What Are the Differences Between the Rich and the Poor?
Published on - November 1st, 2011 (by J.D. Roth) Long ago, when this site was young, I reviewed Secrets of the Millionaire Mind by T. Harv Eker. Eker believes that we each possess a “financial blueprint”, an internal script that dictates how we relate to money. Our blueprints are created through lifelong exposure to money messages from the people around us. Unfortunately, Eker says, most of us have faulty blueprints that prevent us from building wealth.
In his book, Eker lists seventeen ways in which the financial blueprints of the rich differ from those of the poor and the middle-class. According to him:
- Rich people believe: “I create my life.” Poor people believe: “Life happens to me.”
- Rich people play the money game to win. Poor people play the money game to not lose.
- Rich people are committed to being rich. Poor people want to be rich.
- Rich people think big. Poor people think small.
- Rich people focus on opportunities. Poor people focus on obstacles.
- Rich people admire other rich and successful people. Poor people resent rich and successful people.
- Rich people associate with positive, successful people. Poor people associate with negative or unsuccessful people.
- Rich people are willing to promote themselves and their value. Poor people think negatively about selling and promotion.
- Rich people are bigger than their problems. Poor people are smaller than their problems.
- Rich people are excellent receivers. Poor people are poor receivers.
- Rich people choose to get paid based on results. Poor people choose to get paid based on time.
- Rich people think “both”. Poor people think “either/or”.
- Rich people focus on their net worth. Poor people focus on their working income.
- Rich people manage their money well. Poor people mismanage their money well.
- Rich people have their money work hard for them. Poor people work hard for their money.
- Rich people act in spite of fear. Poor people let fear stop them.
- Rich people constantly learn and grow. Poor people think they already know.
Out of context, some of this advice seems glib and facile. In the book, however, Eker explains each point, demonstrating how successful people discard limiting beliefs while the unsuccessful succumb to them. This book was instrumental in changing my own attitudes toward life and money.
Recently, somebody pointed me to a similar book: The Top 10 Distinctions Between Millionaires and the Middle Class by Keith Cameron Smith. I haven’t had a chance to read this yet (it’s on my to-do list), but I glanced through some of it at Google books. Like Eker, Smith attempts to differentiate between the mindsets of the rich and the rest of us.
His ten distinctions are:
- Millionaires think long-term. The middle class thinks short-term.
- Millionaires talk about ideas. The middle class talks about things and people.
- Millionaires embrace change. The middle class is threatened by change.
- Millionaires take calculated risks. The middle class is afraid to take risks.
- Millionaires continually learn and grow. The middle class thinks learning ended with school.
- Millionaires work for profits. The middle class works for wages.
- Millionaires believe they must be generous. The middle class believes it can’t afford to give.
- Millionaires have multiple sources of income. The middle class has only one or two.
- Millionaires focus on increasing their wealth. The middle class focuses on increasing its paychecks.
- Millionaires ask themselves empowering questions. Middle-class people ask themselves disempowering questions.
Some of the items on Smith’s list seem to be derived from Eker’s philosophy. But although there are similarities, Eker’s list gives me warm fuzzies and Smith’s list does not. I’ve spent some time trying to figure out why.
Maybe the difference is this: From my experience (and your experience may be different), Eker’s many distinctions hold true (at least in the U.S.). I’ve seen the differences he describes in my own life. But I’m not convinced that the differences Smith lists do hold up.
I know lots of people who talk about ideas rather than things and people, for instance, and I know many folks who embrace change. Many of my friends are continually learning, but they’re not millionaires. And haven’t we seen statistics that show, based on a percentage of income, poor people give more than the rich do? I’m not ready to dismiss Smith’s list outright — I need to read his book to see how he supports his claims — but my initial reaction to his list is skepticism.
But I think both authors are too quick to dismiss systemic causes of poverty. And perhaps neither of them has ever actually been poor. Some of their criticisms make sense, but some are grounded in a mindset of wealth. “Rich people act in spite of fear,” Eker writes. “Poor people let fear stop them.” Why is that? Could it be that the rich can act in spite of fear because they have a safety net?
There’s no question that wealth brings opportunities, both in the U.S. and in other countries. Those with money have more choices. The rich can take risks, and they’re often rewarded for taking them. (Thus, “the rich get richer”.) I have so many more options now than I ever did when I was a boy, when my family was poor. I’m one of the lucky ones who has managed to make good. Yes, a lot of that was through hard work, but there’s no question that I’ve been lucky. And I think this element of “luck” is something that both Eker and Smith miss.
There are differences between the mindsets of the rich and the poor, of this I’m sure. But I think they’re closer to Eker’s list than to Smith’s. (And, really, they’re probably closer yet to the attitudes described in The Millionaire Next Door.)
What do you think? From your experience, what are the differences between the rich and the poor? How do the rich think differently? What behaviors to the poor and the middle-class have that the rich do not? Or is it even possible to create distinctions like this? Does it all just come down to luck?
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Obnoxious.
I can’t believe people actually write these things in books.
Sure, in a context it might be somehow “explained” but it’s still idiotic.
What they call “poor people mindset” is caused by the pyramid of needs and wants. Unfortunate people need to focus on survival therefore obviously will not just take risks to make profit.
Regardless, many do, pushed by our society to “have” superfluous status goods and then find themselves in worse situations.
Sad.
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You’re missing a small point: poor people often get rich. What causes this? That’s what the lists are about.
If distinctions between what causes poverty and wealth offend you, then it’s not the list that’s wrong — it’s being easily offended.
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Often…really? Horatio Alger in hizzhouse…
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I don’t think often is the right word in the sense that athletes don’t go pro often, bands don’t get signed often, and actors/actresses don’t make it big often. Some people try and fail, but some do make it. Such is life in this world regardless of where you live or where you are in the food chain. In the US you get a chance to try.
