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

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.

If most of your assets are quality ASX dividend shares like these then I think it would be hard to go wrong over the long-term.

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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.

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