If you've ever wondered what money management as a rich person looks like, these are a few things that they do different than most people:

1) They invest consistently

When you hear that someone is worth $30 million dollars, they don't have that money in their bank account.

That money is out in the world making them more money. Whether it be stocks, private companies, their own businesses, or real estate, wealthy people usually don't let their excess money sit & get eroded away by inflation.

They may have a healthy cash reserve on hand to cover regular expenses, but the things that they're investing in are assets so in a worst-case scenario, they could liquidate and still have some money at the end of the day.

Income from investments is generally taxed at a lower rate than income from a job, so living off of investment income can be an easy way to save money on taxes for those who have a large portfolio.

2) They leverage smart debt

One of the wildest "wealthy" strategies to me is the idea of taking a loan out against the value of your investments.

A quick example of how this works:

Let's say you had $5,000,000 in an investment account.

Typically, if you wanted to access that money you'd have to sell some investments and pay capital gains tax on the profits. With a loan strategy, an investor can request a certain amount based on the value of their account and rather than pay capital gains, they can access their money & only pay interest on the loan, which is generally much cheaper than capital gains rates.

This strategy will become less impactful as the Fed continues to raise interest rates, but some other 'smart debt' strategies could include investing in cash flowing real estate or taking out low-interest business loans.

You don't necessarily have to be a multi-millionaire to use this strategy because with some Solo 401(k)'s, you can take out loans up to $50,000.

3) They protect themselves

While insurance may feel like more of an expense than an investment to you, wealthy people tend to view it as a tool.

Because life insurance policies are typically not included in one's estate and the payouts usually aren't subject to federal taxes, buying a large policy makes sense for a lot of rich people.

If they were to pass away, their family would be taken care of and if they stick around for awhile, they can leverage the unique benefits during their lifetime.

Another way they protect themselves & their family is through estate planning, and this is where "trust fund babies" come into play. Through careful planning, wealthy people can create a trust, place assets inside of it and then when the time comes, those assets can be transferred to the next generation tax-free. Then their family and beneficiaries can spend the money freely or in accordance to the rules of the trust.

There are A LOT of nuances and intricacies with estate planning and this is a general example, not a tactical strategy.

4) They prioritize convenience

This is the type of spending that most people consider frivolous.

Maids, drivers, full-time personal assistants, private or first class flights.

From the outside, a lot of the luxury services can seem unnecessary but at a point, I think wealthy people realize that their time is the absolute most valuable thing they have and if they can afford to save time, they will.

For example, one reason that Kobe had a helicopter was to avoid LA traffic so he could spend more time with his family 💜💛

Ramit Sethi (author of I Will Teach You To Be Rich) talks a lot about prioritizing convenience and he wrote a great article about 7 different ways to use money to save time.

5) They prioritize tax minimization

A lot of impactful tax strategies require a high income because when it comes to taxes - similar to business - you have to spend money to make money.

For example, real estate is a very common place for all types of investors to place extra cash but wealthy people take it several steps further. Instead of buying a single-family property and renting it out on AirBnb, they're buying 100-unit apartment complexes, writing off millions of dollars in expenses and accelerating depreciation - effectively reducing their taxable income until they owe as little as possible.

Then, through a 1031 exchange, they could also swap an old property for a new one and not have to pay any taxes on the disposal of the old one.

And that's only one strategy...

Some others include massive charitable donations that can be written off in full, the use of Donor Advised Funds, buying multiple homes for the write offs, or even taking advantage of a whole life insurance policy.

Overall, wealthy people approach their money different than most. They understand the role that it plays and the smart ones tend to view it as a tool, not the end goal.