Tips on how to stay rich, from Australia's richest people

Here are some of richest Australians sharing how to stay rich.

| More on:
a woman

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

It's hard to get rich, but it can also be hard to hold onto the wealth.

As many stories as we hear about people having wealth, there are also many stories about the rich throwing all their money away or a crisis ruining everything.

As part of the Australian Financial Review's Rich List series, the paper spoke with a number of wealthy people to discuss how to stay wealthy.

The GFC was quite tough on many of Australia's richest like Fortescue Metals Group Limited's (ASX: FMG) Andrew Forrest who suffered a $7 billion fall in wealth because of a large decline of the iron price. Mr Forrest's advice was "It's incredibly important to show resilience in the face of market pressure."

Marcus Blackmore from Blackmores Limited (ASX: BKL) said, on the operational side of things, that it's important to make sure the right people are empowered to make decisions in a business. In terms of fixing problems, he said "My old man used to say to me, 'Never worry about the past, you can't do much about it. Worry about the future.'"

You can look at many examples of what went wrong for people or businesses. A lot of the time I think it comes down to overloading with too much debt. You can't really go wrong if you don't carry debt, that's why I think some of best shares on the ASX are also ones that are debt free such as Altium Limited (ASX: ALU) and Washington H. Soul Pattinson and Co. Ltd (ASX: SOL).

Foolish takeaway

If you aren't invested in risky assets and you have a healthy level of cash on hand then it would be hard to lose it all, particularly if you are careful with your debt levels.

The harder you have fought to create your wealth the more you will value it and know why you need to be careful not to fritter it all away.

Tristan Harrison owns shares of Altium and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of Altium. The Motley Fool Australia owns shares of and has recommended Blackmores Limited and Washington H. Soul Pattinson and Company Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Personal Finance

A man walks up three brick pillars to a dollar sign.
Personal Finance

How to replace your wage with passive income in 3 steps

It’s a straightforward process to replace a salary with dividends.

Read more »

Cubes with tax written on them on top of Australian dollar notes.
Tax

How much tax do your ASX shares pay? Why it might matter

Taxes. One of the two unavoidables in life.

Read more »

a small girl empties a piggy bank of coins onto a table while her mother looks on in the background.
Personal Finance

Relying on bank term deposits to build wealth? You need to read this

Looking to grow your net worth? Term deposits may not be the best choice.

Read more »

Elderly couple look sideways at each other in mild disagreement
Retirement

How would the proposed unrealised gains tax impact your superannuation?

If passed, the impacts could be profound for those with higher-end super balances.

Read more »

a mature but cool older woman holds a watering can and tends to a healthy green plant growing up the wall in her house.
Personal Finance

$50,000 in an offset? The hidden cost of not investing in ASX shares

Saving 7.5% using an offset is not the same as earning 7.5% on shares.

Read more »

A young woman with a ponytail stands at the crossroads, trying to choose between one way or the other.
Personal Finance

Dividends or capital gains from ASX shares: Which are better?

Should investors be more interested in one type of return over another?

Read more »

parents putting money in piggy bank for kids future
Retirement

Delayed retirement and other costs of being the Bank of Mum and Dad

A survey shows delayed retirement and lost opportunities to travel are among the costs.

Read more »

A guy wearing glasses tries to show off his muscles.
Personal Finance

5 ways ASX shares investors define financial success

What does financial success mean to you?

Read more »