growing in demand along with the wealthy class.

1. Butler/personal assistant

Perhaps stimulated by the popularity of Downton Abbey on PBS, the profession of butler has been on the rise. Times have changed, of course. Women can now be butlers as well as men. And while today's butler may share a lot of the duties that Carson carried out on Downton Abbey, such as supervising the rest of the household staff and decanting fine wines, they must also be comfortable with more modern responsibilities, such as acting as a concierge to score concert tickets, and making sure handheld devices are charged up.

The starting salary is for a butler is around $30,000, but goes up steeply from there. Butlers work an average 60 hours a week and earn between $50,000 and $150,000, according to the International Butler Academy.

Another source of demand for butlers is high-end resorts and condo developments, which are increasingly offering butler service as a perk. Sandals, for example, offers butlers with their highest-end suites, who provide services such as unpacking suitcases and bringing you drinks poolside. They book tours for you, and even anticipate your desires, such as having a bubble bath and iced Champagne waiting when you return to your suite.

Today's butler may also serve as a personal assistant, or that may be a separate job. A PA handles the boss's calendar, keeps track of correspondence, and runs errands, among other tasks.

2. Chauffeur

When I was a business reporter, billionaire Larry Ellison once visited our newspaper. I waited with other staff in the lobby while his sports car pulled up to the front door. He got out of the driver's seat, and one of his bodyguards switched over from the passenger seat to go park the car. To me, this epitomizes what it's like to be super rich: You can drive when you want to, but you never have to drive when you don't want to.

Clearly, the main job of a private chauffeur is to drive people around. You'll also be expected to keep a household's cars clean inside and out and in working order. You may need to keep the car stocked with what your employer needs, whether it's the morning paper for the ride to work or clean glasses and Champagne for a night out. You might be called upon to sit in the car for hours waiting for the "principal," as servant's employers are typically called. Personal drivers earn about $40,000 a year.

Another option for those who would drive the rich is to work for a private car service. While on-demand ride hailing is a new thing for the middle class, it's been available to the rich pretty much forever.

3. Nanny

Lots of middle income people hire nannies, but the ultrarich have their own style when it comes to child care. It's common for wealthy families to list teaching credentials as requirements for the job. In fact, I have a kindergarten teacher friend who interviewed with a wealthy Silicon Valley family to be the nanny for just one of their children; the other child would have his own nanny, and each nanny would have a car to drive her single charge around in.

But that's nothing! Check out this UK posting for a nanny position that went viral: It asks for a baby sitter with a degree in child psychology, self-defense training, and a willingness to travel as often as three times a week among the family's homes on four continents.

But with great responsibility comes great compensation: The ad also offers a $140,000 salary and access to the family Maserati (unless you prefer to run family errands in the Porsche). This may be an extreme case, but it's pretty common for wealthy families to take their sitters on vacation; I know several nannies who have enjoyed these trips despite the work involved.

If you have high-end nanny cred but would rather not live with a single family, perhaps a career as a vacation nanny is for you.

4. Closet nanny

A friend told me she interviewed a nanny once who had previously worked as a "closet nanny." My friend was slightly disappointed to learn that this job entails not secret closet assignations for diaper fetishists, but merely cleaning up people's drawers and closets a couple of times a week. San Francisco company Clean Slate Interiors calls this service organizational maintenance, and charges $160 per hour for two organizers to keep up any kind of system that the company previously set up.

5. Pet nanny

Americans spent 70 percent more on pets in 2017 than they did a decade earlier, so it's not too surprising that there are more opportunities than ever providing high-end pet care. It may not be unusual to hire a pet sitter to stay in your home while you're on vacation or to walk your dog during a long workday, but the true elite hire live-in nannies to care for their pets 24/7.

You could also work at a high-end pet boarding, day care, or grooming facility. Americans spent $5.76 billion on grooming and boarding in 2016. For pet owners who are merely well off, that may mean sending your dog to a $200-a-night spa when you travel. But for the ultrarich, there are services such as The Dog Store in Manhattan and the Hamptons, where you can pay $350 to $1,500 to have your pooch prepped for a trip with beauty treatments and a relaxing massage. (See also: How to Make $400+ a Week as a Pet Sitter)

6. Cosmetic surgeon

Cosmetic procedures in the United States have increased by nearly 50 percent since 2007. This growth in demand has led to predictions of a shortage of cosmetic surgeons. Of course, this job requires years of expensive and rigorous training, but if you happen to be a medical student looking for a specialty, this is one that's growing with the size of the wealthy class.

7. Landscape architect

This is not a gardening job (although those are in demand with the growth of rich households as well). A landscape architect has a bachelor's or master's degree, has passed the Landscape Architect Registration Examination (L.A.R.E.), and knows how to use computer-aided design software. Median pay is $63,400 per year. These professionals spend most of their day at a computer, designing the models for the grounds of grand estates, as well as campuses and public spaces.

8. Estate manager

Different from a butler, this job involves managing any and all properties owned by the employer. Just as an operations manager for a corporation would be responsible for the campus, an estate manager may hire and oversee the grounds crew, make sure an emergency HVAC issue gets taken care of, and ensure security at all times. It's not uncommon for these managers to come from the ranks of corporate America or the hospitality industry, doing the same thing for private households that they once did for whole companies or grand hotels.

9. Housekeeper

There is overlap in listings for housekeepers, estate managers, and butlers, but in general a housekeeper's job is going to be more focused on housework. One housekeeper listing offered $30,000 to $55,000 a year, plus lodging, car, a phone, and access to a pool and gym. Required duties included laundry, closet organization, inventory management, and cooking.

10. Wealth planner

Any ordinary Joe can sit down with a financial planner and get advice about funding his 401(k), but elite wealth planners provide much more extensive service. They tend to devote their time to just a few clients, or may work exclusively for one family, planning not only for individual households' wealth but also making a long term plan for the children and grandchildren, as well as multigenerational charitable giving plans.

11. Personal/private chef

A private chef works for one family, making all their meals and sourcing ingredients. Personal chefs — who are accessible to the merely affluent — typically work for multiple families, making and packaging meals for the fridge or freezer. Then there are chefs who focus on catering home dinner parties. All these fancy cooks are in demand as the rich look for ways to save the most finite resource: time.

Typically trained in cooking academies, with restaurant experience, being a personal chef to multiple clients can be a nice small business with less overhead and risk than a restaurant.

