What do the rich do differently?

7 distinctions in how the self-made-wealthy view the world differently 

There are huge differences today between self made wealthy people and the middle class and the poor.  The outcomes achieved by all three groups all boil down to differences in thinking. 

Undoubtedly, there are systemic issues that contribute to both wealth and poverty.  Someone who grows up in poverty in learned helplessness certainly has a harder road ahead of them but they are not destined to a life of poverty..  

If you can think differently, you can change your life;  Different thinking leads to differences in actions taken, and ultimately differences in outcomes.  In working with ultra wealthy people I noticed some common themes

1. Wealthy people know that money is made through problem solving and deep strategic thinking.  The average person thinks their way to wealth is through harder work with more hours without considering what it is that they should be working on and how.  

It is true in both views that time is your most valuable asset but it is how you apply that time that counts.  Most middle class people when considering how to build wealth, default to the belief that they need to work harder, with more hours often putting in overtime, working their way up the corporate ladder or getting a second job and taking themselves to the brink of burn out.  Their focus is on increasing their pay check rather than increasing their wealth. 

Wealthy people often have spent long hours working too but much of that is in deep thought about what to be working on within their business(es) and how to solve their problems.  Often they find this deep work rewarding so rather than leading to burn out it energises them to push through.  9/10 of the self made multi millionaires I met had made their initial millions in building and then selling all or part of their business.  Once they had made money, often they explored other investments and other businesses but the common theme was the initial sale of a business. 

2. Wealthy people have learned how to delay gratification.

There is a distinction here between those who are truly wealthy and those who appear to be wealthy.  If you make 500k salary a year and spend 500k a year, you have a nice lifestyle and certainly the appearance of substantial wealth but that’s about all.  Regardless of how much you earn, the degree to which you rely on your paycheck is the degree to which you are a slave to it.  

Wealthy people save a lot of their income.  They understand that spending below their means gives them freedom.  They are not tied to making a paycheck each week in order to put food on the table.  Wealthy people are focused on the businesses and investments they are building and they reinvest profits to continue growing.  Often when the middle class has money, they are putting it aside in order to save up and spend on the next thing.  As an example, wealthy people will own nice houses, but  they are worth a small portion of their overall net worth and their housing costs are low relative to income and assets.   The middle class will own a house or houses even, but they will represent a substantial portion of their net worth.  Housing costs will often take up 30% or more of the average person’s budget.

3. Wealthy people view and manage risk differently.  

Most self made multi millionaires have made the majority of their money in building a business.  Many have gone on to sell all or part of their business for a life changing amount of money.  Even those who are extremely wealthy salaried employees (CEO’s, partners) will often have business interests outside of work that will have contributed a significant amount to their net position.  

The bets they make going into business are on themselves and their area of expertise, giving them unlimited upside and limited downside.  They don’t view the risks taken in building these businesses as particularly risky as they know what they are getting into.

Many wealthy people would view sticking to a 9-5 steady paycheck as being the more risky choice.  This option gives no real upside and they see this as almost guaranteeing financial mediocrity.

4. Wealthy people figure out how to create real value for others.

Wealthy people are usually intrinsically driven by the fulfillment they get from their work, the challenge it provides rather than the monetary rewards. They know the key in business success is in creating real value for others.  They know this is a fair exchange in a capitalist country and they expect to be compensated for it.  On the flip side they expect to pay for value when they receive it.

5. Wealthy people believe in abundance, personal accountability, and in looking for solutions to problems.

They take accountability for the outcomes in their life.  They don’t waste time bitching about problems or what other people are doing or about all the things that they believe are unfair.  They don’t blame others for their faultures.  They take full responsibility for outcomes and push forwards despite any failures or setbacks they may face.  They don’t look for permission from others, instead they take personal control.  They focus their efforts in finding solutions to problems that are valuable to others.  

They don’t blame others for being wealthier than they are, or robbing them of opportunities.  They assume that those people have done a better job of creating value for others and use it as motivation to do better themselves.  They don’t focus on things that are outside their control.  

6. Wealthy people know building wealth takes a team … 

Wealthy people know how to network.  They ask for help with what they don’t know. Often they are not the smartest of all graduates.  They are smart, but they know how to surround themselves with the right people and often this will include a team of experts smarter than them. Most wealthy people also seek out and find a business mentor.  They are not afraid to talk about money.  They know how to outsource, including knowing when their time would be better spent elsewhere or knowing where they don’t have the expertise.

7. Wealthy people often have some common traits:

Wealthy people have determination, persistence and grit.  They also tend to be frugal, conscientious and resilient.  They aren’t afraid to go against consensus.  They invest in themselves and understand that they are their biggest investment.  This includes more time spent reading and exercising.  Millionaires tend to read biographies of successful people, self development books and history.  Often wealthy people sleep less than the rest of us and work more.  They are persistent and patient with goals and take a long term view when it comes to building wealth.

In looking at the above distinctions it is clear that for those who have made fortunes, thinking differently to others comes before wealth, and is what leads to wealth not the other way around.  Many of the world's richest people started their business from nothing out of a garage.  Many took on a side hustle that they could build up while they worked a full time job investing everything into that side hustle until it was earning enough for them to leave their job. 

So while there are systemic issues that contribute to wealth and poverty, there are absolutely attitudes and habits that anyone can employ to help them build wealth and success. These attitudes and habits can 100% be learned and applied to our own lives.  And like any other habit changes, a five degree change now is much better and more sustainable than an attempt to change everything overnight about your life that lasts for 2 months.  Similar to making changes with diet or lifestyle or exercise, often the small consistent changes that build on one another over time are what makes the difference.