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21 ways rich people think differently

 
 
chai2
 
Reply Tue 11 Sep, 2012 03:29 pm
A cut and paste from Yahoo. I highlighted certain sections that jumped out at me, there were others not highlighted I found true to.

Discuss.....


..21 Ways Rich People Think Differently

By Mandi Woodruff | Business Insider – Tue, Sep 4, 2012 10:50 AM EDT
World's richest woman Gina Rinehart is enduring a media firestorm over an article in which she takes the "jealous" middle class to task for "drinking, or smoking and socializing" rather than working to earn their own fortune.

What if she has a point?

Steve Siebold, author of "How Rich People Think," spent nearly three decades interviewing millionaires around the world to find out what separates them from everyone else.

It had little to do with money itself, he told Business Insider. It was about their mentality.

"[The middle class] tells people to be happy with what they have," he said. "And on the whole, most people are steeped in fear when it comes to money."


Average people think MONEY is the root of all evil. Rich people believe POVERTY is the root of all evil.

"The average person has been brainwashed to believe rich people are lucky or dishonest," Siebold writes.That's why there's a certain shame that comes along with "getting rich" in lower-income communities.

"The world class knows that while having money doesn't guarantee happiness, it does make your life easier and more enjoyable."

2. Average people think selfishness is a vice. Rich people think selfishness is a virtue.

"The rich go out there and try to make themselves happy. They don't try to pretend to save the world," Siebold told Business Insider.

The problem is that middle class people see that as a negative––and it's keeping them poor, he writes.

"If you're not taking care of you, you're not in a position to help anyone else. You can't give what you don't have."

Average people have a lottery mentality. Rich people have an action mentality.

"While the masses are waiting to pick the right numbers and praying for prosperity, the great ones are solving problems," Siebold writes.

"The hero [middle class people] are waiting for may be God, government, their boss or their spouse. It's the average person's level of thinking that breeds this approach to life and living while the clock keeps ticking away."


4. Average people think the road to riches is paved with formal education. Rich people believe in acquiring specific knowledge.
PERSONAL NOTE: I love love LOVE this one. I greatly question this attitude today that everyone who can should get formal education, mostly via college. More and more, young people are getting degrees that have nothing to do with the work they will seek, and I have an issue with that. People talk about "the college experience", "learning critical thinking there" etc. IMHO more people need to get out and gain life experience, not 4 more years of classes, and if parents are footing the bill, 4 more years of prolonged childhood. If you want a general education do so when you're paying for it, or study it on your own. There, I said it.
"Many world-class performers have little formal education, and have amassed their wealth through the acquisition and subsequent sale of specific knowledge," he writes.

"Meanwhile, the masses are convinced that master's degrees and doctorates are the way to wealth, mostly because they are trapped in the linear line of thought that holds them back from higher levels of consciousness...The wealthy aren't interested in the means, only the end."


Average people long for the good old days. Rich people dream of the future.

"Self-made millionaires get rich because they're willing to bet on themselves and project their dreams, goals and ideas into an unknown future," Siebold writes.

"People who believe their best days are behind them rarely get rich, and often struggle with unhappiness and depression."

6. Average people see money through the eyes of emotion. Rich people think about money logically.

"An ordinarily smart, well-educated and otherwise successful person can be instantly transformed into a fear-based, scarcity driven thinker whose greatest financial aspiration is to retire comfortably," he writes.

"The world class sees money for what it is and what it's not, through the eyes of logic. The great ones know money is a critical tool that presents options and opportunities."

7. Average people earn money doing things they don't love. Rich people follow their passion.

"To the average person, it looks like the rich are working all the time," Siebold says. "But one of the smartest strategies of the world class is doing what they love and finding a way to get paid for it."

On the other hand, middle class take jobs they don't enjoy "because they need the money and they've been trained in school and conditioned by society to live in a linear thinking world that equates earning money with physical or mental effort."

8. Average people set low expectations so they're never disappointed. Rich people are up for the challenge.

"Psychologists and other mental health experts often advise people to set low expectations for their life to ensure they are not disappointed," Siebold writes.

"No one would ever strike it rich and live their dreams without huge expectations."


Average people believe you have to DO something to get rich. Rich people believe you have to BE something to get rich.

"That's why people like Donald Trump go from millionaire to nine billion dollars in debt and come back richer than ever," he writes.

"While the masses are fixated on the doing and the immediate results of their actions, the great ones are learning and growing from every experience, whether it's a success or a failure, knowing their true reward is becoming a human success machine that eventually produces outstanding results."