As an example, I work for a man who’s family immigrated from Mexico. He worked in fields when he was a child, and now he owns a business that grosses 150 million a year. Can it be done? Yes and he is proof. Will you do it?…
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Make excuses all you want, I’m a college dropout with an above average income, and I’m 22. I don’t know of anyone else close to my age who isn’t making just stupid choices.
I know dozens of millionaires and hundreds of poor men. I swear to you: the general difference is attitude, character, and choices. Anyone who disagrees is ignorant, delusional or both.
Those who know me know that I haven’t slept much in years, I make good money but reinvest just about every dime, and am obsessed with bettering myself every day without exception. It’s intense, but good behavior just about always pays dividends, no matter what the whiners claim.
If you really care about the poor, find a way to teach them everything I just said. It’ll help them more than a check.
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When poor people get rich, it is as often as not a stroke of luck or circumstance, not due to any particular action of their own.
Of course there are good choices and bad choices, and good choices can lead to financial stability even at very low income levels. However, they will often not make you rich. Someone could do everything right, arguably, and not become rich. Meanwhile, another person could have several slip-ups and still end up with more money than they know what to do with. Case in point: some people become millionaires because they win the lottery- but playing the lottery is an arguably terrible financial choices.
In addition, *most* rich people (at least in the US) are rich because they come from good family circumstances. They are born into money, and given all the privileges they need to retain that status or improve upon it. Poor people are unlikely to ever become rich regardless of what they do. Those that do become rich are the exception rather than the rule.
Again, I do like the mindsets these points bring up because they show how even someone will a smaller income can make good choices and maximize their opportunities. But they’re unlikely to take a person from poor to rich without some kind of situational or systemic change. The causal link they draw between a person’s actions/cognitions and their wealth is not that strong.
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I disagree with your assertion that poor people who get rich usually do so by luck.
For example, I know several dirt poor immigrants who worked their way up to middle class once they came to the U.S.–through a mindset composed of exactly the qualities in the posted lists!
I myself was born into a lower-middle/poor family, and now I’m in the upper 10%. It was not by chance–I worked really hard in school, I put off spending on much of anything until I was nearly 35 years old, I planned my career, I worked hard at it, I saved & invested etc. I’m only lucky in the sense that I’m healthy & no natural disasters like hurricanes or tornados struck while I was doing this–but I didn’t win the lottery by any means which is what many people mean by “being lucky”.
Certainly it is true that some poor people have trouble through their cultural background not emphasizing education and so on. I do think this is a problem, and that these people are often unable to follow the simple rules on the lists because of these disadvantages. But it is nevertheless true that if you can follow the rules on the list, and they aren’t that difficult for many people, you will indeed very likely to end up rich or at least much richer than if you don’t.
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Do you have evidence behind your statement “*most* rich people (at least in the US) are rich because they come from good family circumstances. They are born into money, and given all the privileges they need to retain that status or improve upon it”? At least according to the research done in the Millionaire Next Door, about 80% of millionaires are first-generation millionaires. Based on that evidence, it would seem that most rich people in the US are self-made.
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Poor people do not often get rich; it’s an unusual occurrence, as the most recent social science research demonstrates. The Wall Street Journal, of all places, wrote about this in 2008: http://blogs.wsj.com/economics/2008/11/12/report-shows-stagnant-upward-mobility-in-us/
The LA Times wrote about this in the last year: http://articles.latimes.com/2011/jan/02/opinion/la-oe-mcmanus-twous-20110102
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Okay, Kris and I are finished with today’s touring in Cusco, Peru. That gives me some time to research the archives for the post i mentioned earlier. (I’ve also posted this comment in the main flow at like #186 or something.)
In February 2008, I shared research from the Economic Mobility Project, which found:
Though it’s difficult to move from one end of the economic spectrum to the other, there’s a lot of bubbling up and down to (and from) the vast middle class.
So, yes, those arguing that people do move from poor to rich are correct. But it’s not common, especially for those without an education. I’m not sure about economic mobility in other countries, but I suspect in the U.S. it’s actually easier to move up and down than in other parts of the world. (I’d love to see some data, though.)
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2008, 2009 – interesting dates. 2012 & 2012 would be interesting reassessment dates. It would also be interesting to see what folks though about such ideas in 1929-1940.
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Ah, to be 22 again.
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I believe that the underlying message of the lists is about gratitude. If we live from a place of gratitude no matter what the circumstances, than we may be able to rise avove the situations. We do create our lives, and how we handle our situations and what we focus our attention on in our situations makes the differences of our experience.
As a single parent with no financial help I have struggled a great deal financially. However most of my crisis situations were self induced. I have belief systems that block my experience of abundance, it is changing,very slowly, but it is changing. I need to become more emotionally intelligent and smart about making my money work for me.
There is so much shame involved with money for most of the poor and middle class, if we can work through our emotional blocks ie, shame, than we can move forward, and…those lists won’t be so offensive as much as helpful.
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I don’t see anything wrong at all with Eker’s list. When I read the distinctions between the rich and poor, I took them each as a mindset in itself. For example, a poor mindset person wins the lottery. Although he has the huge windfall, he still ends up broke because he thinks like a poor person. He spent all his money instead of thinking like a rich person. There are also people who are physically poor, but have rich mentalities. They are the ones who dig out of the darkness to greater success.
I don’t know why so many people are offended by this. The lists really have nothing to do with money. Take off the blinders and look at it from the perspective of a rich thinker and a poor thinker. You have to ask yourself which one is you. If you are the poor thinker, learn to become a rich thinker.
This is coming from someone who used to be a poor thinker. I am mostly a rich thinker now, and I see that if I keep in my path, I will be monetarily wealthy in the future also. And now that I’ve made the distinction between the two types of thinking, it is very easy to see the examples in the world around me.
