• Well, my little rumination about Mitt Romney’s tax return did teach me a small lesson: politics ain’t beanbags. And, before I make future postings on the topic, this here Worcester tax service provider is going to be cautious!

    I approached the topic purely from a tax standpoint, being extremely careful to make no political statements, aside from observations of facts. I crossed over the line by saying: They donated just under 30% of their income to charity — which is remarkable, no matter what political persuasion you hold to and I also crossed over the line when I said: Romney intentionally overpaid his taxes, obviously to conform to the statements he had previously made about not ever paying less than a 13% tax rate.

    Forgive me if I confused you: I’m a Worcester tax professional first, and am mostly bemused by politics. I will confess to not always appreciating Congress’ lateness (every year) in clearing up pressing tax code questions, but I can understand that if you are someone who cares deeply about politics, one of those statements might have frustrated you. I apologize!

    (And I’m considering whiting-out any further mention of political candidates by name in future emails!)

    But in all seriousness, I do care very deeply about each one of my clients and contacts, and I want you to know that whichever side of the political aisle you frequent, I respect your viewpoint and will work tirelessly to help you reach your financial goals.

    So, in that vein, I thought I’d take some time to share with you some observations I’ve made as I’ve worked with clients who have done extremely well, financially. I’m presuming, here, that you’d like to join those ranks … so here are five things which I’ve observed, that I believe will help you get there…

    Your Worcester Tax Accountant Reveals: The Five Life Practices of the Wealthy
    It sometimes seems as if the wealthy simply appear into the world that way. Yes, some are born into money, but that isn’t the case across the board. Many of my wealthy clients, both here in the Worcester area and beyond, have had to work their way up the scale — and to do so, they’ve had to adopt a different set of habits from most other people.

    We can learn a lot from them, these among our ranks who had to create the wealth they now enjoy. More precisely, it’s the habits that got them to where they are that we need to focus on and learn from.

    So, as I’ve watched clients go from one end of the scale to another, over the years, here are five habits I’ve seen them all carry…

    1. Putting off today what you can have tomorrow
    The wealthy usually carry a willingness to live beneath their means for as long as it takes to reach their financial goals. While their peers are showing a tendency toward embracing the good life at the first sign of prosperity, the would-be wealthy take a pass on all of that.

    While others are saving 6-10% of their annual incomes — usually for retirement — people who want to be wealthy often save 20, 30, 40 or even 50% or more of their incomes.

    Imagine how much money you’d have saved in 10 years if you saved half of your income during that time? The fact that no one ever sees this happen is one of the reasons that people believe that the wealthy some how “come into money.”

    2. Spending well
    The self-made wealthy learn early in life that you never pay full price. The combination of this habit with delayed gratification is a powerful force when it comes to growing wealth. Not only do you spend as little money as possible, but you buy at a discount when you do.

    While most people are buying the most expensive house they can afford, the rich-in-progress buy beneath their means, and buy the cheapest house in the neighborhood to boot. They first ask themselves, “how much house can we truly afford right now?” The same is true of buying cars, if one wants to be rich someday, he buys a conservative car — and buys it used.

    3. Fleeing from consumer debt
    Debt represents a reduction of future cash flow and the wealthy will avoid it. By paying cash on the barrel, there are no strings attached to what you buy that might compromise your ability to continue saving money at a high rate.

    Notice how the drive to save large amounts of money causes frugal spending habits, which then enable the ability to make purchases without using debt; the three habits combine to form a pattern that brings the aspiring rich to the point of great wealth earlier than an outsider might expect.

    4. Seeking low risk/high yield investments
    If you want to be rich, the first rule of investing is to not lose money! If you have a small amount of money to invest you might be tempted to put it all into high-risk growth stocks in the hope that a big run-up in value will make you rich. But if you have — or hope to have — a large portfolio to invest, you might not take that kind of risk. Your investments will be in assets that are unlikely to collapse in price, reasonably likely to grow in value over time, and able to provide a steady cash flow while you wait for them to grow.

    For the rising rich, a perfect investment asset might be an undervalued (and therefore very likely to grow) blue chip stock (not likely to collapse) with a history of above-average dividend yields (steady cash flow). He doesn’t need for his investments to make him rich — he’s already on his way there, and just wants to further grow his wealth, steadily and predictably.

    5. Proper career focus
    My wealthiest clients have the ability to center on the most profitable ventures and to let go of nearly everything else. They often do this by delegating non-profitable activities to others or maybe even to make them somehow go away.

    This is easier to do when you have money to pay others to handle them for you, or when your finances are relatively uncomplicated. If, for example, the rich person has a business, he might pay someone to handle specific aspects of the operation that are necessary but produce little or no revenue. That frees him to concentrate all of his efforts on generating more income for his business. As a result, his business and his income grow much more quickly, making him wealthier still.

    One thing I’ve seen in my clients with means: Becoming wealthy’s really a lifestyle as much as anything else. Once you adopt it — by living beneath your means, staying out of debt, and saving large amounts of money constantly, you have capital to invest (conservatively) and to pay others to free you up to make even more money. It’s not so hard to see why the wealth of the self-made rich seems to spring out one day as if there’s a winning lottery ticket in the mix.

    But that’s simply not the case, and my self-made wealthy clients know this.

    I want you to remember that we’re here for you, no matter what stage of the journey you find yourself on, or whatever your habits might be.

    I’m here to walk with you …