10. Average people believe you need money to make money. Rich people use other people's money.

Linear thought might tell people to make money in order to earn more, but Siebold says the rich aren't afraid to fund their future from other people's pockets.

"Rich people know not being solvent enough to personally afford something is not relevant. The real question is, 'Is this worth buying, investing in, or pursuing?'" he writes.


11. Average people believe the markets are driven by logic and strategy. Rich people know they're driven by emotion and greed.

Investing successfully in the stock market isn't just about a fancy math formula.

"The rich know that the primary emotions that drive financial markets are fear and greed, and they factor this into all trades and trends they observe," Siebold writes.

"This knowledge of human nature and its overlapping impact on trading give them strategic advantage in building greater wealth through leverage."

12. Average people live beyond their means. Rich people live below theirs.
"Here's how to live below your means and tap into the secret wealthy people have used for centuries: Get rich so you can afford to," he writes.

"The rich live below their means, not because they're so savvy, but because they make so much money that they can afford to live like royalty while still having a king's ransom socked away for the future."


Average people teach their children how to survive. Rich people teach their kids to get rich.

Rich parents teach their kids from an early age about the world of "haves" and "have-nots," Siebold says. Even he admits many people have argued that he's supporting the idea of elitism.

He disagrees.

"[People] say parents are teaching their kids to look down on the masses because they're poor. This isn't true," he writes. "What they're teaching their kids is to see the world through the eyes of objective reality––the way society really is."

If children understand wealth early on, they'll be more likely to strive for it later in life.

14. Average people let money stress them out. Rich people find peace of mind in wealth.

The reason wealthy people earn more wealth is that they're not afraid to admit that money can solve most problems, Siebold says.

"[The middle class] sees money as a never-ending necessary evil that must be endured as part of life. The world class sees money as the great liberator, and with enough of it, they are able to purchase financial peace of mind.

15. Average people would rather be entertained than educated. Rich people would rather be educated than entertained.
While the rich don't put much stock in furthering wealth through formal education, they appreciate the power of learning long after college is over, Siebold says.

"Walk into a wealthy person's home and one of the first things you'll see is an extensive library of books they've used to educate themselves on how to become more successful," he writes.

"The middle class reads novels, tabloids and entertainment magazines."

16. Average people think rich people are snobs. Rich people just want to surround themselves with like-minded people.

The negative money mentality poisoning the middle class is what keeps the rich hanging out with the rich, he says.

"[Rich people] can't afford the messages of doom and gloom," he writes. "This is often misinterpreted by the masses as snobbery.

Labeling the world class as snobs is another way the middle class finds to feel better bout themselves and their chosen path of mediocrity."

Average people focus on saving. Rich people focus on earning.

Siebold theorizes that the wealthy focus on what they'll gain by taking risks, rather than how to save what they have.

"The masses are so focused on clipping coupons and living frugally they miss major opportunities," he writes.

"Even in the midst of a cash flow crisis, the rich reject the nickle and dime thinking of the masses. They are the masters of focusing their mental energy where it belongs: on the big money."

18. Average people play it safe with money. Rich people know when to take risks.

"Leverage is the watchword of the rich," Siebold writes.

"Every investor loses money on occasion, but the world class knows no matter what happens, they will aways be able to earn more."


19. Average people love to be comfortable. Rich people find comfort in uncertainty.

For the most part, it takes guts to take the risks necessary to make it as a millionaire––a challenge most middle class thinkers aren't comfortable living with.

"Physical, psychological, and emotional comfort is the primary goal of the middle class mindset," Siebold writes.

World class thinkers learn early on that becoming a millionaire isn't easy and the need for comfort can be devastating. They learn to be comfortable while operating in a state of ongoing uncertainty."

20. Average people never make the connection between money and health. Rich people know money can save your life.

While the middle class squabbles over the virtues of Obamacare and their company's health plan, the super wealthy are enrolled in a super elite "boutique medical care" association, Siebold says.

"They pay a substantial yearly membership fee that guarantees them 24-hour access to a private physician who only serves a small group of members," he writes.

"Some wealthy neighborhoods have implemented this strategy and even require the physician to live in the neighborhood."


21. Average people believe they must choose between a great family and being rich. Rich people know you can have it all.

The idea the wealth must come at the expense of family time is nothing but a "cop-out", Siebold says.

"The masses have been brainwashed to believe it's an either/or equation," he writes. "The rich know you can have anything you want if you approach the challenge with a mindset rooted in love and abundance."


From Steve Siebold, author of "How Rich People Think."