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If they had ‘nothing to do with money’ the terms used wouldn’t be ‘rich’ versus ‘poor’ ‘millionaires’ versus ‘middle-class’ – they would be something like ‘successful’ and ‘unsuccessful’.
Or happy/unhappy or some other combination that isn’t intrinsically tied to money.
And the words ‘wealth’ ‘net worth’ ‘income’ and ‘profits’ wouldn’t show up quite so much.
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In my comment, I state that I only agree with Ekler’s observation, not the second list. So two of the terms in your comment don’t even apply to what I said. As for the terms rich and poor, they can relate to much more than just money. One of those relations being a person’s mentality.
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Perhaps there should be another item on the lists?
“Poor people are uncomfortable overall with thinking about money and planning on getting richer–they “put down” such thoughts as evil and grasping, and they often spend or give money away quickly when they do get it to demonstrate how much they dislike money (for example sports stars or lottery winners who go bankrupt despite their billions….)
In contrast, rich people acknowledge that money is in fact necessary and therefore they plan ahead so they have money when they need it and to do the things they want.
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I think these are a list of extremes that suggests that one is either “rich” or “poor.” There seems to be no in between.
There are some commonalities that most of us CAN control (or could have controlled) that does give us a heads up to become rich no matter what our origin of social class is. However, most of us prevent ourselves from becoming rich or building wealth. How? Well, they are spelled out in detail in “How We Prevent Wealth: A personal finance reflection.” These barrers include setting ineffective goals, not educating ourselves, and getting caught in the upgrade cycle.
The entire book can be read online for free at howwepreventwealth [dot] com.
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Well, I’m glad after you posted those – yes, glib and facile – lists, you pointed out that they were clearly missing a lot of The Point, because I was on the path of losing a LOT of respect for you. But damn, why post them at all? It’s one thing to say, “Here are some common mindsets associated with people who accrue wealth well – are you in that group? Should you change the way you think?” It’s another to say, “Here are the mindsets that make rich people rich, and here – remember, it’s all about mindset! – is why poor people stay poor.” A lot of this is just downright insulting. The relationship between poverty and wealth is complex everywhere.
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Why post these lists at all? Because the first is from a best-selling book and the second was suggested to me by a Get Rich Slowly reader. These ideas are out there, and though not all of us may agree with them, there are people who do. And even if we don’t agree with the lists, I’m sure there are some elements that we do agree with.
As I said in the post, the relationship between wealth and poverty is complex. Trying to boil it down to these points (especially when ignoring global, historical origins of poverty) is crazy. But at the same time, I’m willing to wager that we have all had sets of friends who shared certain circumstances, and one of those friends was able to build wealth when the other(s) did not. Why is this? I think it’s an important question, and once certainly worth discussing at Get Rich Slowly. After all, our goal here is to build our wealth, right? Are there certain mindsets that are more conducive to this than others?
I’d like to remind folks of something I’ve said from this site’s beginning: You don’t have to agree with a book to get something out of it. In fact, some of the most influential books I’ve ever read are those that I think are way off base.
Just because you don’t agree with the authors’ points doesn’t mean they’re not worth discussing!
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JD:
I’ve half-jokingly suggested you change the name of your site to “Get Rich Quickly,” assuming the meaning of “rich” is not defined in monetary terms.
Many people who are financially rich today were already “rich” before they ever had the money. Many of the rich are self-actualized individuals who simply must be who they are; and because they are authentic, they attract financial wealth.
There are also “rich” people who are perfectly content without money.
I believe a large portion of your readers believe rich is a mindset or lifestyle filled with meaning, purpose, contentment and inner peace. Money, material wealth and social status are not primary pursuits for the truly rich person. If the money comes, it is only a byproduct of being authentic.
Don’t you need to hire a financial philosopher type of writer?
Cheers…
Kent
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I LOVE this comment, which sumarizes (with much more eloquence) my thoughts while reading this post. I am certainly not rich, but I have enough that I don’t have to worry about paying for basic necessities. I can do and buy what I want but I usually have to plan and save to for it. I can afford to give (money AND time) to help others. I read this site to help me stretch and grow what I have. If a person is not rich or poor, and does not have the goal of becoming a millionaire, where does she fit into these lists?
I would love to read more from Kent! In fact, I am going to check out his site right now!
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I agree with Kent@theFinancialPhilosopher : I think that the idea here is that wealth is more of a state of mind. I think that part of the problem with our culture is that money is the basis of wealth, and I just don’t believe that’s true. You can have a “rich person’s” mindset with only a few dollars in your pocket (based on the hierarchy of needs, you will most likely spend those on needs, but you may be more willing to take risks, etc.).
On the other hand, having money does not necessarily give you a “rich person’s” mentality: you can want to hold on to that money with all your might because you have the same fear that poor people do.
All in all, I like the first list better, because it distinguishes based on mentality rather than net worth/income.
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I find these comments strange.
The lists, and this blog, are in fact actually about MONEY, not just mental richness or fulfillment. Money is something that a lot of people have trouble with and its hard to live a comfortable or fulfilling life without it.
I think it’s strange that no matter what is posted on this blog, a lot of people always write in to say that they don’t care about money, not really, that they’re fulfilled in their life already without having much money & etc. Which makes me wonder why they are reading this blog?
For many, having too little money, bad credit, loans they can’t pay back blights their lives. Just ask all those college grads who will be paying on their student loans forever!
It’s not all about the fulfillment you feel in your life–you need to pay attention to your money too.
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Well, I disagree; I don’t think they’re worth discussing. I think these lists are framed in insulting, dismissive ways that attribute poverty to shortcomings and wealth to being *~*AWESOME*~*, and while these authors may have some wisdom buried in them somewhere, I bet someone else has that wisdom too, and I’d rather get it from someone whose view of the world doesn’t make me queasy.
