How the Wealthy Think Differently Than the Rest of Us….

September 07, 2012

Last week, I talked about the messages you give yourself prior to setting goals. In the next 60 days, you’re going to hear a whole lot of political messages talking about the poor, the middle class, and the rich. I’m not going to get into a political discussion about which policy positions I think would be best for the country, but I will talk about some financial behaviors and attitudes discussed by the author, Steve Siebold, of a book called How Rich People Think. I read an article written about 21 ways rich people think differently. While they are all important differences, a number of them stand out as things that we can all do better and perhaps take our own financial lives to greater heights. If we all started to think a little bit more like this, I can only imagine what differences we could make in our lives and the lives of our families. (Disclaimer: I am NOT part of the top 1% of income earners in the country. I just happen to have been fortunate enough to advise a portion of that population in my career)

Many people think money is the root of all evil, but rich people think that poverty is the root of all evil. Money provides opportunity; poverty produces all kinds of unwanted outcomes and behaviors. I have, because of my job, met a very large number of wealthy people over the last 20 years. Most of them have been incredibly hard working, family-oriented perfectionists who made great personal sacrifices in order to build their wealth. Their fundamental belief that not money, but poverty is the root of all evil is a driving force. I know in my life, the fear of being poor is what drove me to further my education and put in long hours at work. If we all picked up this line of thinking, our personal financial lives could be better.
Most people have a lottery mentality, but the wealthy have an action-oriented, problem-solving mentality. I’ve seen this up close and personal with many of my friends and family members who get very excited when the lottery jackpot gets very big. They seem resigned to the fact that they are locked into their current financial state with no hope of anything different. I tend to be the “dreamer” or “idealist” of the family and always think that I’m just one great idea away from being one of the rich. Unfortunately, I always have the next great idea right after I buy the product that solves the problem I want to solve…But, I’ll keep thinking!
Most people focus on saving, but the rich 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. Even in the midst of a cash flow crisis, the rich reject the nickel and dime thinking of the masses. They are the masters of focusing their mental energy where it belongs: on the big money.” Personally, this is one area where I could use a little tweak to my thought process. I am focused on saving for retirement, saving for college for my kids, and saving money on day to day expenses and it’s possible that I have missed major opportunities. In fact, I know I have. In the midst of a real estate collapse, there are many wealthy people picking up properties at a bargain basement level price while many people are focused on getting a mortgage modification or worried about buying and seeing the price go even lower. Risk taking is the way the wealthy earn significant sums of money at once. Informed risk taking is the basis of entrepreneurship and a major reason that the wealthy are wealthy and how they differ from the rest of us.
Many people believe they must have EITHER a great family OR be rich. Rich people know you can have both. The idea that the wealth always comes at the expense of family togetherness or happiness is misguided, Siebold says. “The masses have been brainwashed to believe it’s an either/or equation. The rich know you can have anything you want if you approach the challenge with a mindset rooted in love and abundance.”

Last week, I talked about the messages you send yourself and how they can be used for good not evil, and this builds upon that concept. If some of those internal messages can be the same messages that the wealthiest people in our country send themselves, maybe your future can be one of greater prosperity for yourself and your family. If we’re going to learn from someone, why not let it be from a guy who has spent years studying the attitudes, thought process and behaviors of America’s wealthy? Internal messaging matters! I know I have some work to do on that front…