12. Personal trainer

The median pay for a trainer in the United States is only $18 per hour, but if you land a job at an elite boutique gym, you could earn much more. These places charge as much as $50,000 per year and count supermodels among their clients. To work at this echelon, you'll need the best certifications and experience, and will be expected to be able to advise on diet and supplements as well as workouts. Some wealthy gym rats pay two trainers to work with them at once: One to run the workout and the other to observe and give pointers on form.

13. Private jet interior decorator

Sure, you could be a regular interior decorator like a schmuck, but why not shoot for the sky (literally)? Private jet decorators design the client's ideal cabin configuration, pick the perfect upholstery, and if they want every fixture plated in gold or a movie editing studio in the sky, they need only say the word.

In general, the private jet market has soared. New Flight Charters, a private jet charter company, has reported 12.5 percent year-over-year growth. Whether the jet is owned by just one rich family, time shared, or chartered, the growing popularity of private flight means there are more jobs for pilots, stewards, and maintenance crews as well.

14. Yacht crew

The yacht industry was expected to grow a whopping 20 percent last year, and yachts are getting bigger, with the average size now up to 51.6 meters.

These mega yachts need crews: captains, mates, deckhands, engineers, stewards, chefs. Salaries range from $2,000 to $25,000 a month, depending on the role. You can even be hired to just live on someone's boat, like a house sitter — but, you know, on a boat.

15. In-house tech support

When you're a billionaire, you don't call Microsoft tech support and wait on hold. You leave that aggravation to your family systems administrator. For example, RDV Corporation, established by the billionaire DeVos family to take care of all their household needs, is hiring a Senior Systems Administrator responsible for "ensuring that technology needs are met in family homes, offices, marine vessels, and other locations." Tasks include desktop support, supporting Apple TV, drones, and testing new products. Requirements include a bachelor's degree and five years working in tech support.

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This article is from Carrie Kirby of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

10 Small Towns With the Most Millionaires Per Capita

Carrie Kirby — Thu, 05 Apr 2018 08:00:06 +0000

When you think of millionaires' neighborhoods, you might picture Manhattan's Park Avenue, San Francisco's Pacific Heights, or Los Angeles' Rodeo Drive. But did you know that a third of the towns with the most millionaires per capita are little more than hamlets with around 20,000 residents?

What do these mini-cities have going for them to attract the wealthy in droves? For some, it's scenic beauty and recreational opportunities; others seem to make their own millionaires with rich natural resources or high-paying jobs.

We can't promise you'll be rich if you move to one of these towns, but who knows? A little gold dust might rub off on you.

1. Los Alamos, New Mexico

Los Alamos isn't just a small town with the highest density of millionaires — it has more millionaires per capita than any municipality, big or small, in the nation, and it has held that spot for more than a decade.

The funny thing is that Los Alamos doesn't look like a wealthy town. It doesn't have the Fendi boutiques or Michelin-starred restaurants you would associate with the lifestyles of the rich and famous, and it doesn't have the beach or ski resorts that tend to draw millionaires to other locales. There is only one explanation for the density of millionaires: The Los Alamos National Laboratory, where engineers and other highly trained employees earn an average annual salary above $100,000.

Population: 12,019

Percent millionaires: 11.63

2. Summit Park, Utah

This ski destination became the location with the second most millionaires per capita in 2014 and hasn't slipped since. You might not have heard of Summit Park, but you have probably heard of nearby Park City, host to Robert Redford's famous Sundance Film Festival. That's one explanation for the density of millionaires in Summit Park; spillover from glamorous Park City.

Population: 7,775

Percent millionaires: 10

3. Juneau, Alaska

It was riches that originally created Juneau; the Gold Rush, to be exact. Today's Juneau millionaires probably don't trace their wealth to gold, but they may have other valuable things found under the ground to thank. Alaska in general has an embarrassment of millionaires — Phoenix Marketing International puts it at number five among all states for millionaires per capita. This probably has to do with the state's richness in natural resources such as petroleum.

Population: 31,275

Percent millionaires: 9.1

4. Williston, North Dakota

Many farmers in this rural town receive tens of thousands of dollars per month in oil royalties, making for a low-key type of millionaire who would look less out of place at Farm & Fleet than at Emporio Armani.

Population: 14,716

Percent millionaires: 8.4

5. Torrington, Connecticut

This booming town in Litchfield County has long been a getaway for Manhattan's elite looking to escape the city. Gorgeous scenery, along with great food, shopping, and culture make this a coveted area for the wealthy.

Population: 36,383

Percent millionaires: 8.3

6. Edwards, Colorado

The explanation for the millionaires in Edwards is similar to the explanation for Summit Park: proximity to a ritzy ski town. Edwards is quite near Vail Ski Resort. Don't expect to see all those millionaires midweek though, since they may not live in their mansions — ahem, cabins — full time.

Population: 10,266

Percent millionaires: 8

7. Gillette, Wyoming

Another mining town, Gillette made its fortune off coal as well as uranium. You can catch a glimpse of what made so many of these Cowboy State residents wealthy at the free Campbell County Rockpile Museum.

Population: 29,087

Percent millionaires: 8

8. Vineyard Haven, Massachusetts

All you need to know about why this town has so many millionaires is this: It's located on the island of Martha's Vineyard. Presidents vacation there. Bill Gates, Oprah Winfrey, Larry David, and David Letterman own summer homes there or are seen around town regularly.

Population: 2,114

Percent millionaires: 7.8

9. Oak Harbor, Washington

You might have never heard of this town, but another familiar name can explain why it has so many millionaires: Microsoft. Oak Harbor is located on Whidbey Island, a short drive from Seattle. Billionaires Bill Gates and Jeff Bezos don't live there (they're neighbors in nearby Medina), but it's likely that Microsoft midlevel managers swell the ranks of millionaires in Oak Harbor.

Population: 22,075

Percent millionaires: 7.5

10. Jackson, Wyoming/Idaho

The Jackson Hole you've heard so much about isn't actually a town, it's the valley that hosts the town of Jackson. So, you guessed it; this is another ski playground for the rich, which encompasses areas in both Wyoming and Idaho. It also happens to be the most economically unequal metropolitan area in the U.S., with the top 1 percent bringing in an average annual income of $20 million and the bottom 99 percent averaging just below $94,000, according to the Economic Policy Institute.

Population: 9,577

Percent millionaires: 7.4

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This article is from Carrie Kirby of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

Cash Might Make You Happier, But Investments Will Make You Richer

Annie Mueller — Tue, 18 Jul 2017 08:30:17 +0000

Having a stash of cash feels great. Liquid wealth makes you feel more secure, because you can predict how you will handle whatever life throws your way. The feeling of satisfaction is real, but ultimately, the rewards of keeping your wealth in your checking or savings account are much less satisfying. If it's long-term wealth you're after, you need to start investing.

