One of the more interesting pieces I’ve read recently is one on the ways that rich people think differently from “average” people. The post goes through some of the different mindsets of rich people versus those in the middle class, or those who are poor. While some of the differences seem a little overblown to me, I do agree that mindset is an important part of building wealth over time.
After all, how you view money influences how you use money. If you don’t know how to use money to your advantage, you won’t ever be as rich as you would like to be. Some of the interesting mindset differences that the article (on Yahoo! Finance) pointed out included:
Lottery Mentality vs. Action Mentality
I found this one of the most interesting differences, and one that I can see in those around me. The idea is that those who aren’t wealthy have a lottery mentality. This mentality considers that you have to wait for something to happen. You need to pick the right numbers, get lucky, or rely on someone else — whether that someone else is your employer or a wealthy spouse.
Instead, rich people have an action mentality. They look for ways to make things happen. This means that they are interested in taking charge themselves, not waiting for one specific moment. If you want to build wealth, you need to take charge of your financial situation, and make the effort to improve your situation on your own. This can mean starting a side hustle or business, or developing the skills that will prepare you for a promotion and a raise.
Education vs. Entertainment
This was a very interesting take on the differences between the rich and poor. The article points out that “average” people want to be entertained. They don’t work toward improving their skills or education. On the other hand, rich people educate themselves. This doesn’t always have to mean a formal education with advanced degrees. It’s about learning. The wealthy take the time to learn about how money works, and how they can become more successful, leveraging their skills, talents, and current resources into something bigger.
If you want to make more money, and live a rich life, you need to make an effort to be educated, and not always succumb to the desire to be entertained all the time.
Focus on Saving vs. Focus on Earning
I like this distinction as well. I’ve long said that you can always earn more money, but there is a limit to how much you can cut from your budget in the name of saving. While it’s important to get a good value, and you should set aside some money for the future, there is no reason to focus so much on scrimping and saving when you are taking the steps (including education and skills development) to boost your earning power.
If you want to create the lifestyle you want, it’s important to live within your means, and consider looking for income to keep you in your idea of comfort.
What do you think? Does mindset matter a lot?