I usually hate Yahoo! Finance, but occasionally they’ll post an article with a grain of truth (or in this case, 21 grains of truth).
It’s titled 21 Ways Rich People Think Differently. I love articles that focus on the psychology of being rich, because hatching a rich life is more about mindset than a bunch of “33 tips to save money” or some scammy investment strategy. You should check out the article for the full details, but here are the 21 ways in summary (with my comments thrown in whenever I couldn’t resist):
1. Average people think MONEY is the root of all evil. Rich people believe POVERTY is the root of all evil.
2. Average people think selfishness is a vice. Rich people think selfishness is a virtue.
3. Average people have a lottery mentality. Rich people have an action mentality.
4. Average people think the road to riches is paved with formal education. Rich people believe in acquiring specific knowledge.
5. Average people long for the good old days. Rich people dream of the future.
6. Average people see money through the eyes of emotion. Rich people think about money logically.
7. Average people earn money doing things they don’t love. Rich people follow their passion. <;;– I don't quite agree with this one. Check out Cal Newport's article on Fast Company, as well as his new book So Good They Can’t Ignore You
8. Average people set low expectations so they’re never disappointed. Rich people are up for the challenge.
9. Average people believe you have to DO something to get rich. Rich people believe you have to BE something to get rich. <;;– Again, the whole idea of psychology trumping a bunch of tips
10. Average people believe you need money to make money. Rich people use other people’s money. <;;– Also don't fully agree with this statement. Most investment advisors will advocate the whole "Good Debt, Bad Debt" argument, but I've seen how leverage can destroy a person.
11. Average people believe the markets are driven by logic and strategy. Rich people know they’re driven by emotion and greed.
12. Average people live beyond their means. Rich people live below theirs.
13. Average people teach their children how to survive. Rich people teach their kids to get rich.
14. Average people let money stress them out. Rich people find peace of mind in wealth.
15. Average people would rather be entertained than educated. Rich people would rather be educated than entertained. <;;– Yeah, you should be reading as much as you can. But more on books like I Will Teach You To Be Rich rather than Twilight.
16. Average people think rich people are snobs. Rich people just want to surround themselves with like-minded people. <;;– I'd also hesitate to jump to this conclusion. I've been reading The Millionaire Next Door, where the author Thomas Stanley shows that the average millionaire is a 54 year-old blue-collar business owner living in a modest neighborhood. He doesn’t look like a millionaire, and he certainly doesn’t hang out with Paris Hilton.
17. Average people focus on saving. Rich people focus on earning.
18. Average people play it safe with money. Rich people know when to take risks.
19. Average people love to be comfortable. Rich people find comfort in uncertainty.
20. Average people never make the connection between money and health. Rich people know money can save your life.
21. Average people believe they must choose between a great family and being rich. Rich people know you can have it all.
- How to start with as little as $100 a month
- The proven strategy that beats 80% of professionals
- The specific investments to start with, and where to find them in Singapore