You're losing money

In the battle between interest and inflation, inflation wins when you keep your cash in a typical savings or checking account. You'll get very little in interest from a bank account intended for day-to-day use: typically, 0.01 percent to 0.03 percent for a checking account, and up to 1 percent for a savings account. Meanwhile, the average annual inflation rate is 3 percent. So your stash is losing value every year, as inflation climbs faster than interest grows your money.

The numbers work out pretty grimly in that scenario. Imagine you put $100,000 in a savings account with a 1 percent interest rate, and add $500 every month. Every year, you'll gain that 1 percent interest but lose 3 percent of the value, due to inflation — meaning you come out 2 percent behind annually. In 10 years, you'll have $173,522 but it will only be worth $129,117.17.

On the other hand, the return on stock and real estate investments is staying stable at 7 percent. That's the real rate of return, meaning it's adjusted for inflation. After 10 years, your $100,000 investment, with the monthly $500 addition, will have an actual value of $267,357.54.

Why wouldn't you immediately put your money into a higher-yield investment? For most people, the hesitation comes from fear of taking a big risk with money.

What's the big risk?

Humans tend to be risk averse. This risk aversion has done a lot for us, in an evolutionary sense.

Risk aversion is also helpful in finances in many instances. When it comes to getting high-interest return on your savings, however, risk aversion can hinder you. To maximize your savings, you need a high return that will outrun inflation and exponentially add financial value to your nest egg.

High-return investments, unfortunately, are also higher risk investments. If you're unfamiliar with the stock market, investment portfolios, and the like, these types of high-return investments can feel terrifying. But you can overcome that fear.

First, start a relationship with a financial investment professional. Ask for recommendations from people you know and trust, who are not struggling financially. Second, don't invest all your money in one high-yield investment. Diversify; if one investment doesn't grow as predicted, it won't topple your entire savings plan. Third, you don't have to invest all your money in what feels riskiest. You can set up a CD, invest in bonds, or invest in real estate. All require some investigation to understand the risk and potential return.

Get professional insight on the options that appeal to you and make a well-informed decision. It's never about eliminating risk; that's not quite possible. It is about minimizing risk and maximizing return. You do both by investigating, seeking expert insight, and diversifying the way you save your money.

Save yourself from hasty decisions

Keeping your wealth in a less-liquid state helps you financially by delaying your financial decisions. If your main funds are tied up, for example, you can't immediately invest in Cousin Jimmy's startup. Even if you really, really want to.

Maybe Cousin Jimmy is a genius, and you do want to invest; still, it's good to have to think and compare numbers. Can an investment in a family business give the same high-interest return on investment? What's the risk, compared with the risk you're already taking? How long before you'll see a return?

Having time to think will help you avoid hasty decisions you might regret. Whether it's investing in a family member's venture or purchasing that dilapidated house in an up-and-coming area, time is on your side.

But I still want to feel happy

A recent National Center for Biotechnology Information study shows that higher levels of happiness are linked to keeping cash on hand. Happiness is great! We all want more of it. But you can get the happiness that cash brings while also setting yourself up for long-term financial rewards.

Having money at the ready contributes to feeling secure. You can get that financial security by reducing high-interest debt and setting up automated savings so that you can keep a reasonable amount of cash at the ready. Experts recommend having three to six months' worth of living expenses; but you can be smart about how you save that cash reserve, as well, by keeping it in an interest-bearing savings account or a short-term CD. When your reserve grows over your emergency-fund amount, invest it rather than hoard it.

Remember, you'll want to feel financially secure later in life, too. Smart financial moves now contribute to your happiness in the present and the future.

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This article is from Annie Mueller of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

5 Reasons Being a Millionaire Is Overrated

Brittany Lyte — Fri, 12 May 2017 09:00:10 +0000

All told, 10.4 million households in the U.S. have $1 million or more in investable assets, according to a 2017 study by investor research firm Spectrem Group. Sounds pretty nice, doesn't it?

You may want to reconsider those feelings of envy. Does the money really make life any more enjoyable? As Bill Gates once said, "A hamburger is still a hamburger, millions in your pocket or not." Read on for our roundup of reasons why you should feel perfectly content to live on Main Street.

1. Happiness can be bought — but most rich people aren't doing it right

Do you have enough money to eat, pay for health care, and make the rent? If so, you're off to a good start. Research shows that as long as your basic needs are met, you've got as much of a shot at living a joyful life as anybody else.

In fact, the relationship between money and happiness is surprisingly weak. A positive experience, such as working hard to attain a goal or falling in love, will make you happier than a new Porsche. Over time, the Porsche will rust, dent, and age. The car simply won't be as thrilling to drive as it was when you first bought it. But the memory of a first love or receiving a reward for your hard work won't as quickly deteriorate.

Indeed, money can be used to have more of the positive experiences that make us happy. But research shows that people who are well-to-do don't often spend their money this way.

2. Small delights bring more joy than big, expensive ones

A series of small, frequent treats — a pedicure, a day at the beach, a box of chocolate-covered strawberries — is more fulfilling than a big, blowout, annual gift to yourself. In this way, even millionaires are limited by their funds. If a millionaire wants their fortune to last, they can't spend it all at once. And if the goal is happiness, money should be spent in a way that brings constant delight, even if those delights come in smaller packages.

Remember: Eating an entire, 12-slice cake in one sitting is not 12 times more pleasurable than eating one slice at a time. Similarly, most people who play the lottery would prefer to win a $50 ticket and then another $75 ticket at a later date, rather than win a one-time lump sum of $125. So, even if you can afford to treat yourself to one big present, you'd be wiser — and happier — to gift yourself a series of small ones instead.

3. Anticipation promotes happiness

If you're rich enough to buy yourself every new gadget the moment it hits the market, you're robbing yourself of anticipation — that feeling of yearning and desire which delivers a more intense feeling of happiness when we finally attain the thing from which we've been deprived.

The pleasure that arises from immediate consumption simply doesn't match the staying power of the happiness we feel when we get something we've been yearning for. Here's an example from researchers who study happiness: People often derive the most joy from talking about and looking forward to a vacation than the actual experience of the vacation itself.

4. A fancy vacation might sound like bliss, but it can often bring problems

The Notorious B.I.G. said it best: Mo' money, mo' problems. Here's another way to think about it: People buy big ticket items expecting one thing, but often they get something else. Let's take a yacht, for example. Warm sun, deep ocean swims, navigating through foreign seas — what could be bad about owning a 200-foot yacht?