And I’ll point this out: when you said “I think Eker and Smith are talking about the rich and the poor in the U.S. Globally, the differences between the rich and the poor are myriad and complex,” it reads as a distinction, not an inclusion. To me, this statement says, “Outside of the US, these issues are complex. Not so much, here.”
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I think these lists are framed in insulting, dismissive ways that attribute poverty to shortcomings and wealth to being *~*AWESOME*~*
I think you’re hit the nail on the head, at least with T. Harv Eker. Remember that the “T” in T. Harv Eker stands for “The.” He gave himself that designation and it’s very much about being *~*AWESOME*~* and hanging out with *~*AWESOME*~* people.
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Althought I am not entirely offended by these ridiculous and specious lists, what I do find borderline disrespectful is the attempt to demonize, or in effect blame, the poor for their circumstances. If they only changed their mindset life would somehow magically become better. Sure, that’s true, but so is the axiom it takes money to make money. And it doesn’t certainly abrogate or belittle our responsibilty to those in need. We can’t just hand them a book with a list like thas and say ‘take it from here, okay?”
It’s good to see where positive thinking and hard work will get you but I know plenty who have those things and don’t have wealth. It’s a part of a successful person, but so is getting help (like loans from banks or friends/family or even govt) and having enough income to permit you to become a good risk and invest in yourself.
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Fair point, Becka. When I wrote that issues of poverty are complex outside the U.S., it was because I’d just taken a tour of Lima, Peru and my mindset was shifted. But you’re right. Even in the U.S., the issues are complex. But as an American, I have a better feel for them. And as somebody who has moved from poor to upper-middle class, I’ve seen that such class mobility is possible. (If I had a better connection, I’d research the post I made about class mobility a few years ago. If I remember right, the conclusion of the study was that mobility *is* possible, but not overly common.)
If I were to re-write the post, I would phrase things differently.
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J.D.,
Here is a link to another blog I read that recently presented some data on income mobility: http://mjperry.blogspot.com/2011/10/income-mobility-is-more-important-than.html
The data is from the Federal Reserve Bank of Minneapolis and tracks INDIVIDUALS over time to see what quintiles they are in starting in 2001 and going again in 2007. In each quintile, anywhere from 1/3 to 2/3 of the people move up or down in income in just a six year span.
So when you hear that “wages are flat” or “inequality is increasing”, it’s instructive to note that you are not absolutely referring to the same people.
Needless to say, 1/3 to 2/3 of people moving income groups (including 5% of people in the lowest group moving to the highest group in just six years!) is what I would call frequent.
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Steve S, that post attempts a positive spin on the data, largely by ignoring the data.
He argues that rising inequality and stagnant wages by quintile do not matter because people start at lower wages but over time they will leap to higher income quintiles. But his data does not back that up. Using the data in his chart I see that 50% of people stay in their original income bracket, ~24% will move up income brackets, and ~27% will go down income brackets. As a whole people are more likely to end up making less money in the future than they are to be making more money.
Here is an inflation adjusted chart of incomes starting in 1917 and going through 2008:
http://www.businessinsider.com/income-inequality-1917-2008
Income inequality is rising and wage growth for the bottom 90% is not equal to that of the top 10%. Income mobility that does not demonstrate what the blogger said it is demonstrating does nothing to solve this problem. (And inequality is a problem, there is info out there suggesting it correlates to a significant number of societal ills).
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Barnetto:
I respectfully disagree and argue that your stock rendition of the data (Business Insider link) is part of the problem, not part of the solution.
The guy in the top 1% in 1917 is not the same guy as in 2008. You don’t take the same 100,000 guys and increase all of their incomes by 275% over 91 years. Same goes for the “bottom 90%”.
What your data is telling us is that a smaller number of people are contributing a disproportionate amount of value to society than before. Which makes sense in the internet age.
Everyone needs to stop thinking of income groups as people. And equating income with wealth (some people just have 1 really good year…and then blow it all. MC Hammer anyone?)
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Perhaps I wasn’t clear.
It would be pretty amazing if the guy from 1917 was the same guy as in 2008. No, what I meant is that I would like to see the same kind of chart you linked to, which had a data set from 2001-2007, replicated many times.
For example:
1917-1922
1922-1927
1927-1932
and on until we get to the most current data. What I expect, given that social mobility decreases as income inequality increases, is that you will see there was far more social mobility in the preceding years as there are now.
Also, you did not respond to my crunching of the numbers showing that slightly more people actually move into lower income quintiles rather than higher quintiles in the set of data you provided. On its face that fact puts the lie to that bloggers claim that income stagnation doesn’t matter because people are continuing to increase their earnings throughout their lives.
Your take on income mobility, that its the individuals that matter and not the quintiles, is novel, but ultimately facile and obfuscatory. I don’t understand on what basis you deride the “stock” rendition of data.
Also, given that just about everyone (except the really poor) have the internet nowadays, shouldn’t they start seeing the same gains in productivity and be able to produce value in proportion with that seen in today’s 1%? In fact, if they were late to the internet game, then I would expect at some point to have seen a sudden increase in other quintile’s income growth as more and more people became connected.
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I agree with you, it is neccesary to look at the lists, if we want change in our lives anyway. This is the first time I have replyed to an article because I feel like I can, from experience, participate. I have been financially challenged all my life, I have done many seminars trying to get past my blocks etc…but I have discovered over the years that gratitude and being willing to face my (stuff)has been what has moved me forward. It has taken a long time and I am no where near done, if I ever will be, but I am closer than I have ever been to creating a nice level of comfort, where I can actually use my bonuses to go on vacations rather than get caught up on bills.