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maxdancona
 
  1  
Reply Tue 11 Sep, 2012 03:33 pm
@chai2,
How does this explain Enron, Bernie Madoff or the great recession?
chai2
 
  1  
Reply Tue 11 Sep, 2012 03:38 pm
@maxdancona,
I think that falls under number 11.

Most of the losers under enron and madoff were the middle class.
0 Replies
 
maxdancona
 
  4  
Reply Tue 11 Sep, 2012 03:48 pm
@chai2,
There are a couple of reasons that this kind of rhetoric bothers me...

1) If everyone thought this way, we would have no teachers for our kids, carpenters to build our houses or nurses to care for our sick. We depend on good people doing selfless things.

2) The idea that everyone can be super rich is ridiculous. There will never be more than a small minority of people who have Italian sports cars, a vacation mansion or their own personal jets. Rich people depend on a middle class and shouldn't be dismissive of them.

3) This line of argument assumes that everyone in society has fair shot. It's not true. Most people who are rich were born rich. There are very few examples of people with the wealth of Mitt Romney that weren't born into a family with the wealth of Mitt Romney. For that matter there are very few people with the wealth of Mitt Romney who aren't white.

4) This line of argument assumes that wealth doesn't come dishonestly. There are many examples from Bernie Madoff, to the credit default swaps that were central to our economic collapse where the people getting rich are doing things that are immoral or unethical.

I do not respect the idea that "selfishness is a virtue". This leads to wealth, but it also leads to dishonesty and abuse and is not good for society. It is people who put the needs of others ahead of their own lust for wealth that make society better for all of us.
chai2
 
  1  
Reply Tue 11 Sep, 2012 04:13 pm
@maxdancona,
I don't agree with every comment that was made in that article.

However, I don't feel your examples in 1, 2, 3, 4 was implied at all.

For instance, carpenters, nurses etc get education in specific things that interest them.
I don't see either one of those professions as particularly selfless.

I don't think it was implied anywhere anyone can be super rich, has a fair shot. Nor do I think the article was adressing specifically people with the wealth of Romney. There a lot of steps between that and poverty.

You talk in extremes, either one way or the other, and that's not what life, or money is about.
Many people could be considered in the catagory of "rich" and be nowhere near your examples.

It also stated that the wealthy aren't dismissive of the middle class, but don't think of their wealth in the same way.

Of Course there are many examples of people who came by their money dishonestly. There are many many more examples of people who did it in a totally ethical, correct way.

Address this in ways that are not to one extreme, in order not to reinforce the stereotypes the the "bitter middle class"

First, define "rich" as apposed to "middle class". If one is supposed to be able to step from one to another, obviously there are many increments of both.

Not all middle class people have the same income, it's a range. Same for the rich.

If you were, just for an example classify someone as "rich" if they had (again, just for arguments sake, picking an easy, common amount) one million dollars....oh heck, let's make it 2 million.....what does that make someone who has 1,900,000?

What if 2 families both have 2 million, but one family is 2 people in good health, and the other has 5 children, one with a chronic disease, an elderly parent that's being supported, and a main provider that becomes acutely ill and can't work, run the business for an extended time.
Who's rich?

Rather than only talking about Madoff, why not bring Warren Buffett into the equation?

Let's discuss him. He's super wealthy, but lives in the same home in Omaha, Nebraska that he's had for years, drives a nice, but reasonable car, and has comitted to leaving all his wealth to worthy causes. Not just after he's dead, but now.

Or, one can totally miss the point of the article and discussion, and concentrate of the negative.

As far as selfishness....that may not have been worded in the most pleasant way, but yeah, how can you help others, if you don't help yourself first?
0 Replies
 
Linkat
 
  1  
Reply Tue 11 Sep, 2012 04:16 pm
@maxdancona,
I think that is the point - why the rich are rich. Most people do not think this way (or would want to). More rich people think selfishly and as stated then they can give back that way - with even greater money.

Not everyone thinks this way or necessarily should, but if the article is correct that is why there are fewer rich.

An average person probably cannot feel right if they thought this way, but it is what keeps them from being rich. To me it doesn't mean one is better than the other - we just think differently.
maxdancona
 
  1  
Reply Tue 11 Sep, 2012 04:46 pm
@Linkat,
Most of the rich are rich because of luck.

The great number of the wealthy were born wealthy. There are a few examples of people who were born in poverty who became rich, but this represents a small minority of rich people.

How rich people think has much to do with with how much money they have (rather than the other way around).



0 Replies
 
chai2
 
  1  
Reply Tue 11 Sep, 2012 04:51 pm
@Linkat,
linkat, I think it was unfortunate the word "selfishly" was used in that article. The vast majority of the time, the word selfish is a negative word. I think a better word might have been "realistic".