Well, what about the huge, hidden price tags — such as the cost of storage and maintenance? What about mosquito bites, and stormy seas, and engine glitches, and that fear of sharks you never knew you had until you bought the darn thing?

Consider how it might feel to have a yacht on which to sail around the world, but you can't find a willing companion to join you for the tour. Because, you know, some people have to work. But not you! You're rich and you've got a yacht — and now you have a whole new set of troubles to worry about. Happiness is in the details, but it's easy to get caught up in the illusion.

5. Rich people tend to spend more time working

Our happiness is largely determined by how we spend our time. As a person's income rises, they typically begin to devote more time to working, running errands, and shopping. These activities are known to drive stress and anxiety — not happiness.

More than anything else, it's leisure time that breeds happiness. But, of course, it's a balance. If we're not working enough, we often find ourselves right back in the throes of stress and anxiety. "Am I spending my time in a way that's worthwhile? What's the meaning of all this stuff?" Striking a balance between work and play is important whether you're a millionaire or not.

This article is from Brittany Lyte of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

5 Mental Habits That Make the Rich Richer

Ashley Eneriz — Thu, 29 Dec 2016 10:30:37 +0000

The mind is a powerful thing that should not be underestimated.

Many successful people believe that if you can change your thought patterns, you can also change your bank account size. Here are five mental tricks that rich people use to make even more money. Try adopting these thought patterns to see if they work at boosting your income.

1. They Think of Money as a Game

Rich people tend to think of money as a game, calculating where to spend and where to invest. Successful people love to win, which is why they are continually trying to do better, do more, learn more, and grow. The average earner gets in trouble when they become stagnant in their career and finances. If you drag yourself to work each day for just a paycheck to survive, then don't expect much more than that. (See also: How to Retire Rich)

2. They Set Big Goals

Rich people are not afraid of setting big, somewhat unrealistic goals because they know they can conquer them. Why are we afraid of setting big goals for ourselves? Is it because we don't believe they can happen? Is it because we know we will hit our financial expectation if we set it low enough?

Set big, scary goals for all areas of your life and look at them as a challenge. What if you don't meet those goals? There is always going to be a possibility of setting a huge goal that you never meet, but what if you try and get halfway there? When you set the bar high, you force yourself to grow as a person.

For example, you can set two different financial goals this next year. One goal is to save $1,000, and the other to save $20,000. There's a big difference in the two goals, and for some, the latter seems impossible. However, if you set the $20,000 savings goal and then tried your best to achieve it, you are going to surprise yourself. You might not hit the $20,000 mark, but you might hit the $10,000 or even $15,000 mark, which are all so much greater than the low-expectations goal of saving $1,000. Don't be afraid to set big goals for yourself. Shoot for the stars, not the dirt.

3. Fear Is Not an Option

One of the biggest emotions that keeps people from achieving great things is fear. Rich people block out fear and take smart risks. Do they fail? Yes! Every rich and successful person has a list of failures to their name, along with even more accomplishments and achievements. When you are trying to battle your fear, ask yourself, "What is the worst that can happen?" Many times, the worst isn't that bad at all.

4. They Deserve to Be Rich

The rich think that they deserve to be rich. They view themselves as worthy of having money. On the flip side, those stuck in middle class don't feel worthy to be rich. They don't view themselves as anyone important or of value.(See also: 5 "When You're Rich" Dream Buys That Aren't That Great)

This isn't just some lofty thought to have. Think of your current job position. Can you be replaced easily in your company? If you answered yes, then figure out how you can become a valuable asset to your boss. If your company doesn't want to lose you, they will pay more to keep you. This can apply to almost any position, so don't think you need to go back to school to get a better degree to make this true for you.

5. Money Is Their Friend

Wealthy individuals realize the power that money has, knowing that it can solve problems and make their lives better. Those who earn less view money as the enemy. They work so that they can pay bills, they pay bills so that they can live, and so on. The cycle never ends, and they are miserable.

Obviously, money is not the answer to happiness, but those who are smart with their money can leverage their paychecks to make their lives better.

These mental tricks aren't magic. Instead, they help rewire your brain to value yourself and your work — which in turn means you will earn more and spend your money better.

This article is from Ashley Eneriz of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

5 "When You're Rich" Dream Buys That Aren't That Great

Paul Michael — Wed, 19 Oct 2016 10:00:09 +0000

We all do it. We dream of the days when our money worries are over, and there's more cash in our bank account than gold in Fort Knox. And most of us know just what we're buying when those glory days happen.

But while some of those purchases seem incredible in the movies and glossy magazines, there's a lot more to them than meets the eye. Scratch the surface, and you'll see that there are better ways to spend your dough than these luxurious buys.

1. The Latest High-End Sports Car

Many of us dream of pulling up to our high school reunion in a car that would make a Rolls-Royce look like a hunk of junk. For instance, the most expensive sports car in the world is the Koenigsegg CCXR Trevita. It has an exterior that is finished with diamond dust, a 4.8-liter dual-supercharged V8 engine, and over 1,000 horsepower. It has a top speed of 245 mph, and goes from 0-60 in under three seconds. But, it's $4.8 million! And how often are you ever going to get this beast even close to top speed? (Chances are, you'll never get it out of first gear.)

Then let's factor in insurance, gas mileage, and the fact that you would be terrified to park it anywhere for fear of denting the exterior, or getting it stolen by professional car thieves who target these high-end cars. When people hit the jackpot and get a car like this, it usually ends up parked in a garage collecting dust, and driven around the block a few times a year. Save your money. (See also: Some Rich People Spend $350K to Park Their Cars)

2. A Yacht

A yacht is perhaps the ultimate status symbol of the rich. "I have a yacht… come take a ride with me." Well if you love the sea, and like entertaining while you're on top of the ocean waves, there are a few things to consider.

Owning a yacht is expensive. Like, really expensive. Most experts agree that you should expect to pay 10% of the yacht's purchase price every year to keep it running. So, if it's $10 million, expect to spend $1 million a year to keep it afloat. Your yacht needs fuel, insurance, dockage fees, maintenance and repairs, and of course, a crew. If you want to go and park your yacht at a prime event, like the Monaco Grand Prix, you can pay $100,000 for mooring costs during your five-day stay.

Most people who hit it rich and buy a yacht soon find the crippling operating costs too much to take, and end up selling the yacht at a loss a year or two later. If you want to do the whole, "I'm on a boat" thing, charter one when you're in the mood. It's way less expensive, and just as much fun.