A classic example of gratitude that I have learned about was when my gas was shut off for about one week due to non payment. I did not have the funds to pay the bill. Rather than feel sorry for myself, I was grateful that the apartment I lived in had a gym, with a shower, that we used for a week until I recieved my paycheck and could get the gas turned back on. The rest of the apartment was electric so we could cook. This is classic of “mindset” though that is important in changing our experiences.
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Yes, all I could think of when reading this post was that I was very surprised that anyone could take it seriously.
It reminded me of the quote, “The plural of anecdote is NOT data”.
A lot of the commenters who are finding “value” in Eker’s writing don’t seem to understand that distinction.
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Not a post I would expect to see on GRS. I fear the comments.
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247 comments later…. lol.
You know, as a super-leftie socialist hippie from a poor family, I came into this list expecting to hate it. But I don’t (completely).
One of the biggest distinctions between rich and poor (or black and white) is exactly this – that the poor are not raised these assumptions. Many of these beliefs come from a place of privilege, where people have the opportunity to take risks, where richer people have something useful to teach you.
If lower-income kids were to learn some of these things and adopt them (on the rare occasions it was possible to do so), it could help them get ahead.
(PS: My father always taught me that no one comes by a fortune honestly. There is always some cheating, law-breaking, or exploitative action behind it. I still agree with him….)
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Always? In what way do does it help you or your family to cling to a sweeping generalization like this? All it does is help you maintain an irrational feeling of loathing towards money.
Money is just a tool. It can be used for good or for evil. Why presume the latter only, and thus disempower your future self from potentially using it for good?
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Imelda, I agree with you. I thought I would hate it, too, but in fact I recognized myself in a lot of the “poor mindset.” While I don’t necessarily agree with the sweeping generalization of “this is the difference between rich people and poor people,” it did cause me to question things about my mindset and draw interesting parallels that I would not have done on my own.
So thank you, JD, for both posting the lists and directing reasonable skepticism towards them both. I got a lot of value out of it.
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The attitudes expressed in the “distinctions” have issues. Too many to go into. I think we can agree that not worrying about when your next meal or doctor’s visit is going to be is a big difference.
I’d MUCH rather see a research based list of distinctions between poor people that stayed poor, and poor people who became middle class.
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The distinctions are spot on. I’ve been poor, and yet I focused on long-term returns — it hurt in the short run, but now I’m doing fantastic.
Same for my father, and plenty of others. Poor people become rich. Why? Mentality and strategy.
If this offends you, maybe we should add something else to the list:
Rich people search for politically incorrect truths; poor people stay bitter.
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Why do you say that rich people look for politically incorrect truths and poor people stay bitter? I know plenty of wealthy people who are bitter and plenty of “poor” people who experience a great deal more joy than the average person.
There is truth to the saying the rich get richer because of the political injustices that are in place, but … I refuse to let arrogant opportunists to keep me down so I may not experience wealth as well as abundance in every area in my life.
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Megan, while you are somewhat correct that the rich can remain rich by the way politics are, you must also remember that the poor very often are encouraged to remain poor by this same political system. Welfare recipients are taught to vote for the “welfare candidates”, not the “education or jobs” candidates. Once you are given *just* enough by the government to eke out a survival, you stop being encouraged to give up the welfare and look to be competent on your own anymore. (Obviously there are some cases where SOME peole wise up and get off the government welfare, for dignity or other reasons.)
I moved to a ‘poor’ town while keeping my middle-class pay job an hour away. EVERYONE near me was on welfare, food stamps, Section 8, and they couldn’t understand why I *had* to go to work every day if I could essentially get paid to stay home. I tried to explain why working and earning my own money was better, and I was constantly met with incredulity. I lived there because the cost of living was great (very inexpensive), and I still earned a decent wage from the big city. Without fail, these bottom-of-the-line income folks smoked, drank, stole, and bought lottery tickets — not only that, the always tried to borrow my money.
As for the above lists, I think they’re potentially right on. Sometimes the truth hurts, sometimes it’s harsh, and pretty little excuses as to why the rich are rich and why the poor are poor just sound less harsh. But they’re still excuses.
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Should there be just as many, more, or less people in the US who have the mentality/strategy to change their social class as there are in other developed countries such as the UK, Australia, Canada, Denmark, France, etc?
The OECD data shows that there is less social mobility in the US than in France, Denmark, Canada, and Australia but more social mobility than the UK. The US, of all developed countries, has the worst social mobility of just about any other country.
The problem of why are poor people poor is not an either/or question of mentality vs circumstances. It is both.
If we take as a given that people are as likely in our country as in any other country, given the same circumstances, to get themselves out of poverty, than we have to ask what conditions are making it such that we have less people getting out of poverty than nearly every other developed country.
I presume most of the people who can create their own positive mentalities are likely already doing so, I doubt it is helpful to the most of the poor to keep reminding them that they are lazy and stupid.
If we’re serious about reducing poverty, we need to focus on changing their situations so they can get out of poverty. Whether that is job training, child care, childhood nutrition, access to medical services, etc, it needs to be done so that people can live the American dream not just in Canada and Denmark, but in the USA.
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Perhaps the UK needs to come off that list due to changes over the last year or so that will result in many people not getting opportunities others have had.
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Now about European colonialism… well, I´m Brazilian. Things down here got pretty bad from the 60′s on, until at least the middle 90′s, due to American sponsorship to our military dictatorship. That put, Brazil is doing pretty well nowadays and consider America our ally.
There are countries, on the other hand, who resent to this day wars that were waged in the middle 1800′s, and blame others for it. Some European countries were colonies of other European countries and yet, today are an amazing nest of wealth and welfare.
Why that?
My bet is that the countries that do well don´t resent their past; they work with what they have and expose themselves to the odds of luck and destiny. That way, they assume full accountability on their future. On the other hand, most latin-american countries blame their poverty on somebody else and keep struck to their past.