What was written was...."If you're not taking care of you, you're not in a position to help anyone else. You can't give what you don't have.

And more importantly....

"They don't try to pretend to save the world,"

Although, sometimes being selfish is good. I'm not going to give of my time and money if it's going to take away from my family. They come first. I think that's a good thing.

I've heard and said this before, and I believe it's true, in that certain people (in this case the rich) do use a different thought process.
I firmly believe if you gave 50 poor people, and 50 financially stable people a million dollars each, and came back to them in a few years, many of the poor would be right back where they started. The stable ones would have the same amount or more in assests, and a better quality life.

It's hard not to sound like I'm making judgements. I'm not. It just is what it is.

Here's a personal example. I was raised in a very financial secure environment. My husband came from a large family that many times only had meat on the table if someone shot some squirrels or rabbit.

I've been out of permanent work for almost a year now, bringing in enough to pay bills and eat. My husbands reaction when he realized it had been 6 months I'd been unemployed was to want to go out and pawn something. He was actually bringing items out to his car.
I asked him why, that we had enough coming in. That was just his accustomed way of dealing with things like this.
I haven't tapped my retirement or other investments, and I can't see that I'll have to.
I think if I'd been raised has he was, I would have gone into that right from the start, using it to live on.

I may not be rich in the eyes of many, but I am rich in the eyes of many others. Thing is, I think like I'm rich.
maxdancona
 
  1  
Reply Tue 11 Sep, 2012 04:54 pm
@chai2,
I also disagree strongly with the point #4. The vast majority rich people have the most formal for formal education. Very expensive schools like Harvard and Yale are filled with the children of the super-rich.

Of course part of this is valuing education. The other part is connections. One way that rich people make sure their children have advantages that lower class people don't is through the old boys network.

It is often said that the connections rich people's children make in Harvard or Yale is at least as valuable as the education.

It isn't a level playing field. The deck is heavily stacked in favor of people who are born into privilege.
maxdancona
 
  1  
Reply Tue 11 Sep, 2012 04:56 pm
@chai2,
The term "virtue of selfishness" in this article was not used by accident. It is an intentional reference to Ayn Rand who wrote an article of called "The Virtue of Selfishness". It doesn't mean "realism", it means "selfishness".

Ayn Rand wrote:
"Man – every man – is an end in himself, not the means to the ends of others. He must exist for his own sake, neither sacrificing himself to others nor sacrificing others to himself. The pursuit of his own rational self-interest and of his own happiness is the highest moral purpose of his life.


My point is that wealth has little to do with virtue. It has more to do with luck.
chai2
 
  1  
Reply Tue 11 Sep, 2012 05:05 pm
@maxdancona,
So, I guess you're going to address this thread as if it was all about the super rich, even though it's been made clear it hasn't.

Sorry, I can't hold a discussion with someone who has tunnel vision, and wants to make this a enron, madoff fest.

Please feel free to continue, but I'm not going to repeat myself anymore.

For others....thoughts?

ossobuco
 
  1  
Reply Tue 11 Sep, 2012 05:08 pm
@chai2,
I'm slovenly today, sort of a respite day.

will report soon.
0 Replies
 
Setanta
 
  1  
Reply Wed 12 Sep, 2012 01:54 am
I'll have to come back to read this through carefully, but i like the idea of the discussion.
chai2
 
  1  
Reply Wed 12 Sep, 2012 05:31 am
@Setanta,
Thanks set.

I didn't want this to automatically become a pissing match.

I think there's various points that are valid here. There are also some points I personally don't agree with, but am willing to be convinced otherwise.

Others just seem to grate, but when emotions are put aside, it would have to be admitted has truth.

maxdancona
 
  1  
Reply Wed 12 Sep, 2012 06:19 am
@chai2,
Just because someone disagrees with you doesn't make it a pissing match...

... unless you start pissing.
solipsister
 
  1  
Reply Wed 12 Sep, 2012 06:32 am
@maxdancona,
Quote:
... unless you start pissing.


Into the wind.

That would be rich.
0 Replies
 
Linkat
 
  1  
Reply Wed 12 Sep, 2012 07:18 am
@chai2,
maxdancona's agruements are exactly what this article is referencing - the making of excuses of why I am not rich vs those that are rich. He is thinking like some one who is not rich.

I kinda agree with you on this - I do think rich think different; although the article is probably not 100% correct on this - there are people who probably are more middle class that would also think this way, but still stay middle class money wise. Sometimes circumstances just aren't going to change that.

