22 Practical Ways the Rich Build More Wealth

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Have you ever asked yourself why some people get richer while others find it hard to pay their bills? Growing wealth is not always about working harder; it often means knowing and using ways to make money grow over time.

For rich people, making a fortune is less about luck and more about using systems that increase their money power. A recent study by the St. Louis Fed shows how big the gap is between rich and poor in the U.S.

In the second quarter of 2024, the top 10% of households had an average of $6.9 million each, making up 67% of all household wealth. At the same time, the bottom 50% had only about $51,000 each, or 2.5% of the total wealth.

This gap shows how different groups handle, invest, and protect what they have. Learning the ways the rich get richer can help explain why this gap exists.

In this article, we will share 22 common ways rich people increase their wealth. These include smart investments, using tax rules well, and going after chances most people cannot reach.

Do you use any of these ways in your money life? Which ones do you like the most? Tell us in the comments!

Private Equity and Venture Capital

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Private equity and venture capital are special chances that can give very high profits. These investments mean putting money into new businesses or buying shares in private companies that are ready to grow.

The risks are bigger than in regular investments, but the possible gains can be huge, as shown by early investors in companies like Uber or Airbnb. Rich people often use their connections to find good opportunities and get into these deals.

With time, good investments in private companies can greatly grow their wealth.

Utilizing Tax Havens

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Tax havens are regions or countries with favorable tax laws that allow wealthy individuals to protect their money. By holding assets in these locations, they reduce their tax burdens legally, keeping more of their earnings to reinvest.

Popular destinations like the Cayman Islands or Switzerland attract billions in wealth through low or zero tax rates. While controversial, this strategy highlights how the rich use global financial systems to preserve and grow their fortunes.

It also sparks debates about fairness in tax policies.

Maximizing Tax Deductions

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Tax rules allow deductions that lower taxable income a lot, and rich people know how to use them well. These include deductions for business costs, donations to charity, and losses on investments.

Rich people often work with tax experts who find ways to save money. This helps them put more money into growing their wealth while paying less in taxes.

It is a legal and smart way to make their money go further without taking on more risk.

Compound Interest

Compound interest is one of the simplest yet most effective tools for growing wealth. It works when money earns returns, and those returns are reinvested, creating a cycle where gains generate even more gains.

Wealthy individuals often start early, allowing their investments to benefit from decades of growth. For example, an initial investment of $100,000 earning a 7% annual return doubles roughly every ten years, growing to over $800,000 in 30 years without additional contributions.

This powerful effect helps the rich build substantial wealth with minimal effort beyond the initial investment.

Diverse Investment Portfolios

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A way to secure and grow money is by not keeping all assets in one spot. Rich people put their money in stocks, bonds, real estate, and other things like private companies or valuable art.

This method lowers risk because if one investment loses value, others may gain. Spreading money across many options also helps protect during bad economic times, keeping their wealth steady and growing.

By using advice from money experts and market knowledge, wealthy people build plans aimed at lasting success.

Real Estate as a Wealth Builder

A two-story blue house with a front porch, flanked by neighboring homes. A for-sale sign is displayed in the front yard.

Real estate offers both immediate income and long-term value, making it a favorite investment for the wealthy. Properties can generate steady cash flow through rental income while appreciating over time.

Tax benefits, such as depreciation and deductions, reduce the overall cost of ownership, increasing profitability. Wealthy individuals often reinvest gains from one property into new ones, further expanding their portfolios.

This cycle of acquiring, holding, and reinvesting in real estate builds wealth steadily while offering a layer of financial security.

Capitalizing on Capital Gains

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The tax system often treats money made from investments better than regular pay. Money gained by selling things like stocks or property is taxed less than money earned by working. Rich people build their money mainly through these investments, using this tax gap.

This helps them pay less tax and put money into other chances to make more. Over time, this process lets the rich grow their money and keep more of it.

Using Leverage (Good Debt)

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Debt is not always a liability, for the wealthy, it’s often a tool to build wealth. They use borrowed money to invest in income-generating assets, such as real estate or businesses, amplifying their financial power.

For instance, purchasing a property with a loan allows them to earn rental income while benefiting from property appreciation. Since the returns on these investments often exceed the cost of borrowing, the strategy increases their overall wealth.

Using debt wisely allows the rich to grow their assets without depleting their own resources.

Controlling Operating Costs

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Rich people and businesses keep a close watch on their spending to make the most money. They find ways to cut costs without lowering quality, so they have more money to save or invest.

For example, big companies often get better deals from suppliers or buy tools that help them work faster. On a personal side, wealthy people usually choose things that are useful instead of spending on extra luxury that doesn’t help them earn more.

This careful control of money helps their wealth grow over the years.

Networking with Financial Experts

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Access to skilled professionals is a major advantage for the wealthy. They build teams of advisors, including accountants, wealth managers, and investment strategists, to guide their financial decisions.

These experts bring specialized knowledge, helping to identify opportunities and avoid costly mistakes. Their advice ensures that every dollar works harder, contributing to long-term wealth accumulation.

By maintaining strong relationships with financial professionals, the rich gain insights and strategies that keep their wealth growing steadily.

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Exploiting Economic Cycles

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Economic ups and downs create chances that rich people are especially able to use. When the economy is bad and prices go down, they usually have the money to buy cheap stocks, homes, or companies. As the economy gets better, these investments often grow in value, bringing big profits.

For example, many wealthy buyers bought homes during the 2008 financial crisis and sold them later for much more. This skill to buy when times are tough helps increase their wealth over time.

