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People often wonder what it is about wealthy people that makes them different. I don't mean the people who inherit wealth. I mean those who started out with humble grocery store jobs and effectively moved their way up. It turns out that the people who start from less than stellar beginnings and end up wealthy have similar traits.
Being rich first starts with a mind geared towards being rich. There are many surveys or interviews floating around as well as a lot more data on the matter. People are wondering what they can do to increase their chances of ending up rich besides grand fantasies of winning the lottery.
1. Ambition and Passion
Most rich people around today did not inherit their wealth or were born into it. Only a small 10% of rich people got their wealth through inheritance. The stats show that over half (52%) of the rich had to build their wealth from scratch with the majority being born to lower or middle-class homes.
People still kick around this idea that high wealth is because of people mooching off of the success from previous generations. The evidence is that people who are hard-working and focused on their goals end up with financial success. These are the sort of people who have a passion for their career and tackle their objectives with way more energy than the norm.
2. Business Sense and Strategy
These are the sort of people who can learn how to think like a CEO. Not everyone has the ability to strategically map out how to run a business and keep it profitable. Not everyone has a good entrepreneur sort of mindset. Rich people are quite business-oriented and develop a good sense of how to run things.
3. Know How to Detect And Use Opportunistic Information
Rich people have a good sense of taking in information and making very good guesses about things. A great example is a guy I knew was searching around for his first business project and he dug around until he found a supplier of designer jeans. He bought every pair they had at a very low price and then carved out a market for them in Canada for a while where he sold them for a hefty markup.
His model was comparable to what regular stores in the mall do. He became extremely wealthy after this and then used that money to start his dream business. Rich people are good at staying tapped into information and using that information to jump on investment opportunities that others either don't see or imagine as possible.
Wealthy individuals are also keen on keeping a large percentage of their assets in cash so they can move on things quickly if something should arise.
4. Investment Mindset and Good Sense
Understanding how the stock market works is a core skill to know in order to grow rich. They understand concepts like if their money is stagnant in the bank then over the years inflation will reduce their purchasing power. They are very good at fighting inflation and preserving their capital in a very long-term way.
They always scan for things and try to collect neutral or appreciating assets. Rich people understand the benefit of investing. Something like 86% of the wealthy has stocks, bonds, ETF, or other preferred funds to build or maintain their wealth.
Another key asset they seem to work on is their own business. Having a successful business venture is a cornerstone to being ultra-wealthy.
5. Long-Term Thinker
Many people exist in the here and now and have trouble imaging next week. A rich person will be thinking and planning in 5, 10, 20, 100, or even 1000 year projections. Some things can't be predicted and planned for and some things can be. A rich person can look at a stock and decide they will hold onto that stock until they die. Then they can do some math and predict some numbers based on current and past numbers.
Rich people have long-term investment goals and acquire their wealth over time. Some people do get lucky and make a quick buck but those sorts of people usually end up poor again. They blow the money and don't understand how to manage the money. You need financial discipline to succeed in the largest objectives. Things like saving for retirement, making sure the kids are financially covered in terms of their education costs or purchasing real estate.
6. Keep Up With Tax Laws
Rich people keep themselves very educated on how taxes work. They take advantage of deductions and loopholes or build strategies where they can minimize their loss on returns. They keep on top of how their actions get hit by the tax rules.
They go through major pains to be sure they can minimize how much they owe. The rich are also good at avoiding unnecessary things like fees or interest. Many of them either become an expert or hire an expert to help them navigate the tax world.
The rich know better than to put all their eggs in one basket and tend to have a variety of investments. Rich people have a very different asset list than people who are mid or lower class.
They might have a huge chunk in the stock market or a large percentage of cryptocurrency, maybe they buy up land or rental properties, or they might possibly be into collecting things like antiques or coins. Many of them also work to have their own business and reinvest and grow it further.
8. Strong Values
There is a common and incorrect image that rich people are shallow, spoiled, or lazy. Many people who reach millionaire status are very big into personal development.
They have strong family values as a core trait. They highly value all the things that we associate with personal excellence. Like the importance of academic achievement in the sense that you keep improving your knowledge base in a true sense. They also value financial discipline and things like loyalty.
Finding people with similar values who they trust and admire is also a high priority. They want people who help them grow even better by being around them.
As evidenced from above, the rich tend to have committed and strong bonds with their family. They value family harmony and stability. The current stats show that 86 percent of the rich are in long-term relationships and 97 percent have high compatibility in terms of financial goals and wealth management. They tend to their marriages and invest in them with a long-term plan and they work on them to keep stuff working well.
10. Interested in Helping Others
People who are rich also have a strong desire to improve the world around them in some way. More than half of the rich are interested in philanthropy or work with schools or non-profits.
They care about the environment, healthcare, curing the ills of the world like disease or education access, or they might care about veterans. Many of them also begin projects intended to help others do better in life and maximize their potential. They give advice or daily comments about how to think about things how they do.
© 2020 Mel