My 2 cents is that this idea applies to individuals, too, at least in the Western and Middle-Eastern world. Blaming others and being stuck in the (sometimes imaginary) golden days of yore is a way to justify and embellish poverty.
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Excellent insight!
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Blaming others… Brazil didn’t go through hard times in the 60′s because of US involvement. It went through hard times because those with power wanted to maintain what they had and exclude other Brazilians. They sought and obtained some US aid to fight “communists/socialists” (or people that just wanted a more equitable system). This is very different than the US causing the problem. If you were Chilean, from about anywhere in Central American, Cuban, or to a lesser degree Argentinian I would sympathize with you more. Don’t blame the US for Brazil’s 60s.
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I’ve seen those lists before, and like you, I found them trite and oversimplistic. That said, I do believe there are indeed fundamental differences in the mindsets between rich people and poor people. Poor people, in my experience, often tend to have a “victim” mentality, believing they are powerless to improve their circumstances, so they don’t even try.
In many cases, there really are serious impediments to them making significant changes, such as being a single parent or battling addiction. But those circumstances are merely the consequences of earlier poor decisions. They could truly be stuck in a rut that can’t be escaped through a simple shift in “mentality,” but that’s only because it’s too late for them. The shift in mindset needed to happen before they had unprotected sex with a deadbeat, or before they blew off class to go smoke dope with a bunch of losers. Wanting to change now doesn’t instantly erase the negative consequences of those earlier poor decisions.
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And rich people don’t make bad live decisions? I think the difference is they’re in a better situation to handle them.
A friend of mine teaches in a private high school — you should hear her stories! Rich kids have many of the same problems that middle class and poor kids do — drinking, drugs, pregnancies, truancy, crime, etc. In middle or lower class kids, these behaviours could be life-altering because they don’t have wealth and powerful parents to fall back on.
I agree we all have to take responsibility for our decisions (good and bad), but I also think that for some people the stakes are much higher.
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This reminds me of the South Park where Cartman substitute teaches at an inner city school. One of the latina girls gets pregnant, so he tells her to get an abortion and that that’s one way white girls cheat in life and get ahead.
He basically spends the whole episode teaching minorities how to “cheat” in life like white people and not stay poor.
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Exactly, Elizabeth. This is what I mean by a “safety net”.
I’ve written before about how having an emergency fund gives us a buffer to deal with our mistakes. Now that I have more than just an emergency fund, now that I have real savings, I see that the bigger the safety net, the more risks I can take.
If I were still in debt, if I were as poor as my family was when I was a boy, I couldn’t afford to take the risk of packing up and spending six weeks in South America, for instance. (For one, I wouldn’t have even been able to afford to travel!) What if something bad happened while I was down here? Now, though, I feel comfortable in the knowledge that I can handle the financial problems that come my way.
For poor people, these problems are even more severe. They might not be able to risk quitting their second minimum-wage job to take night classes. They might not be able to risk moving to a nicer neighborhood to put their kids in better schools. Wealth brings opportunity. That’s a reason to strive for wealth, it’s true, but it’s also a reason to look at lists like these and say, “WTF?”
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Right – this list completely ignores the marginal value of money. For example – the rich and the poor both occasionally make mistakes while driving and get a speeding ticket or red light ticket. We’re human, it happens. For the rich person, a $100 ticket is miniscule in proportion to their wealth – they may even have that much in their wallet that they can pay without blinking. For the poor person, it represents a day’s worth of wages and maybe the difference between seeing a doctor or not, or paying the electric bill or not, etc.
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Elizabeth – you’re missing Kevin’s point. He is saying that these decisions were made *before* these folks were rich or stuck in a bad situation.
I can only speak anecdotally, but I came from a poor family. Both of my parents were drug addicts, though my mother was high-functioning enough to hold down a steady (low-paying) job. My sister and I saw the life they led and wanted nothing to do with it, so we never touched drugs or alcohol and refused to have sex before marriage (to avoid pregnancy and disease, not for moral reasons). We both worked our own way through college, she is now a dental hygienist and I am a programmer. We are not rich, but I would say we are solidly middle-class. At the same time, I see many of my old high school friends (some from more affluent families) who chose to do drugs or have kids young, and they assume I was just lucky and that life was conspiring against them. I was lucky to be born in America, but I also made good decisions which lead to positive consequences. Life isn’t conspiring against them, they are experiencing consequences of the decisions they made earlier in life.
I didn’t have a safety net, I just made normal socially-acceptable good decisions (no drugs or babies, go to college in a good-paying field, live like a college student as long as you can stand it).
It goes without saying, but some poor people have extenuating circumstances in the same way that some obese people have medical reasons for their condition. From my own personal experience, that doesn’t appear to be the majority.
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I think you and I interpreted his comment differently
I can see your point, though. Sometimes it takes a life-changing mistake to prompt people to change — it could be someone’s direct choice or their parents.
I think people can change their mindset anytime, and “rich” people can see themselves as victims too.
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You also have to be smart enough to become the progammer and the dental technicianand not everyone is that smart. I am a nurse. I was the good girl who made all the right decisions. But several of my coworkers were the bad girls- not drug addicts, but unwed mothers who supported their kids doing minimal wage jobs. They eventually got a clue and pulled themselves up because they were SMART bad girls. We do not all have the same abilities. Family background and good decisions help but I think ability is the most important factor.
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@SKP — I agree with you there! I’ve taught remedial level courses and know that some people just aren’t capable of being innovators or leaders. You can put kids in a classroom and they can work very hard, but sometimes things just don’t “click”. Not everyone can be a doctor, lawyer, executive, etc. even if they have all the financial advantages, the support of friends and family and the right mindset.
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I remember reading Eker’s list years ago and thinking they were an over-simplification of the difference between rich and poor. However, there are most certainly some tenets hidden within that serve as useful ways to think about life and frame existence.
