21 ways rich people think differently

Personally, I don't think amassing vast amounts of money is very satisfying. That's probably the main difference between how I think and rich people think.

I think instead of seeking to be "rich" I will instead focus on being "happy."

I could make a lot more money than I do now, but it would require working longer hours, and giving up things that make me happy. I'd much rather take my kids swimming, thanks.

Engineer,

The original article was about millionaires as compared to the middle class. The idea is that there is a big difference between the two.

I think it is typical of people in the middle class (particularly the fairly well off, educated middle class) to save for retirement and many people (my parents included) have planned well and are enjoying a comfortable retirement.

That isn't the same as being a millionaire.

It is a mathematical fact that most people who are millionaires were born into wealth. Taking reasonable risks for reasonable returns is a good strategy for a comfortable retirement, but that isn't what the article is talking about.

Well said Drew.

Ok DrewDad, take into account the following points of the article....


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

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."

"[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.

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."

What are your thoughts on that?

Oh.....also DrewDad, I'm not so sure the wealthy look at the amassing of money itself as the goal.

For instance, let's again look at Warren Buffet.
For him, it's the hunt, the game. The money is just a by product.

I think there's a lot of people who end up with quite a bit of wealth, that was the result of following their passion, and not short shifting their loved ones. Indeed, once you've got the money by doing what you loved anyway, you've got the time to spend how you want.

Do you have that data handy? I can see that the very wealthy might come from great wealth, but many of those I know with one or two million made it the hard way.

actually I don't take it as an attack - just showing the differences between thought processes and a reason why rich people become rich (not the only reason).

I don't take offense to it either. To me it doesn't personally make more happy or less happy - just is - some things just is or are - doesn't mean I'm going to change my thinking. To be honest, I don't think I could and be happy with myself. But then again, I think I am generally happy with where I am in life money-wise and personal-wise.

And that is where I stand - but I realize as such I will unlikely be rich. But that's ok and I don't envy or feel anything negative towards anyone rich.

As far as rich not being snobbing. Many are not. I attended a charity event representing my company one time. Who comes and sits next to me but the probably the most famous Peter Lynch (famous as far as portfolio management goes) - he made Magellan the most sought after mutual fund when he headed it up. He has since retired making millions.

Anyone he had to be the most cordial friendly man - sitting there in a low income neighborhood (one of the worst neighborhoods in Boston) private school for this charity he pretty much headed up. Listening to the children and having small talk with me. Really seemed comfortable and enjoying himself in this meager simple event.

According to Fidelity Investments, 86% of millionaires earned their money.

"Recently, PNC Wealth Management conducted a survey of people with more than $500,000 free to invest as they like, a fair definition of “wealthy,” and possibly “millionaire” once you begin including home equity and other assets. Only 6% of those surveyed earned their money from inheritance alone. 69% earned their wealth mostly by trading time and effort for money, or by “working.”

According to an article in the New York Times....

PORTRAIT Of A MILLIONAIRE

Who is the prototypical American millionaire? What would he tell you about himself?(*)

* I am a fifty-seven-year-old male, married with three children. About 70 percent of us earn 80 percent or more of our household's income.

* About one in five of us is retired. About two-thirds of us who are working are self-employed. Interestingly, self-employed people make up less than 20 percent of the workers in America but account for two-thirds of the millionaires. Also, three out of four of us who are self-employed consider ourselves to be entrepreneurs. Most of the others are self-employed professionals, such as doctors and accountants.

* Many of the types of businesses we are in could be classified as dullnormal. We are welding contractors, auctioneers, rice farmers, owners of mobile-home parks, pest controllers, coin and stamp dealers, and paving contractors.

* About half of our wives do not work outside the home. The number-one occupation for those wives who do work is teacher.

* Our household's total annual realized (taxable) income is $131,000 (median, or 50th percentile), while our average income is $247,000. Note that those of us who have incomes in the $500,000 to $999,999 category (8 percent) and the $1 million or more category (5 percent) skew the average upward.

* We have an average household net worth of $3.7 million. Of course, some of our cohorts have accumulated much more. Nearly 6 percent have a net worth of over $10 million. Again, these people skew our average upward. The typical (median, or 50th percentile) millionaire household has a net worth of $1.6 million.
* On average, our total annual realized income is less than 7 percent of our wealth. In other words, we live on less than 7 percent of our wealth.

