Rich people not only earn money, but also understand the strategy of moving it. These people run their investments on the concept of capital rotation, in which they keep shifting their money between stocks and real estate.
How do rich people move their money?
1. Cashflow from stocks – When the market is good, rich people sell their stocks and take profit and collect cash.
2. Invest in real estate – These people invest the money earned from stocks in real estate, which gives long-term stability and rental income.
3. Liquidity when needed – If the market crashes, they mortgage or sell their real estate properties and invest in stocks again when the stocks are getting cheaper.
4. High value assets shift – When stocks become expensive, they sell them back and invest in real estate or some other asset class.
What can small investors learn?
Not everyone has money like Jeff Bezos, but by following the asset allocation strategy, small investors can also grow their money well:
Invest by maintaining a balance of stocks and bonds.
Invest in mutual funds or REITs (Real Estate Investment Trusts), which gives you the benefits of real estate without investing a lot of capital.
Invest when the market is low and book profits when it is high.
Conclusion
Money is not just about earning, it is also important to grow and rotate it in the right way. Rich people increase their wealth by shifting to the right asset class at the right time. Small investors can also boost their financial growth by smart diversification and understanding the market cycle.