Everyone looks for advice from the rich. But advice is not universally applicable and sometimes rich people don’t do what they advise.
Here are 15 things rich people advise but never do.
Don’t worry if you don’t feel like reading, you can enjoy the video below or watch it on YouTube:
1
Advice #1 – Go to school
Going to school, with all its downsides, is still good advice for most people.
It shows you how to move forward when you don’t know what else to do.
It won’t put you ahead of anyone and it won’t ready you for the real world, but at least you’re not falling behind very quickly.
Most people should follow that advice. But most people are not rich.
As we’ve already said, the only time you shouldn’t go to college or any other type of school is if you have something better to do.
And rich people always have better things to do.
They know that the school system is old and that there isn’t much to gain from it besides some ties and open doors.
When it comes to teaching their kids, rich people don’t do what they advise others to.
There are actually three kinds of schools. There are public schools, private schools, and schools that only really rich people can send their kids to.
If they can’t find one, they build one themselves and hire teachers from all over the world who are the best in their fields.
2
Advice #2 – Reduce spending
Rich people’s first piece of advice to people who are having trouble with money is to spend less.
But here’s something that most people don’t fully get:
You can’t save up enough money to get to a million dollars.
When poor people look for ways to save money, rich people look for ways to make more money. Rich people don’t follow their advice here.
You can’t really tell someone to “just make more money” if they don’t know how money works. It will only confuse and irritate them.
And you can’t really cut spending below “0,” as you can see.
You have a hard limit on how much money you can spend.
This advice doesn’t help if you have nothing left. Rich people never spend less than what they think is necessary.
And if they need more cash on hand, they look for ways to make more.
You can make as much money as you want, but there’s a limit to how little you can spend.
3
Advice #3 – Get out of debt
People in general are generally bad with money and debt.
In fact, 77% of Americans have some kind of debt that won’t go away soon. People have always used the “buy now, pay later” plan.
If money is tight for you, getting out of debt should be a top concern. Which is what rich people advise you to do but they never follow.
You see, rich people never do anything with their own money. Why use your own money when you can use the money of other people? This is called debt.
That’s how the rich get more and more wealthy.
Debt is a very powerful way to manage your money. It can make you very rich or very poor.
But if you don’t know what you’re doing, you should probably stay away.
4
Advice #4 – Diversify
This is something that most people don’t understand.
When someone puts a few million dollars into a new kind of business, they are not diversifying; they are just testing the waves.
Because those millions are only a small part of the money that can be spent on investments.
If you look at Warren Buffet, he only owns a few stocks and has done so for decades.
When rich people say “diversify,” they mean to buy an index fund, not a bunch of different stocks.
Or buy the whole apartment building instead of just one room.
They don’t talk too much about things they don’t understand well or aren’t interested in.
About 80% of their money is in investments that are safe and sure, and they are very careful with it. The other 20% is money for “playing around.”
Something to keep them moving and busy. This also lets them take bigger risks than a normal person without having to worry about major consequences.
5
Advice #5 – Always stay informed
In the age of information, it’s important to stay informed if you want to make good choices.
But the rich get too much knowledge and advice from too many different places.
They know how important it is to stay informed. But they also know how important it is to sort and prioritize material well.
It’s called choosing not to know something. It takes a lot of mental energy to always take in new knowledge.
They hire people to make their reports because of this.
They don’t need to know every little detail, only what’s valuable to them.
And that’s exactly how we built the Alux App.
It’s specifically designed with the Aluxer in mind, and we spent a lot of time and resources to bring it to life.
Think of it like a mentor in your pocket, giving you hand-picked nuggets of gold, exactly when you need them.
Go to alux.com and start your free trial today!
6
Advice #6 – Stick to the budget
Rich people advise you to stick to your budget. And for most people, it’s a good idea to stick to the limit.
You don’t want to spend more than you can afford, and you don’t want to have to borrow money to pay for things you need.
Spending money well and all that.
Rich people, on the other hand, do their math in a different way.
The normal person makes a budget and then works backward to try to fit as many things as possible into that budget.
This is also why they would rather have a lot of average things than a few good ones.
But the rich start with what they want to happen.
They look at what needs to be done and what the standards are.
They combine things that make sense from a financial point of view, and the budget comes last.
For example, what is your marketing budget if you spend $1 on ads and get $1.10 back? “Unlimited” is the right answer.
7
Advice #7 – Get a passive income
Now is the part of the video where we pop some bubbles.
Passive income is one of the slowest ways to build wealth.
You see, passive income makes you a lot of money when you already make a lot of money.
Let’s pretend for a moment that you are a famous writer.
Every month, you sell tens of thousands of copies of your books, and for each one, you get a fee. Passive income, right?
Well, you see, when your book sells tens of thousands of copies every month, your speaking events bring in at least the same amount of money in about 30 minutes.
When you have a lot to work with, it’s easy to make passive cash.
And for most normal people, getting money without doing anything seems like the dream.
It’s one of the things people look for the most on the internet. But passive income won’t make you rich.
Having stock makes you wealthy. Having a stake in companies that grow over time.
Rich people never look for ways to make money without doing anything. But they are always looking for ways to get more stock.
8
Don’t be afraid to take risks
A lot of people think that taking chances is an important part of being successful.
And it is in some ways. There is a catch, though. Here’s what rich people advise you:
Rich people know that not all risks are the same, and the last thing they want to do is put everything on the line. Contrary to what most people think, rich people play the game very safely.
They don’t make rash or unnecessary choices that could hurt their wealth.
And when they do take chances, they do so with a big cushion in front of them.
Remember the 80% you put away safely and the 20% you used for fun?
With that 20%, they have enough money to take on more risks. But the other 80 will never be touched by anything.
Now, if you want to know more about how the rich take risks, you can watch a great movie about it in the top right corner.
9
Step out of your comfort zone
You kept hearing it over and over.
Get out of your safe zone if you want to grow and make more money. That’s true if your couch is your safety zone.
But the rich tend to stay right where they are.
They know that focusing on their skills and getting good at what they do will bring them more success and chances.
When people step out of their comfort zones, it can sometimes cause them to lose focus or dilute their knowledge.
You see, “predictable outcomes” are the magic words for the rich. And they do everything they can to make sure the math works out in their favor.
The truth is that there’s no reason to make it harder for you to make it.
10
Save for retirement
Saving for retirement seems like sound advice, especially since it’s highly unlikely your government will take care of you when you are old.
And thinking about retirement gives you a sense of long-term financial security and stability. But it’s a false sense.
You see, for the average individual, retirement is an age. For rich people, retirement is a dollar amount.
It has nothing to do with age.
And for sure it has nothing to do with saving because as we said earlier, you are not saving your way to a million dollars, let alone enough money to last until you are gone.
11
Invest in real estate
People used to call real estate an “idiot-proof” business because it’s hard to make a mistake with it.
But here’s what’s true: Millionaires invest in real estate, and billionaires invest in businesses.
After the land is paid off, it usually takes decades before you make any money from it.
That is, if the home market, interest rates, and all the other fun things don’t do anything crazy.
There are no doubts that real estate can make you a millionaire. But you can only go so far with that.
There’s a reason why most of a billionaire’s money is in private equity and not in real estate.
12
Network extensively
Networking is considered essential for professional growth and success, and it’s often emphasized as a valuable skill to develop.
However, the rich, being in a different league altogether, focus more on strategic connections and high-level relationships.
In other words, the average individual wants to know a lot of people. The rich want to know just a handful of people, who know a lot of people.
They understand the power of a select network of influential individuals who can provide unique opportunities and access to exclusive deals.
Why need to know someone for every door, when you can know someone with the keys to the entire building?
Quantity is not as important as quality when it comes to networking for the wealthy.
13
Follow your passion
It’s true that work doesn’t feel like work when you genuinely enjoy what you are doing.
But the thing is, passion is rarely financially viable unless your passion is to make money.
Which is kind of a weird passion to have, to be honest.
And you see, even if you get lucky and manage to transform your passion into a business, you’ll quickly find that bills are paid through invoices, not mood walls.
The majority of people who start a business out of passion, they either find a way to distance themselves from an executive position, or sell the business altogether.
It may happen in 5 years, or 10, or 15, but it will happen.
14
Embrace failure
We recently posted a video about failure and why it should be avoided at all costs.
You see, people don’t actually learn from their failures. If anything, failure is a major drawback and a waste of time and resources.
You can find a silver lining in failure, sure, but the rich do everything in their ability to avoid it or at least minimize it.
Failure is a teachable moment that you didn’t learn beforehand.
15
Work hard
We end the list with the most common advice you’ll ever hear. Work hard.
The most valuable time the rich have is the one outside of the office.
It just so happens that in order to have as much of that time, they need to put in the work, now and then. Hard work is massively overrated.
If you find yourself working really hard, you are either inefficient or underequipped.
The only exception to this rule is crunch time when something big needs to happen quickly and swiftly. Product releases, important deals, that type of stuff.
But other than that, working hard has a lot of diminishing returns.
Nobody actually works 12 hours a day, unless that work is management work which is not as taxing.
The optimal work for the rich is a few activities with a lot of impacts.
Solving big ticket items. That’s the goal.
And now you know why it’s important to look at what the people advising you are doing. Sometimes, rich people don’t really do what they advise others to.