3. Handfuls of Bling

Nothing says, "I'm rich" quite like showering yourself with all kinds of gold and jewelry. Necklaces, earrings, rings, and watches, all encrusted with more gems and precious metals than Jack Sparrow's treasure chest. Right now, the richest of the rich spend millions on watches and jewelry every year, with a Patek Philippe Ref 5016P coming in at $762,000! But as Ariel Adams writes on Forbes.com, these high-end watches come with lashings of irony. The biggest being they're not as accurate as your average cheap electronic quartz watch you can buy in any department store.

As for diamond jewelry, and in particular, diamond rings, it depreciates in value if you purchase it new (and when you're rich… you do). It's not a good investment. Some of this bling is so expensive, it's wiser to keep it in a safe at home than to ever take it out in public. It will also need to be insured. Solid gold can always be melted down and sold at market value, but all in all, you're better off buying bling with simulated diamonds, and keeping the watch purchase to under $1,000.

4. Your Own Private Jet

Flying for most of us is a real hassle. The long security lines, being crunched into a tiny seat, the delays and cancellations, lost luggage, and all those other annoyances add up to a real pain. Even when everything goes smoothly, it's still not a pleasant experience. So, a private jet would solve all that right? No security. No lost luggage. It's great!

Well, apart from the massive expense. Unless you are putting in some serious hours in the sky, it's a money sink. And even then, flying first class is cheaper. The cost of jet fuel alone makes a trip from LA to New York around $20,000, and that's not taking into account insurance, maintenance, hangar costs, and of course, the pilot's salary. Plus, you can be grounded often (it's known as AOG, or Aircraft On Ground) and will then have to take a charter or commercial flight while still paying the costs of private jet ownership.

You will have to abide by your pilot's schedule as well. A machine may be ready to go at any hour of the day or night, but people need time off. There's also the issue of maintenance. The less you use the jet, the bigger the chance that something will fail. And let's not forget the millions of dollars you pay up front to actually buy the jet. All in all, it's a quick way to throw a lot of your money down the toilet. Get yourself a TSA PreCheck, fly first class, and you'll save a ton of cash.

5. A Mansion

Imagine it. You pull up to the iron gates of your 15-bedroom home, are greeted by servants, and after walking around the beautiful grounds, you sit down to a meal prepared by your personal chef. It's great, but it's expensive.

Aside from shelling out the millions of dollars needed to buy the property, you will need a staff of trained professionals to take care of it. Back in 2006, Forbes interviewed a professional in the business, and she estimated that salaries alone would be $800,000 a year. That's easily over $1 million now. Then you have the other expenses, including huge utility bills, six-figure property taxes, and supplies for gardening, cleaning, and maintenance. And for what? A home so big you'll barely see most of the rooms in it anyway. These mega-mansions have bankrupted many rich people in the past, and unless you are setup to make a lot of money, they will quickly eat away at your pot of gold.

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This article is from Paul Michael of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

3 Smart Ways Young Millionaires Manage Their Money

Shannah Game — Fri, 09 Sep 2016 10:30:15 +0000

If you're lucky enough to wake up tomorrow as a young millionaire, it's time to learn a few tips to keep your wealth working for you. Here are three ways that financially-savvy millionaires under 40 manage their money wisely:

They Use Buckets

Good financial planners will tell you that it's not so much about the amount of money you have, but about how you spread that money out. It's a concept called diversification, and it doesn't just apply to your 401K mutual funds.

Millionaires under 40 understand can't rely on just one approach to save and grow their money. Instead, many young millionaires build an investment portfolio with the traditional securities, such as stocks and bonds, but also add in less-traditional investments like real estate, and other alternative investments.

Real estate is an excellent example of how young millionaires use buckets. They might hold a REIT (Real Estate Investment Trust) in their investment portfolio, and also have rental income streams that aren't tied to their job. Rental income provides an extra source of income that can be used for many smart purchases to grow even more wealth, like investing in a business or starting a small business to diversify further.

The best part of utilizing buckets is you're spreading your risk to avoid an all-out Bernie Madoff situation with your money. What young millionaires know is that if one bucket isn't performing, they can either reduce the exposure in that bucket or look to another bucket for growth or cash flow.

They Have a Cause

Millennials love a good cause. They're passionate and want to know that their money and time are going toward helping the greater good. Whether it's building an orphanage in Africa, rebuilding a community after a natural disaster, or marching in Washington to champion a cause, young millionaires believe in benefiting society.

There are many different options for socially responsible investing that young millionaires are incorporating into their financial plan. Most investment platforms now offer a selection of funds that either exclude certain companies, like oil and gas, or are inclusive of companies that focus on environmental or socially responsible products. Whatever your cause of choice is, there is a socially responsible investment to meet your needs.

They Are Curious

Most millionaires under 40 understand the importance of a financial adviser. When you get to the millionaire status, you probably also have a good lawyer and CPA on your "team." However, millionaires under 40 stay curious. They don't just rely on the advice of one person. They search for answers to money questions and read articles to find any other gems that might help them grow their net worth. They talk to friends and family about wealth as well.

It's a constant cycle that proves to be very successful with millionaires under 40. They understand that you need to spread your money around in different buckets to limit risk and maximize your growth potential. They become passionate about causes and want their money to make a difference in the world. At the end of the day, they stay restless and curious about finding more answers, asking more questions, and being ready to jump at opportunities.

Do you adhere to any of these — or other — precepts for managing your money?

This article is from Shannah Game of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

10 of the World's Most Expensive Restaurants

Paul Michael — Mon, 08 Feb 2016 16:00:05 +0000

When it comes to restaurants, most of us make a decision based on several factors: quality and style of the food, the location, and of course, the menu prices. But what if one of those factors was never an issue? What if money was no object, and you could eat absolutely anywhere, regardless of cost?

Here are 10 of the most expensive restaurants in the world. When you consider the price for a meal can be more than a mortgage payment (or two), that's a whole lot of dough for a few hours of bread and wine. (See also: Cheap Ways to Get These 8 Expensive Indulgences)

1. SubliMotion, Spain — $2,173 Per Person

Topping the list is SubliMotion, a restaurant located inside the Hard Rock Hotel in Ibiza. At over two grand per person, for just a few hours of dining, you know this is an experience only the very wealthy can afford. If you somehow want to blow your savings on the experience, you can expect a 15–20 course meal, based in the art of molecular gastronomy. Not only that, but this sensory experience marries the meal with music, visual stimulation, art, and hi-tech headsets. The reviews are stunning, but of course, for that kind of money, they should be.

2. Aragawa, Japan — From $370 Per Person

If you like the finest steak, Aragawa could be one to put on your bucket list — if, of course, you happen to be in the Shinbashi district of Tokyo. You would think the price alone would make it relatively easy to get a table, but think again. It can take months, or longer, to get a reservation. The reason is the Wagyu beef (more commonly known in the U.S. as Kobe), which comes from just one local farm. The process to raise the Tajima cattle is long and painstaking, resulting in the high prices. But one thing is for certain — no one who has ever tried it has said it wasn't worth the price.

3. Maison Pic, France — $442 Per Person

Following in the footsteps of her famous chef father and grandfather, Anne-Sophie Pic is continuing the tradition of high-quality, multi-course dining in the heart of Drôme, France. As you can expect from a three-star Michelin restaurant, the menu is mouth-watering. From squab and candied turnips, to Banon goat cheese Berlingots, and melt-in-your-mouth chocolate desserts, it's an experience you'll never forget. And neither will your bank balance.

4. Restaurant Gordon Ramsay, London — $178 Per Person

Compared to the first restaurant on the list, a meal at Restaurant Gordon Ramsay seems like a bargain. But of course, when you factor in wine, tip, and other additions, you're still looking at around $500 for a meal for two. One of the many restaurants of the infamous chef Gordon Ramsay, this is his signature location. Your three course meal will consist of modern French cuisine, including pan-fried sea scallops, sautéed foie gras with roasted veal, and Cotswold lamb. Oh, and don't worry about Ramsay's temper. With so many restaurants around the world, and all of his TV shows, it's doubtful you'd ever see him make an appearance.

5. Masa, New York City — $600 Per Person

Masa is not just expensive; it's often considered overpriced, and simply a chic hangout for Hollywood A-Listers and fat cat businessmen. It's a Japanese sushi restaurant opened by renowned chef Masa Takayama in 2004. Expect to pay $45 for a single scoop of ice cream, $240 for maki rolls, and $60 for grilled scampi. What's the draw? The food is good, but really, it's the company. People come here to rub shoulders with the elite, and to prove a point. This is the restaurant for the 1% of the 1%, and while it may be a luxury you and I can afford once, this is a regular hangout for the rich and famous.

6. Ithaa Undersea Restaurant, Maldives — $320 Per Person

For a dining experience that is a feast for the eyes, as well as the palette, you could try Ithaa in the Maldives. Sitting 10 feet below the surface of the Indian Ocean, surrounded by sea life and coral, this small venue accommodates just 14 guests for lunch, dinner, or cocktails. Expect mascarpone and truffle dumplings, lobster Carpaccio, and agnolotti of duck. Considered one of the most beautiful restaurants in the world, you won't have an easy time getting a reservation. But when you finally do, it is considered an experience unlike any other.

7. Alain Ducasse at the Dorchester, London — $343 Per Person

Back to London again, and more modern French cuisine. But this is double the price of a meal at Ramsay's eatery. Located in London's famous Dorchester hotel, Alain Ducasse is a three Michelin star restaurant serving exquisite food to diners with deep pockets. The Black Truffle Menu is a seven-course meal costing $343 a head, but if you want to "slum it" you could try the A La Carte menu. For $136 each, you get a starter, main course, and dessert (service charge not included).

8. Restaurant Crissier, Switzerland — $375 Per Person

The fine dining establishment of the late chef Benôit Violier and his wife Brigitte, Crissier is highly rated by all who eat there. Located in a gorgeous setting, and staffed by a team that makes everyone feel like royalty, Crissier offers a wide array of dishes to suit many palates. Roast saddle of suckling lamb, purple sea urchin, duck foie gras, and wild turbot are all in the $375 menu. If you're in a hurry, you can get a quick lunch for just under $200 per person.

9. Misoguigawa, Kyoto — $168 Per Person

The least expensive restaurant on the list, but still incredibly expensive by the average American's standards, Misoguigawa blends two styles of cuisine — French and Japanese Kaiseki. The result is a truly original and exhilarating experience for lovers of either cuisine, and the rave reviews across multiple food blogging sites back that up. If you're feeling extravagant, you can try the more expensive $270 per person menu; but you must call and reserve this at least five days in advance. On the menu, beef filet with potato soufflés, buttered French beans, and roasted pumpkin.

10. Plaza Athénéé, Paris — $550 Per Person

Another restaurant of esteemed chef Alain Ducasse, Plaza Athénéé is located in the city of romance; but you are not going to love the price. Seated below chandeliers comprised of 10,000 glimmering crystals, the dining room itself is a work of art. The menu consists of rare ingredients, and a plate of steamed langoustines with caviar costs over $260 alone. One of the most expensive restaurants on the list, but as it's set in one of the most beautiful cities in the world, it's also one of the most desirable.

What's the most you've ever paid for nice dinner out?

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This article is from Paul Michael of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

The 5 Cities the Most Billionaires Call Home

Brittany Lyte — Thu, 24 Dec 2015 12:00:03 +0000

Lured by favorable tax laws and fantastic views, the richest of the rich choose their backyards with precision. Read on for our roundup of some of the most popular locales for the luxe — and why so many of the globe's elite choose to call them home. (See also: 8 Jaw-Dropping Tax Havens of the Filthy Rich)

1. Moscow

More than 80% of Russia's 68 billionaires reside in the sprawling country's capital, making Moscow a mecca of wealth. The city center is dominated by gold-domed architecture, pricey eateries, and luxe hotels. Home of the Kremlin and some of the world's most exquisite ballet, Moscow offers impressive city parks, unique urban promenades, and a nightlife scene that rivals that of New York. Moscow is also full of culinary treats. Consider your visit incomplete until you've sampled the perogies and borscht.

2. Zurich

The average price of a pair of blue jeans in this Swiss banking hub is a staggering $156. Need we say more? Millionaires account for an astounding 27% of the population, pushing the price of everyday items like jeans nearly out of reach for everyone else. The city itself is concentrated on a fairly small footprint surrounded by mountains, rolling hills, and other feats of nature. It's entirely possible to spend the morning exploring city streets and art galleries, and then enjoy an afternoon hike alongside a serene lake or river.