* Most of us (97 percent) are homeowners. We live in homes currently valued at an average of $320,000. About half of us have occupied the same home for more than twenty years. Thus, we have enjoyed significant increases in the value of our homes.

* Most of us have never felt at a disadvantage because we did not receive any inheritance. About 80 percent of us are first-generation affluent.

* We live well below our means. We wear inexpensive suits and drive American-made cars. Only a minority of us drive the current-model-year automobile. Only a minority ever lease our motor vehicles.

* Most of our wives are planners and meticulous budgeters. In fact, only 18 percent of us disagreed with the statement "Charity begins at home." Most of us will tell you that our wives are a lot more conservative with money than we are.

* We have a "go-to-hell fund." In other words, we have accumulated enough wealth to live without working for ten or more years. Thus, those of us with a net worth of $1.6 million could live comfortably for more than twelve years. Actually, we could live longer than that, since we save at least 15 percent of our earned income.

* We have more than six and one-half times the level of wealth of our nonmillionaire neighbors, but, in our neighborhood, these nonmillionaires outnumber us better than three to one. Could it be that they have chosen to trade wealth for acquiring high-status material possessions?

* As a group, we are fairly well educated. Only about one in five are not college graduates. Many of us hold advanced degrees. Eighteen percent have master's degrees, 8 percent law degrees, 6 percent medical degrees, and 6 percent Ph.D.s.

* Only 17 percent of us or our spouses ever attended a private elementary or private high school. But 55 percent of our children are currently attending or have attended private schools.

* As a group, we believe that education is extremely important for ourselves, our children, and our grandchildren. We spend heavily for the educations of our offspring.

* About two-thirds of us work between forty-five and fifty-five hours per week.

* We are fastidious investors. On average, we invest nearly 20 percent of our household realized income each year. Most of us invest at least 15 percent. Seventy-nine percent of us have at least one account with a brokerage company. But we make our own investment decisions.

* We hold nearly 20 percent of our household's wealth in transaction securities such as publicly traded stocks and mutual funds. But we rarely sell our equity investments. We hold even more in our pension plans. On average, 21 percent of our household's wealth is in our private businesses.

* As a group, we feel that our daughters are financially handicapped in comparison to our sons. Men seem to make much more money even within the same occupational categories. That is why most of us would not hesitate to share some of our wealth with our daughters. Our sons, and men in general, have the deck of economic cards stacked in their favor. They should not need subsidies from their parents.

* What would be the ideal occupations for our sons and daughters? There are about 3.5 millionaire households like ours. Our numbers are growing much faster than the general population. Our kids should consider providing affluent people with some valuable service. Overall, our most trusted financial advisors are our accountants. Our attorneys are also very important. So we recommend accounting and law to our children. Tax advisors and estate-planning experts will be in big demand over the next fifteen years.

* I am a tightwad. That's one of the main reasons I completed a long questionnaire for a crispy $1 bill. Why else would I spend two or three hours being personally interviewed by these authors? They paid me $100, $200, or $250. Oh, they made me another offer--to donate in my name the money I earned for my interview to my favorite charity. But I told them, "I am my favorite charity."

I won't disagree with that, but I know some rich people who are miserable bastards.

I'm saying "think like rich person" is an easy mantra, but it misses the point completely.




That's a selection bias. Rich people, who have a passion for making money, follow their passion and make money.

What if someone's passion is playing basketball, but they're 5' 11"?

It's all well and good to say "follow your passion" but it's not a recipe for making money.




That's equivocation. "Money" is being used as both "income" and "wealth."

Money is a great liberator, if you have it. The necessity of earning income is a necessary evil for a great many people. These two ideas are not mutually exclusive, nor do I think that "the middle class" fails to understand these two concepts.




For most people, this is bullshit. If you already have money, then yes, you can have it all.

Otherwise, it is a trade off between how much time you spend building wealth vs. spending it with your family. I know a lot of successful entrepreneurs, and all of the successful ones work their asses off all of the time. They're the boss. They're always on call, they're always working.

Once they've built their wealth they do enjoy a lot of free time. But I don't know any of them that spent a lot of free time with their kids.