Kudos to you for re-visiting this during controversial times.
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My initial reaction to your question, although itself facile is this:
The difference between the rich and the poor is that the rich have more money.
Full stop. I think you can find people with the positive and negative traits on those lists who are rich AND who are poor. Yes, I am oversimplifying the question, but it’s because I perhaps choose not to engage with a question that invariably will kick a bunch of people when they are already down.
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lol! That was my initial thought too!
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This comment is most excellent. Thank you for making it.
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Obviously the lists are simplified, as has been acknowledged. But the responses to them actually serve as pretty great examples of how the lists hold some truth.
Some people read them and feel attacked or victimized. They get defensive and resistant to any wisdom at all the lists may hold.
Some people see the lists as a possible learning tool and seriously consider what they have to offer.
Of those two mindsets, which is most likely to make one successful?
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Some people are insulted by these lists and are doing quite well for themselves.
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Right on.
I’m so surprised to read people taking these lists as personal attacks. It seems to reinforce Eker’s first point — poor people think “life happens to me”.
I thought of his list as describing personality traits — you know like “introvert” or “extrovert.” I think a person can have natural tendencies one way or the other, but if the person wants to make a change it’s good to know how to do so.
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That was my first thought as well. I agree with you completely.
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No, it’s way more than that. How many stories have we read about lottery winners who suddenly have $20M, and 3 years later; nothing?
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To me, these lists are typical of any self-help literature. You could substitute “thin and fat” or “well-liked and unliked” or “organized and unorganized” into these lists and they would work equally well. It’s just the same old self-help rhetoric.
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I am reading Eker right now. This is my second time to read him. I think that there is a lot of truth in what he says. I do note that Eker is very clear at the begining of the book to say he is going to exagerate the differnce between the rich and poor so to make his examples clearer.
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Which is basically a way of saying he’s going to lie in order to make his points.
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I think one point is being missed. Ekers book is THINKING like a rich person and not a poor person. This book is similar to the Millionaire Next Door book that also has the core principal of teaching people to think differently
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That’s completely illogical. If the values don’t actually match the person they’re being attached to on both sides, then it’s meaningless to say ‘this is how the rich think’
It’s the equivalent of saying ‘rich people wear green’
Some do, some don’t. And some who aren’t rich wear green. And wearing green doesn’t make you rich. And that’s just as accurate as their official list.
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I went to one of those day-long “feel-good” seminars once and T Harv Ecker was one of the speakers. It was the tackiest presentation ever. He enumerated that list of his and at the end of every point he would ask the crowd: Am I right or am I right?
Then, near the end, he started plugging his book. He said that there was a coupon inside for a free seminar on how to get rich quickly that he and others were hosting somewhere around my city. He said the coupon was only inside the books being sold at this seminar. So before his talk ended there were droves of people running to the book stands outside in the hallway (including one of my friends). They were like flies to a cadaver it was really funny.
Of course, when I saw the book a few months later at the bookstore there was the same coupon in it, at the end, which you could tear out and bring to the seminar.
It would seem that one of the ways to become rich, which Eker doesn’t really talk about is to convince a bunch of gullible people to buy your book. My friend certainly isn’t rich, in fact, her situation is worse than it was before buying his book but does she sure have a winning millionaire mind now woo hoo!
And yeah, what Becka said: the relationship between poverty and wealth is complex.
What the heck is an empowering question anyway?
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“What the heck is an empowering question anyway?”
I was wondering that, too.
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Well, this post will certain generate an interesting discussion! Especially since my guess would be that most of us reading this are not rich.
Perhaps these lists are remnants of the American Dream? We’d all love to believe that rags-to-riches is possible if you just believe in yourself and work hard enough. It’s a nice ideal, but I agree with J.D. and other commenters that these issues are very complex and can’t be distilled into nice little lists.
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In regards to luck, that is part of becoming rich, but that isn’t everything. I heard the saying recently “the harder I work, the luckier I get.” I think that is one of the main ideas both authors are trying to get across with those points.
Also, check out this article by Jim Collins about Bill Gates, which talks about Gates’ “luck.”
http://www.nytimes.com/2011/10/30/business/luck-is-just-the-spark-for-business-giants.html?_r=1&pagewanted=all
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Rob, you’re right. There’s no question that hard work can separate one person from another if there’s a level playing field. And I don’t mean to downplay that. I’ve seen this over and over and over again in my life. Those that work hardest make the most happen.
That said, there are times when hard work isn’t enough because they playing field isn’t level.
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“That said, there are times when hard work isn’t enough because they playing field isn’t level.” And despite what the media tries to portray, I believe THIS is the crux of the Occupy Wall Street movement.
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Are we distinguishing between “self-made” rich people and those who have inherited wealth? Because I don’t see what hard work and a can-do mindset really has to do with possessing riches in the case of the second group.
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Do check out the article on Gates. Take the simple question asked in the article – How many kids were in their basements playing with computers who didn’t become Bill Gates? The answer is quite a few, although Collins seems to assume the opposite.
The real question is how many of those kids, having sent a letter to a company in Arizona offering to sell them a product they didn’t have (a BASIC programming language) would have received a positive response. The answer, of course, is not many. One can imagine that it helped a lot that Gates was a student at Harvard with Harvard professors to vouch for him.
The larger problem with Collins is that he apparently either didn’t take or failed basic logic in college. He comes to “Taxi’s are yellow cars, that’s a yellow car, therefore it must be a taxi” conclusions. Or, put another way, the fact that you can’t win the lottery without buying a ticket, doesn’t mean you don’t have to be lucky to win the lottery.
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With both these books, these questions come to my mind.
Both are more or less positioned as truths (but immediatly disclaimed by saying: my personal experience).
They list differences between poor and rich.
