Ever watched someone like Elon or Bezos speak, and you were just in awe?
Do you wonder whether the rich are naturally brilliant or gifted, which is why they have money?
Now, I am not sure if I should define myself as “rich” as that’s a relative concept, but I do live a comfortable life and most of the time, I can afford whatever I desire, although a lot of times I choose not to make those purchases.
As a financial adviser to listed companies in Hong Kong, I also frequently interact with owners of those companies who possess a good level of material wealth, and I often find myself inspired by the way they think.
Let’s don’t get caught up in the definition of being “rich” here.
For now, let’s define being “rich’ as having abundant possessions and especially material wealth (definition from Google), whatever abundance means to you.
That said, the major difference between the rich and the poor, apart from money, obviously, is their mindset.
The way a rich person perceives and responds to events in their lives is very different from a poor person.
Unfortunately (and fortunately), unless you adopt the mindset of a rich person, it can be very difficult to break out of the vicious cycle of poverty.
Without further ado, here are seven differences I have observed that separate the rich from the poor.
1. The Rich Spend Their Money on Needs Rather Than Desires
Most rich people are frugal.
While they earn a considerable income, they don’t increase their expenses to match their money.
Instead, they use that extra money to re-invest in their businesses and goals, consequently increasing their wealth.
Well, most will take care of both needs and desires and save the little that remains — if at all anything is left.
If I could put it correctly, most people are poor because they give up long-term happiness/wealth for instant gratification or short-term pleasure.
2. Rich People Set Long-Term Goals (and Stick to Them)
What do you think of when you want to buy an asset, like stock or crypto?
A poor person’s focus is on instant gratification.
I mean, the “get-rich-quick-scheme”.
They want something that gives them results quickly.
And so, they grow tired of investments or opportunities that take long to show value, and they give up before the gain could be realised.
On the other hand, the wealthy focus on the long-term, because they know success is not an event.
This results in a much more realistic and fruitful approach when it comes to investing their money and time.
Remember, the markets always go up eventually.
3. The Wealthy Are Not Afraid to Take Calculated Risk
When you have limited income, in which case you’re not feeling rich, you tend to be more afraid to take financial risks, and that’s understandable.
However, if that is a risk you can tolerate, which is even if you lose all that money, you will be able to survive and recover through time, that may be risks you should consider.
For instance, you might still find it hard to invest in cryptos even if I asked you to invest in and stake stable coins, which really won’t fluctuate much. (Disclaimer: not financial advice and please do your own due diligence!)
Rich people, however, tend to be more open to taking calculated risks, as they view those risks as opportunities to multiply their wealth.
The key here is “calculated risk”.
Poor people like to take un-calculated risks.
For example, taking on a loan or their life savings to invest in some get-rich-quick schemes which they haven’t done due diligence on.
4. Rich People Are Always Hungry for More Knowledge
It is said that about 85% of wealthy people read at least two education, career-related, or self-improvement books every month.
That’s compared to 15% of the poor.
Now, a good number of rich people weren’t born into money.
They learned ways to create, maintain, and multiply their wealth.
And so, they understand the value of continuous learning.
You probably won’t miss a book on a self-made millionaire’s bedside.
Poor people, on the other hand, are too busy keeping up with the Jones and would rather use their free time for entertainment and living like they are rich.
5. Rich People Follow Productive Routines
Each of us has 24 hours in our day, regardless of whether we are rich or poor.
Most rich people or I should say, high-performers, have productive routines, which allow them to use their time intentionally and achieve greater results than others.
In order to make the best use of my time, it has also been a month or two since I started waking up at 6, hitting the gym at 7, and working by 9.
I also do intermittent fasting almost every day.
Self-discipline has made me feel good, and actually, gives me a sense of freedom.
Because by knowing that I need to say “no”, I have saved so much mind-space from struggling with whether I should do or eat this or that.
Most people out there, and sometimes myself, are less intentional with their time, and therefore waste a lot of their time on social media and other consumptions in general.
6. The Rich View Interest is an Asset
A rich person grows richer because they use their money to make more money.
In short, they invest to earn returns and then invest those returns too to make even more, and the cycle continues.
That is the magic of compounding interest, and the rich take advantage of it.
What about the poor?
They spend all their money on consumer goods created by the rich, and when they have nothing left, they take on debt on their credit cards.
So, they end up paying back the loan plus interest, which increases over time and keeps them poor.
This reminds me of a saying, “Think like a producer, not a consumer.”
7. The Rich Have Their Mind on the End Goal
Rich people are driven by their vision.
They know what they want to achieve at the end of it all, so they do everything possible to realize that result.
They create productive routines based on that vision.
The poor, in most cases, live for the next paycheck and look for anything that will give instant gratification.
They find it hard to commit to something and will often start routines without a clear end goal.
I understand that a lot of people have trouble finding their “visions”, and my suggestions would usually be to start from your values.
One of my core values is service and therefore my vision has always been to be a leader who serves and inspires.
Although at this stage I am still searching for the best way to live up to my vision, this vision has guided me a lot in my daily choices and what kind of person I need to be.
I hope this article has taught you something. If you have any questions or comments, drop them in the comments section and let’s keep the conversation going!
Btw, I am launching my own NFT collection called Rich Goddess, which you may want to check out. 😉