3. Monaco

This city-state on the sea is the most likely place you'll bump into a millionaire. And with its posh casinos, glamorous hotels, and yacht-lined harbors, it's really no surprise. Monaco is a major center of banking as well as tourism, but it is most widely associated with being the ultimate playground for the rich and famous. With nearly 38,000 residents stuffed into soaring high rises and regal estates along a small area of the French Riviera, it is the world's second smallest and most densely populated country — and one of its most legendary tax havens. Monaco does not charge its elite residents income taxes.

4. New York

One in every 22 New Yorkers is a millionaire. And with 78 billionaires, the Big Apple has more uber-rich residents than any other city in the world. Home of the Statue of Liberty, Wall Street, and the best pizza on the planet, New York is chock full of iconic people and places just waiting to be explored. New York is also the global center of industries ranging from fashion to finance. Luckily, there are lots of frugal ways to enjoy the City That Never Sleeps.

5. Stamford

This waterfront enclave in yankee Connecticut is called "the city that works." Clearly, you've got to work pretty hard to afford living here. Stamford has one of the highest concentrations of millionaire households in the nation, with housing costs at more than double the national average. But with its easy access to NYC, views of Long Island Sound, and a bustling downtown, Stamford is one of Connecticut's jewels. This city of 126,000 people boasts a lively bar scene, small theaters, and several live recording studios where episodes of legendary television shows are filmed. Brimming with hedge fund types, Stamford is also home of the largest trading floor in the world.

Have you visited any of these hangouts of the mega-wealthy?

This article is from Brittany Lyte of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

4 Ways HSBC's Shady Schemes Helped the Rich Avoid Taxes

Brittany Lyte — Fri, 20 Feb 2015 18:00:08 +0000

Fugitive diamond dealers, convicted drug lords, terror suspects, royal families, famous athletes, and allies of Vladimir Putin are among the controversial figures HSBC helped hide money from the taxman by setting up and managing 1,000s of secret Swiss bank accounts. The bank now faces criminal prosecution for its role in not only allowing, but advocating that select wealthy clients hide their identities (and in some cases huge amounts of illicit cash) in order to skirt taxation. It's the latest in a string of shady Swiss banking busts, and one that could result in a hard crackdown on offshore tax havens.

Read on for our step-by-step guide to how the world's second-largest bank got away with helping people avoid paying their taxes — and why you can't do the same.

1. Aggressive Marketing

To drum up business, HSBC promoted its tax dodging strategization services. For example, the bank alerted select wealthy clients about a scheme it masterminded for the purpose of helping depositors avoid a new tax levied in 2005 on the Swiss savings accounts of EU citizens. Since the tax applied only to personal savings accounts, HSBC offered to transfer clients' monies into a puppet corporate account it created so that those monies wouldn't be subject to the tax. The likelihood of your bank setting up an ingenuine account to help you avoid paying your taxes is slim to none.

2. A 1934 Swiss Law

Most western nations outlawed anonymous banking long ago. But the practice is alive and well in Switzerland, where banking secrecy is supported by a 1934 law that makes it punishable by three years in jail for a banker, current or former, to make public the identity of a depositor. Instead of legal names, HSBC's secret accounts were tied only to numbers and code names like Captain Kirk. Just a select few within the banking giant's Swiss branch knew the true identity of its depositors.

3. Untraceable Banknotes

When you use untraceable banknotes, there's no paper trail to set off the IRS or other authorities. With this knowledge, HSBC reportedly made untraceable cash available to its depositors, and then allowed those depositors to make large cash withdrawals — a major red flag in legal banking operations that would normally result in a denial of the request to make a withdrawal. Some of these withdrawals were in amounts as large as $100,000.

If you tried to make a cash withdrawal in the amount of $100,000 — or even $10,000 — your bank would almost certainly block the transaction. But HSBC never did. In fact, the bank encouraged such transactions. In one example, the Guardian reports that wealthy HSBC clients in Paris would use the bank to exchange the illicit proceeds from big drug deals in the city for untraceable cash.

4. Tip-Offs

Chances are that your bank would advise you on how to comply with the law — not on how to skirt it. But HSBC clearly wasn't playing the role of typical bank. In fact, it tipped off its clients when they were on the verge of making a transaction that might catch the attention of the taxman. In many cases, it would then suggest an alternative way to make that same transaction while staying under the radar. A surgeon from the U.S., for example, said HSBC's Swiss bank gave him "bricks" of $100,000 in notes so he could secretly send them home in a series of envelopes. Wiring the money, the bank advised him, would "create a trail for U.S. authorities," the Guardian reports.

The super-rich get all sorts of benefits you and I don't. HSBC's tax-dodging strategies are just the latest example.

This article is from Brittany Lyte of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

Best Money Tips: Ways to Get Rich Quicker

Ashley Jacobs — Mon, 29 Apr 2013 10:00:33 +0000

Welcome to Wise Bread's Best Money Tips Roundup! Today we found some awesome articles on ways to get rich quicker, how to start saving for your summer vacation, and cutting wedding cake costs.

What Does Being Rich Mean to You Anyway?

David Ning — Thu, 02 Sep 2010 14:00:07 +0000

Money Magazine had an interesting article in the September 2010 issue titled "Do You Have What It Takes To Be Wealthy?" The article comprised of 15 questions aimed to tell you if, indeed, you have a good chance to be rich. I aced it (if you consider having a solid chance of being rich a good thing, that is), but what is the definition of being wealthy anyway? Is it just a number we call net worth? Or is it something else all together?

I was given a tour the other day of a $6 million dollar home. Apparently, the owner bought the piece of land for $4 million and spent $10 million building the custom house on the site. The property was gorgeous (duh!), but the owner couldn't have lived in it for more than three years and he lost $10 million in the process after considering not getting his asking price, agent fees, etc. when it's all said and done.

When you have that kind of money to lose, are you considered rich? (By the way, for those concerned, the owner moved to an even more expensive neighborhood, so this is not one of those overextended home borrower stories.) Miranda started an interesting discussion asking whether you are rich. She claims that your location and personal situation matters a great deal when it comes to the financial portion of the definition of being rich, but I believe it's more than that. I'd argue that being wealthy is much more than having, or earning a specific dollar amount.

Not Worrying About Money

This is much more than having a ton of money. Not worrying about money is more about the ratio of your spending and expectations versus your assets. Some people don't have enough with $12 million, but others can retire comfortably with much, much less. However much money you have, you cannot be wealthy when the worry of money is always on the forefront of your mind.

Having Loving Family and Friends

You might have money, but you aren't rich if you don't have anyone to spend it with. Being rich is also having someone to share your joy and sorrows, and it's having someone to have spend time with too. When you need a shoulder to cry on, can you actually buy one?