Benefiting from Government Policies

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Government policies frequently create conditions that favor wealth accumulation for the rich. Tax reforms, subsidies, and economic incentives often provide advantages for those with significant assets or businesses.

For example, tax cuts for corporations or capital gains reductions disproportionately benefit high-net-worth individuals. Programs aimed at stimulating economic growth can also create lucrative opportunities, such as contracts for infrastructure projects.

These policies allow the wealthy to strengthen their financial position while reinvesting in growth-focused initiatives.

Lobbying for Favors

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The rich often use their money to affect laws and rules that help their goals. By trying to convince lawmakers, they can make laws that protect their businesses, lower their taxes, or create new ways to earn money.

For example, areas like technology, finance, and healthcare often push for rule changes that help them earn more. Though this approach causes debate, it shows how the wealthy use their power to keep and grow their money.

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Building and Scaling Businesses

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Entrepreneurship is a major driver of wealth for many affluent individuals. They create businesses that solve problems or meet consumer demands, scaling these ventures to increase profitability.

Once established, successful businesses generate consistent income and can often be sold for substantial sums. Many wealthy entrepreneurs reinvest their earnings into other ventures, creating additional streams of revenue.

This cycle of building, scaling, and reinvesting allows business owners to grow their wealth exponentially over time.

Monetizing Intellectual Property

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Intellectual property includes things like patents, copyrights, and trademarks, and helps rich people make money all the time. New inventions, art, and brand names bring in cash through deals or royalties. For example, a patent for a new product can give money for years without more effort.

Trademarks also keep brands safe, so only the owner can earn money from them. This setup lets people turn ideas and creativity into things that grow their money a lot.

Mergers and Acquisitions

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The wealthy often grow their influence and assets through mergers and acquisitions. This involves purchasing companies to expand operations, enter new markets, or gain access to valuable resources.

These transactions can lead to substantial returns by increasing the profitability and reach of their business holdings. Acquiring underperforming companies at a lower cost and improving their operations is a common strategy.

Over time, this method of growth strengthens financial stability while creating new opportunities for wealth generation.

Leveraging Insider Knowledge

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Access to information not widely available gives the wealthy a significant edge in decision-making. Their connections within industries provide insights into trends, opportunities, and potential risks before others can act.

This allows them to make informed decisions about investments, business strategies, or market shifts. While the misuse of such information can cross legal boundaries, having advanced knowledge often helps them avoid losses and capitalize on lucrative opportunities.

This advantage further solidifies their financial position.

Long-Term Thinking

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Rich people usually choose plans that aim for success over many years, not quick profits. They think ahead carefully when they invest, run businesses, and make money choices, looking at a future that lasts for years or even decades.

This way of thinking helps them handle short-term problems and make the most of chances that take time. For example, keeping stocks for many years helps them grow their money through the market’s rise and earning interest on interest.

This way of thinking is important for building lasting wealth.

Risk Management

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Managing risks effectively is a cornerstone of maintaining and growing wealth. The wealthy use tools like insurance, hedging, and diversification to minimize potential losses.

For example, they insure valuable assets, invest in a variety of markets, and create contingency plans for financial downturns. This careful approach ensures that unforeseen events or market volatility have a limited impact on their overall wealth.

By reducing risks while pursuing growth, they build a strong financial foundation that supports their long-term goals.

Intergenerational Wealth Transfer

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Passing wealth to the next generations is very important for many rich families. Trusts, wills, and estate plans help keep assets safe and pass them on smoothly, with less tax to pay.

Rich people often set up family offices to handle money and give advice to younger family members. This helps protect their assets and teaches good money habits.

These steps help families keep and grow their wealth over time, building lasting legacies.

Setting Up Trusts

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Trusts are a financial tool that allows the wealthy to manage and protect their assets. These legal arrangements ensure that wealth is distributed according to specific wishes, often bypassing costly taxes and legal complications.

Trusts can also provide a steady income for beneficiaries, preserving the principal amount for future generations. Many high-net-worth individuals use them to fund educational expenses or philanthropic activities.

This strategy ensures that wealth is not only protected but also used strategically to support long-term goals.

Access to Superior Education

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Education is very important for creating and keeping wealth, and rich people often spend a lot on the best learning options. Top schools and universities offer good education, strong connections, and expert knowledge.

These places get the next group of rich people ready for leading jobs in business, technology, and other areas. Continuing education through special courses and certificates helps wealthy professionals stay ahead in their fields.

This focus on learning helps them stay strong and able to grow their wealth.

The Path to Greater Riches

A woman in a red blazer holds a fan of U.S. dollar bills in one hand and extends her other hand forward against a plain white background.

Rich people build wealth by using smart plans that mix knowledge, access, and chances. They know how to invest carefully, lower risks, and use the economy to their advantage, which makes them different in money matters.

Learning about these ways shows the systems that keep their money growing and points out the benefits they use. These plans need resources and skill, but they also teach ideas that anyone can use to get better at money management.

With time, good planning, and smart choices, growing wealth is possible. The path to more money starts with understanding and using these proven ideas.

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AI was used for light editing, formatting, and readability. But a human (me!) wrote and edited this.

Author

Michael Gregory

Will Think is the founder and owner of WilThink.com. After a long career in finance, he retired early and decided to put his knowledge to work in a different way—by helping others. He is also a dad and an avid runner.

Will is a Chartered Financial Analyst (CFA) with over 20 years of experience in real estate investing. He’s also a published journalist whose writing has appeared on MSN, the Associated Press, and other major outlets.

His content combines real expertise with a clear, no-nonsense style that’s both smart and accessible.

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