Ditto. I fully recognize that what makes me happy might not make them happy, and vice versa.

I don't feel envy or anything negative toward the rich either.

My reaction was toward this article and the assumption that the rich have a superior way of thinking that made them rich.

If someone has earned a boatload of money with some combination of hard work, talent and luck then good for them. I have no problem with this until they start claiming they are superior to those Americans that haven't had such fortune or whose passions haven't led to wealth.

I'm not saying I disagree with you altogether DD.

Sure, there's rich happy people, and rich miserable bastards.

I suppose what I'm saying is I don't agree with painting the rich with the broad "you are evil (not saying you are)" brush.

I do agree with saying "follow your passion" will not automatically lead to riches.

However, you'll be happy while doing it. I believe the chances of financial success will increase that way.

Re the 5'11 wanna be basketball star, well, common sense also needs to be added in the equation.

If you think the only way to enjoy your passion for B-ball is to actually be on the court, well, that's self limiting.
Someone with that passion for the game could find many other ways to have it in their lives.

It's not about forcing yourself into the entire mold, filling it up, but finding in what part of the mold you'd be a good fit.

What I'm kinda hearing from you DD, is this all or nothing, you're in or you're out way of thinking.



You can have a bit of cake, and ice cream too.

Well, this is new info you're providing, but unfortunately it doesn't at all reflect the article, or the name of the thread.

You substituted the word "superior" (your choosing) from what was actually printed in black and white, which was "different"

I guess it would be a problem if in your mind you kept seeing a word which wasn't there.

Me? I kept the word "different" in mind, so had no problem in realizing it wasn't being said the rich think they are better.

Overall, that seems to be where you are confused max, you consistently ignore entire paragraphs, or seemingly entire posts, read words that aren't there, and substitute words of your own choosing.

It might be better for discussion if you were to actually read and refer to the language that is actually there.

Nor do I.



And that's all I'm saying about this "think like a rich person" attitude.



I'm not sure what you're reading, then.

I will say that I think the article just isn't very well-reasoned. It looks to me as if it's more propaganda than it is anything else.

DD, I completely said I was not saying you are saying you're painting them with that brush (read in the parenthesis)

You brought up the 5'11 person with a passion for being a basketball player, but said no matter how much passion he had, he wouldn't be one.
That would be, for the 5'11 person, a fatalistic attitude. I can't be a player, so I won't consider any other option that's in that field, nothing else will do.

I know that successful, in the monetary sense, people don't get to do exactly what they are passionate about. That would be silly, and they wouldn't consider thinking that way.

That's the all or nothing I'm talking about.

If you want to take your kids to the pool, does it have to be every single time the urge hits you? Of course not.

If you saw the opportunity where you could do something where you could take your kids most of the time, and be able to make more money, I'd hope you'd do it.
If you turned to not taking your kids most of the time, or never, that wouldn't be good, and you wouldn't want that either.

There's middle ground.

Maybe your associates who are working their asses off enjoy most of the hours, and only dis-enjoy a few of them.

They might tell you one thing, but inside feel another way. They may not even be complaining to you, and are happy, but you're seeing it from your place, and projecting onto them.

Maybe they haven't figured out how to make the balance more equitable yet.

Maybe a lot of other things. I don't know, I'm not them.

Is the article perfect? No. It's not an all or nothing,
It not all true, it's not all propaganda. I think, personally, the guy just didn't write it very well. That's just me.
However, although I don't agree with each point there, I think there are some truisms.

I don't think I said anything about whether or not they enjoy the work, or are happy. I said they don't get to spend much time with their kids.

How do you know that doesn't work for them, or that's the way they like it?

Is everyone supposed to spend or want to spend the same amount of time with their kids as you do?

What if someone was successful, and spent more time than you do with their kids? Would they be correct in saying you don't spend enough time with yours?

I didn't say that.


Nor did I say that.


My point, which seems to have eluded you, is not specifically about kids. It's about how working to acquire wealth involves trade-offs, particularly time trade-offs. I used spending time with kids as an example, but it's hardly the only activity that is affected by spending all of one's time at the office*. I could have used gardening, rock climbing, playing fetch with one's dog, or any number of other activities.



*"Time at the office" is also just an example. I'm well aware that people work outside of offices.

Here's the relevant portion of what I said: