7 Banking Habits of Wealthy People You Should Adopt

5. Understanding Liquidity and Diversification

Keeping all funds in a single type of account or asset is a common mistake. Wealthy individuals spread their money across various types of accounts and investments to maintain liquidity and diversify risk. For example, they may keep funds in a high-yield savings account for quick access, while also investing in stocks, bonds, and real estate. This diversification allows them to balance growth with stability, ensuring they have funds readily available if needed while allowing the rest to grow.

Why It Works: Diversification spreads risk across various financial vehicles, protecting against losses in any single area. Liquidity, meanwhile, provides flexibility—essential for taking advantage of investment opportunities or covering unexpected expenses.

How to Apply: If possible, divide your funds into multiple accounts, like a savings account, a retirement account, and some investments. This gives you flexibility while helping you grow your wealth with less risk.