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But if you really want to be super rich, you may want to figure out what the New Yorkers are doing with their lives. A recent study revealed that a lot of people living in New York City are millionaires. What exactly is causing them to become rich? Why are they so ahead compared to the other cities in the United States? Is it because they are one of the financial cities in the country?
New York ranks 4th in having the most percentage of millionaires
An article published on LATimes.com revealed that 1 out of 25 New Yorkers are millionaires. With that ratio, you can assume that approximately 389,000 people in the city are millionaires. So if you walk down the streets of New York, you are bound to rub shoulders with a couple of millionaires. Isn’t that amazing?
A recent analysis from the consulting firm, Wealth Insight, revealed that New York ranks 4th in the world when it comes to cities with the most millionaires. It has to be noted that the millionaires that are counted do not include the value of their primary residence. The $1 million wealth is only in cash, bonds, investments and other assets that does not include the high valued homes. It means New York is home to 389,0000 residents with a lot more than $1 million in value. If you consider the value of the properties in this city, you can assume that these people have quite a lot of wealth in their bank accounts.
The LA Times article also said that not only is New York city home to a lot of millionaires, it is also home to a lot of billionaires too.
Does that mean you should move to New York in order to increase your net worth?
Why don’t we look at the other cities that are included in the list?
The data published on SpearsWMS.com mentioned two other US cities in the Top 20 list but they are way below in ranking. They are Houston (18th) and San Francisco (19th). But the top ranking cities in terms of millionaire density are the following:
- Monaco (29.21%)
- Zurich (27.34%)
- Geneva (17.92%)
- New York (4.63%)
- Frankfurt (3.88%)
There are also a couple of Asian cities in the list too.
The Spears article mentioned a couple of qualities that the top 20 cities of millionaires share. Most of them are key financial cities in their respective countries or continents. Zurich and Geneva are both Swiss banking centers - which probably contributes to the wealth being distributed in the city.
The other cities included in the list are those that attract a lot of wealthy and foreign visitors - like London and Hong Kong.
The article mentioned that taxes, location and even political stability are factors that attract millionaires to live in a particular city. If one of these factors take a negative turn, then this might make the millionaires pack up and leave.
So it may be wrong to simply look at the location in order for you to increase your net worth. It takes a lot more than that to become a millionaire.
Tips to increase your personal wealth
Ultimately, it is not really about the place but how you choose to use the money that you are earning. It is also not about the amount that you earn each month. There are people who are earning 6 figure incomes but are so far from becoming millionaires. That is because they are all burdened with debt.
To help you increase your net worth up to a point that you are at par with the New York millionaires, then you need to implement the following habits.Live below your means
You can only live below your means if you follow a budget plan. This is where you should start when you are trying to grow your personal wealth. This budget will show you the income that you take home each month and the different expenses that you are financing. Now this is when you will start taking control of your money. You will decide the different ways to cut spending so you can increase the extra money that you will have at the end of each month. That is very important. The only way that you can increase your net worth effectively is to increase your savings. That way, you have something to use to grow your wealth and become richer.Create a financial buffer
When we say financial buffer, we are referring to your emergency fund and your savings. Your savings can be your fund to help you setup your money so it can earn you extra income. And as for your emergency fund, this can be used to keep you from a financial disaster. When the unexpected happens, you can use your emergency fund to help you get out of a tight fix. It will keep you from having to borrow money - which adds to the stress of being in an emergency.Invest your money
One ofthe most proactive ways that you can increase your net worth is to invest your money. Remember the financial buffer that goes to your savings? That is where you will get the funds to invest. You have to learn how to invest to grow your personal wealth. Choose between stocks, bonds, equity and mutual funds. Invest in real estate if you have enough savings. This is how you can add more money into your net worth without working harder. That is how you grow your money.Know how to use debt wisely
Increasing your wealth does not mean you do not have debt. The key to credit management is to understand just how much you can afford to borrow. According to SmartAboutMoney.org, your debt should be no more than 15% to 20% of your income. So if you are earning $4,000 a month, your debt payments should be no more than $800. This is true for all your credit card debt, student loans and car loans. If you want to buy a home and you cannot do it without a home loan, make sure that your other debts are under control to keep your payments to a minimum. The only time that you can borrow beyond that percentage is when the debt will help you setup your money so it can pay for itself. For instance, buying a rental home that will require you to pay $1,000 of mortgage payments is only acceptable if that property will earn you $1,500 worth of rental income. But even then, it should be approached with extreme caution.Educate yourself
Lastly, you want to educate yourself so you can make better decisions about your money. Financial literacy is one of the important qualities of a millionaire. All the rich people are actually knowledgeable of the options that will put them in a better position financially. They are also aware of the dangers of debt and how it should be managed. These are the things that you need to do. If you are unaware of proper financial management, you will end up spending your wealth unnecessarily. All your efforts to increase your net worth will be for nothing.