8 Things That Separate the Rich from the Poor
You always hear quotes about the "rich getting richer and the poor getting poorer." Is this just coincidence, circumstance, or is there something that rich people do differently to get rich? Success leaves clues. If you want to make money you need to condition your mindset to attract riches. You need to learn about the paths wealthy people have taken, and you need to acquire certain habits pertaining to money. Here are 8 ways the rich think and act to make money, keep money, and get richer!
The Rich Think Big. "You can everything in life you want, if you help enough people get what they want." -Zig Ziglar. Said differently, you will be paid in direct proportion to the value you bring into the world. There are motivational speakers and teachers whom teach a few students and get paid accordingly. Then are speakers like Zig Ziglar, Tony Robins, Jim Rohn whom get up in front of thousands and are therefore compensated proportionally. In his book Rich Dad's CASHFLOW QUADRANT, Robert Kyiosaki explains the differences between being an employee, owning a small business, leveraging time and employees for big business, and having investments. On the right side of the quadrant you leverage time, employees, and money to affect more lives and therefore you are rewarded accordingly.
The Rich surround themselves with likeminded individuals. Jim Rohn used to teach that you were an average of the 5 people you spend the most time with. You go to the same restaurants, read the same books, watch the same shows, and so on. You have to upgrade your association. If you want to make more money and become a person of value, you must associate with people of value. Find a mentor, join a mastermind group, become a student of those who have done what you want to do. Try to find people who will pull you up, not bring you down. "If you are the smartest person in the room, you are in the wrong room." I learned this in high school Football. I was the third or fourth fastest athlete on the team. Determined to get faster, everyday before practice and during sprints I ran next to the fastest receiver. It forced me to compete as his level. Although, I never beat him in the sprints by the end of my senior year, I went from being the third or fourth fastest on the team to being a few steps behind the fastest receiver-and I got a scholarship!
The Rich have money saving habits. How many times have you been told to put away at least 10% of your income? Have you done it? The Rich have money saving habits. Put 10% or more of your income away every month no matter how much money you earn.
The Rich live within their means. On a piece of paper draw a line down the middle. On the left side write all of your assets (income). On the right side write down all of your liabilities (or expenses). If you have more expenses than income you are not living within your means. If every month you are racking up your credit cards with debt, because you don't have enough money, you are not living within your means. Simplify! Do you need that giant apartment you are paying too much rent for? Do you need to drive that new Mercedes or do you just need any car that will get you from A-B. Live within your means and instead of blowing money on things you truly do not need, save and invest.
The Rich leverage their money! There are many ways to do this but the basic principle is to create cash-flow. The Rich leverage real estate, stocks, bonds, and other forms of passive income to create wealth. Put your money to work for you!
The Rich have an exit strategy. An article in Times magazine suggested that to have a $60,000 income after retirement one would need a minimum of $1.35 million to retire! There are many ways to invest in your future, but the sooner you start the more you will reap the rewards of compound interest. The rich start their nest eggs at a very young age.
The Rich protect their money. The Rich may invest in opportunities, or give money to just causes, but a lot of wealthy people do not loan money frivolously. If you plan on loaning someone money, be prepared to never see that money again. If you cannot afford that risk, do not loan money. The rich also weigh out risk vs. reward and take calculated risk when investing.
The Rich continue to learn and grow. The wisest investment one can make, is in him/herself. Do something daily that increases your capacity to earn. Whether this means getting a graduate degree, reading self help books/finance books, or following a financial network. One of my favorite resources for creating wealth is Think and Grow Rich by Napolean Hill.
These few habits are timeless principles that continue to make the Rich richer. You have probably heard most of these principles before, most people have. However, if you are not wealthy or living comfortably, you are missing one or more of these key principles. Most people don't put a conscious effort towards how they spend their money and as a result end up broke. Control your impulses, live within your means, have money management systems, and sooner than you know it you will be wealthy.