Part 6/10:
Wealthy individuals leverage tax-advantaged accounts, such as employer-sponsored retirement plans with matching contributions or individual accounts like IRAs and ISAs. These accounts offer tax benefits, accelerating wealth accumulation by reducing taxes on gains.
Importantly, they favor passive investing—putting money into diversified index funds that track the overall market. This "boring" approach minimizes risk and management costs, avoiding the pitfalls of chasing hot stock tips or trying to pick winners.
65% for Living Expenses
Managing daily expenses skillfully is crucial—and often overlooked. The 65% portion covers necessities like housing, transportation, food, utilities, and basic essentials.