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I know this general question has probably been asked countless times but I am curious about the common ways that people make money. I know there are niche markets everywhere that just need to be exploited, but after living in a very affluent part of Los Angeles... it just seems like there has to be some sort of secret when every single one of my neighbors is living so lavishly. I don’t know if its because so many of these people are living off credits lines such that they can afford 5-10 million dollar houses, have invested all their money into their homes, or were just lucky enough to buy these homes before the real estate bubble. [For anyone curious, I am talking about Malibu all the way to Hollywood AND Calabasas all the way to Studio City]
What I am trying to say is that there has to be some sort of generalized means to accumulating this wealth. I would like to know if anyone here has the hard facts. I know the characteristics of most wealthy people (Driven, Great Work Ethic, Frugal, Hard Working, and Savings Oriented). What I would like to know is if it as simple as:
-Securities Investments
-Physical Real Estate Investments
-Businesses (Self-Started / Franchises)
-Savings from High Income Professions (Single / Dual Income)
-Inheritance
-Luck
I have been fortunate enough to live with very frugal parents who have saved their way to an 8 digit net worth by just doing low risk real estate investments over a long period of time. I myself have locked myself into a medical residency where I can expect a very good income to live comfortably for the rest of my life and continue to do what I love to do, help people with treatment and promote a healthy lifestyle. My parents want to take the majority of my income to reinvest it into their business model and although I really don’t mind that, I would like to do some of my own investments and that is why I have come here. Sorry for the long and most likely absurd post, but it is something that I have been wondering for a very long time.
One thing that I have learned is that you cannot look at the outward displays of wealth to know if a person is wealthy or not. Many go into debt to keep up appearances.
And in contrast, some of the wealthiest people that I know drive old cars, wear Carhartts, and vacation at the local lake, not the French Riviera.
Starting around 16 years ago, I became very aggressive in investing. Since I cannot own my own business at this time, I felt that I could at least own fractions of great businesses through the purchase of stocks of dividend-paying companies. It has worked so far to increase my net worth.
One thing that I have learned is that you cannot look at the outward displays of wealth to know if a person is wealthy or not. Many go into debt to keep up appearances.
And in contrast, some of the wealthiest people that I know drive old cars, wear Carhartts, and vacation at the local lake, not the French Riviera.
Starting around 16 years ago, I became very aggressive in investing. Since I cannot own my own business at this time, I felt that I could at least own fractions of great businesses through the purchase of stocks of dividend-paying companies. It has worked so far to increase my net worth.
It comes down to keeping what you make and not squandering it away, managing the nest egg wisely so that it grows. Most wealthy people just worked their butts off, managed their money wisely, and had a little luck along the way. Most people that are really wealthy are people that you would not expect to have much money at all.
i disagree with most of the answers here. the things y'all describe may be good advice, but they are not how most people have built wealth.
many people bought real estate prior to a 30-year cyclical decline in interest rates. They have been living off real estate appreciation, and the folks who made the riskiest choices were rewarded through monetary policy. Many of these people you're talking about are not thrifty, or smart, or hard-working; they were just in the right place at the right time.
This is why, as recently as 5 years ago, many people believed that real estate could not fall in value.
i disagree with most of the answers here. the things y'all describe may be good advice, but they are not how most people have built wealth.
many people bought real estate prior to a 30-year cyclical decline in interest rates. They have been living off real estate appreciation, and the folks who made the riskiest choices were rewarded through monetary policy. Many of these people you're talking about are not thrifty, or smart, or hard-working; they were just in the right place at the right time.
This is why, as recently as 5 years ago, many people believed that real estate could not fall in value.
Personal debt is going to come down and way down. How it comes down will have a large impact on how the next 80 years plays out.
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Good point... Real wealth is hard to detect.