And yes some rich are lucky - I also agree that a "poor" person may win a lottery and get $1million and then end up not being "rich" in the long run. Just look at how many lottery winners actually end up happy or end up being without money/family, etc.
maxdancona
 
  2  
Reply Wed 12 Sep, 2012 07:40 am
@Linkat,
Quote:
maxdancona's agruements are exactly what this article is referencing - the making of excuses of why I am not rich vs those that are rich. He is thinking like some one who is not rich.


Exactly Linkat! Which is why I take such offense at this article.

This article is a pretty personal attack on people who aren't "millionaires"; and yes, I am not a millionaire. This article starts with the richest woman in the world complaining about the "jealous" middle class that is just "smoking, drinking and socializing". That describes me (except I don't smoke or drink very much).

The idea that "following your passion" is what makes you a millionaire is all fine and good, as long as your passion is being a trade lawyer or a stock trader. If your passion is teaching or nursing, you aren't going to cut it.

There are many things in this article I think are completely illogical. The education piece being one.

But my biggest objection to this article is the idea that millionaires are somehow morally superior and this superiority is the reason they are millionaires.
chai2
 
  1  
Reply Wed 12 Sep, 2012 08:11 am
@Linkat,
Yes, exactly linkat. max has covered quite a few of the points in the article, thereby showing that there is validity to it.

max, not agreeing with someone does not make a pissing match. Being pissy does, and I'm not going to do that.

What makes your contributions uninteresting to me is that you mostly ignore any points brought up, by me or others and instead just repeat repeat repeat yourself. As you often do, you think you're covering yourself by repeatedly saying that is your personal opinion. ok, duly noted multiple times, let's move beyond that.

Please, if you have anything new to contribute, bring forth.
If you're going to say you are personally insulted, because, well basically as linkat said, you're the proof of the pudding, what exactly are you getting at?

If you're getting at the point that what you are saying is your personal opinion, and you don't think items are true, want to discuss only the few super rich, and only those who have done wrong, but not any that done right....well, you've covered that well enough, multiple times.

You're just baiting. That's boring. I'm not saying you are boring. You can choose to bring something new to this discussion, but you probably won't.
Duly noted.

I think that's all I have to say about that to you. Please, feel free to entice me some more to respond to you. Your choice.

I'll talk with you if you bring anything new, or move beyond your personal opinion, but otherwise, you're just trolling.

******

Anyway, moving on. I think it IS insulting to read things that one never considers applies to themselves, but are negative. Then if a person has the courage to really look, perhaps they would see that maybe it does apply.

We've all met rich people. Some come across as snobs, but we don't know for sure if they are or not. Might just be preoccupied.

Perhaps if we met that same person, acting the same way, but knew they were middle class, or poor, we wouldn't think of them as snobs, but rather some other attribute.

I'm thinking most people who fall into the category of rich pretty much came by the money themselves. Sure, they probably had family support, but poor people have that too.
I think a lot of it is that mindset not of "what can I earn" but rather "what can I be"

There are 2 points in there that are interrelated. One being the rich use other people money, as leverage, and the fact they don't believe money is made through logic, but emotion.

I would have to qualify that in saying I think the rich make money using logic, and at the same time maximize their money by realizing that many/most people are using their gut and emotions, and take advantage of that.

I don't mean taking advantage in the negative way, but seeing opportunity, and taking it.

A rich person my see a company that is sound, whose finances are good but will wait to buy stock in it for the moment. What are they waiting for? For other people emotions to take hold, and start buying for emotional reasons.
They get in toward the bottom of the curve, and sit back and watch the masses buy because it's the latest thing. They watch until interests wanes, or people start thinking rationally, then get out as it drops.
They were being logical in that they couldn't "save the world" and keep others from making emotional buys, but they can keep their eyes on the numbers, and on what others are feeling.
engineer
 
  2  
Reply Wed 12 Sep, 2012 08:27 am
@maxdancona,
maxdancona wrote:

My point is that wealth has little to do with virtue. It has more to do with luck.

I disagree with that. I think that the average US citizen making an average salary can end up comfortably retired, perhaps even wealthy but you have to be willing to make some up front sacrifices to build that savings and be willing to take some reasonable risks with your money to get a reasonable return. On the savings side, I think there are people who are willing to forego short term gratification for long term savings and those who aren't. On the risk side, there are some who are willing to take risks and those who think putting their money in a 0.5% yield savings account is the smart course. Of course, bad luck can wipe you out, but I think a lot of wealth accumulation is the slow and steady work of saving and investing.
 

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