Having a Sense of Direction

You can have all the money in the world, but it's very difficult to enjoy life if you don't have a sense of purpose. We talk about finding a passion all the time, but to be quite honest with you, most people never listen. Some are simply too afraid to change their depressing jobs, they are too lazy to repair broken relationships, and they are too proud to admit their mistakes so they can start over. First of all, I don't think these people will be able to maximize their earnings power this way. Even if they could, how does having a bunch of money with a miserable life make them wealthy?

Being rich requires money. There is no doubt about it. But it's much more than that — so much more.

This article is from David Ning of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

Tactics of the rich

Philip Brewer — Sun, 12 Apr 2009 21:18:49 +0000

There are things the rich do that working class and middle class folks don't. Some of them--living off the return on capital rather than wages or salary--are only available to the rich. Others--seeking a first-rate education for your kids, working for yourself rather than others--are things that ordinary folks do to the extent that they can, but their ability is limited. Even so, it's worth learning the tactics of the rich and applying them where possible.

Some of the tactics of the wealthy are unsavory. One key tactic is to share as little as possible of the profits of the enterprise. This is why working for yourself is such an important tactic--the owners and managers are in a position to grab the lion's share. Put your suppliers in the position of competing with one another for the lowest price, put your workers in the position of competing with the unemployed for the lowest wage, and pocket the savings (via dividends if you're an owner, via bonuses if you're a manager).

Others, though--tactics like frugality, living within your means, avoiding debt (except to invest in a money-earning enterprise), and working hard--are positive virtues, or at least neutral. (And they're generally the ones that lead to wealth creation. The others are largely about wealth preservation.)

These tactics are not kept secret, exactly, but various factors keep them largely out of view from ordinary folks. The biggest is simply that consumption is interesting while frugality is dull. So, buying a yacht makes the news, whereas driving a 10-year-old car one more year doesn't get noticed. The result is that popular culture shows the excesses of super-wealthy but not the ordinary lifestyles of the ordinary wealthy. But there are way more of the latter than there are of the former.

Not a level playing field

There are a lot of ways in which the deck is stacked in favor of the rich. The advantage I mentioned at the beginning--owners and managers being able to skim off an outsized share of the profits--is a huge one, but there are others:

The legal system heavily favors the rich.
The financial system offers high quality services to the wealthy (often for free), while the poor make do with expensive check-cashing services and payday lenders.
The rich are in a much better position to wait for a good deal--which gets them lower interest rates on loans, lower rents, lower insurance rates, and better prices on just about everything.
And then there are simple social realities--affluent neighborhoods are safer, stores that cater to the affluent have more and better choices (and often cheaper ones as well), schools in affluent neighborhoods are better and safer.

Knowledge can help level it

If you know enough, though, most of these advantages of the wealthy are available to the poor as well:

Anybody can start a small business. The internet has vastly increased the range of options that require almost no capital (and has made a wide range of formerly expensive services available cheap or free). This mean that anybody can work for themselves rather than others.
Anybody can be frugal and live within their means, as long as they don't assume that they're entitled to some particular standard of living.
Anybody can avoid debt. More important, anybody can understand the difference between productive debt (invested to earn the money to pay itself off) and unproductive debt (spent on consumption).
Anybody can do the research to find the good public schools. The affluent have a lot more choices, but you only need to find one affordable place to live in a safe neighborhood with good schools.
Anyone (even people with garnishments) can open a bank account and quit using the check-chasing places.
Anyone can be patient and refuse to take a bad deal--which will, over time, get you the same good prices that the rich get.

It takes time and effort to learn the tricks and pitfalls, and this is where the children of the affluent get their biggest leg up: They learn these things from their parents and their friends' parents, from their classmates and teachers and neighbors. They also generally reach adulthood with at least a little capital (instead of student loan debts). But you can learn these things too. It's one reason for reading Wise Bread.

This article is from Philip Brewer of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

rich

Best Money Tips: Tax Secrets of the Rich

Top 5 Articles

Other Essential Reading

How to Profit From China's Growing Upper Class — Even If You Don't Speak Chinese

Teach English online

Be a butler

Rent your vacation property to Chinese tourists

Teach skiing

Host a high school student

Sell your property to a Chinese investor

Be a private schoolteacher or administrator

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15 Jobs That Capitalize on the Growth in Rich Households

1. Butler/personal assistant

2. Chauffeur

3. Nanny

4. Closet nanny

5. Pet nanny

6. Cosmetic surgeon

7. Landscape architect

8. Estate manager

9. Housekeeper

10. Wealth planner

11. Personal/private chef

12. Personal trainer

13. Private jet interior decorator

14. Yacht crew

15. In-house tech support

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10 Small Towns With the Most Millionaires Per Capita

1. Los Alamos, New Mexico

2. Summit Park, Utah

3. Juneau, Alaska

4. Williston, North Dakota

5. Torrington, Connecticut

6. Edwards, Colorado

7. Gillette, Wyoming

8. Vineyard Haven, Massachusetts

9. Oak Harbor, Washington

10. Jackson, Wyoming/Idaho

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Cash Might Make You Happier, But Investments Will Make You Richer

You're losing money

What's the big risk?

Save yourself from hasty decisions

But I still want to feel happy

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5 Reasons Being a Millionaire Is Overrated

1. Happiness can be bought — but most rich people aren't doing it right

2. Small delights bring more joy than big, expensive ones

3. Anticipation promotes happiness

4. A fancy vacation might sound like bliss, but it can often bring problems

5. Rich people tend to spend more time working

5 Mental Habits That Make the Rich Richer

1. They Think of Money as a Game

2. They Set Big Goals

3. Fear Is Not an Option

4. They Deserve to Be Rich

5. Money Is Their Friend

5 "When You're Rich" Dream Buys That Aren't That Great

1. The Latest High-End Sports Car

2. A Yacht

3. Handfuls of Bling

4. Your Own Private Jet

5. A Mansion

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3 Smart Ways Young Millionaires Manage Their Money

They Use Buckets

They Have a Cause

They Are Curious

10 of the World's Most Expensive Restaurants

1. SubliMotion, Spain — $2,173 Per Person

2. Aragawa, Japan — From $370 Per Person

3. Maison Pic, France — $442 Per Person

4. Restaurant Gordon Ramsay, London — $178 Per Person

5. Masa, New York City — $600 Per Person

6. Ithaa Undersea Restaurant, Maldives — $320 Per Person

7. Alain Ducasse at the Dorchester, London — $343 Per Person

8. Restaurant Crissier, Switzerland — $375 Per Person