1. they are not scientificly researched facts (objective, repeatable) And i promise they wont hold up if you were to do a study of them. They are mere intuitions of the writer from the interactions in his life, he claims.
2. For these differences to be ususefull at all in your life: wich of these (if they hold up to hard facts at all) are mere correlations (rich people play golf), and wich are causal ( some smart rich people invested in apple stock in 90′s and got richer).
3. The facts are really really too generic to be of any help at all…eg i create my life…
which brings me to the conclusion, the only person that gets rich from these books…are the writers, publishers and workshops hosts, bloggers who get paid directly or indirectly to blog about the books and workshops.
My 2 cents.
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Instead of picking on the whole list I’ll just pick one:
“Millionaires believe they must be generous.”
I actually find that the opposite of this is true. Rich people don’t get rich by giving their money away.
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Well, if you believe Dave Ramsey, 2/3 of all charitable giving comes from the top 1%. I don’t know what his source is, but he’s cited this statistic repeatedly in his derision of the Occupy Wall Street crowd.
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Actually, most charitable giving goes to churches. My guess is that claim about charitable giving by the “top 1%” is based on a wild guess or careful/careless number crunching to prove a point. Given the context of its use, I would bet on the latter.
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I’ll wait for the reference. It wouldn’t be the first time Dave Ramsey has cited a completely made-up statistic…
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Well, so what if the top 1% gives the most money to charity?
Newsflash: They give the most money to charity, because they have the most money to give!
It’s the same argument about taxes. OF COURSE the wealthiest pay the most in taxes. It’s because in last few decades they have made insane amounts of money.
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Sure, but fully half of US citizens pay no net federal income tax at all. And yet they keep calling on the “rich” to pay their “fair share.” If the so-called “rich” are the only ones paying taxes, how is it “fair” to ask them to pay MORE
Or, to put it another way, how “fair” is it that half the people in the US don’t pay any net federal income tax at all?
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Kevin – most of the people that don’t pay federal income taxes don’t have any taxable income after they subtract the standard deduction and personal exemptions. The same standard deduction and personal exemptions that everyone else gets. Why do you think it’s fair that only the middle class and wealthy should get to exempt the first $26K or so (for a family of four) from taxes, while the poor shouldn’t be able to exempt the same amount from taxes simply because they don’t make enough money to have any left over to tax?
Everyone gets the same benefit – exempting the first $X amount of their income from taxes. That’s basically the textbook definition of “fair.”
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About as ‘fair’ as calling corporations ‘individuals’ and then not having THEM pay their taxes.
http://www.reuters.com/article/2008/08/12/us-usa-taxes-corporations-idUSN1249465620080812
About as ‘fair’ as the rich using accountants and tax lawyers to help get them out of paying their taxes.
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Kevin
- And that ‘do not pay federal income tax’ includes people who are unemployed and not paying taxes now – although they were before and will again when they have a job.
- It also includes those on Social Security who paid taxes throughout their life.
It’s a ridiculous talking point designed to spread misinformation and resentment. Plus, while you had the grace to specify federal income tax (which many people don’t) those people ARE paying taxes and are paying for government services through those taxes. (The number of people who don’t realize that payroll taxes, for example, are excluded from ‘federal income tax’ is astonishing)
When you actually look at the people who are covered in that ‘half’ – that is when it becomes fair.
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Federal income tax is but one of a myriad of taxes and fees imposed by various government agencies. If you look at all the taxes and fees in toto paid by the poor in comparison to the rich, you get a much different statistic. Politicians on both sides tend to pick the statistics that fit their argument rather than vice versa. Pity.
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The real problem with the claims about the 53% of “people” who pays taxes is that they aren’t true, even if you limit it to federal income tax.
The actual comparison is of “tax units”, not “people”. So a married couple who file a joint return is one “tax unit” and their kids who file to get the taxes back from their summer jobs are each separate “tax units”.
This is just one of those media “factoids” that is repeated over and over until people believe it. The reality is too complicated a story for the media to make interesting.
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Maybe the wealthy donate more dollars, but in terms of a percentage of income, the most generous Americans are those who earn between $5000 and $30,000 per year. (That’s from the Bureau of Labor Statistics Consumer Expenditure Survey from 2005.)
I think these lists show the authors’ contempt for the poor and their desire to believe the poor deserve to be poor and for that reason THEY’ll never be poor.
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According to the Chronicle of Philanthropy, congregations with the lowest per capita income (the Church of God)give a greater percentage of their income than congregations with the highest per capita income (Epicopalians).
Wealthy people may give a lot of money but it’s not usually a meaningful percentage of their net wealth. Whereas middle class and poor people who “tithe” are giving 10% of their income to their church.
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Dave Ramsey is a huge anti-OWS person. A statistic like that, I cannot help but believe there is some bias built within it. For alls I know that may be true, but I would expect as much since the top 1% have much of the wealth in this nation. A $1000 donation might be .0001% of their wealth, while for the other 99%, $1000 might be 2% of thier wealth. So who really pays more?
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Here is a study that breaks down charity giving versus income levels.
Patterns of Household Charitable Giving
by Income Group, 2005
The top 2% of households by income levels give about 56% of the charity donations. This would contradict Ramsey’s claim.
Also keep in mind that the top 1% controls 36% of the wealth in the nation. So OF COURSE they will give far more than poor and middle class people.
Here’s another source that compares the giving as a % of income:
http://www.nytimes.com/2010/08/22/magazine/22FOB-wwln-t.html
“In 2001, Independent Sector, a nonprofit organization focused on charitable giving, found that households earning less than $25,000 a year gave away an average of 4.2 percent of their incomes; those with earnings of more than $75,000 gave away 2.7 percent.”
I wonder what would happen if you removed large donations from Gates and Buffett from the equation? I’m sure their mult-billion dollar foundations skew it upwards.
There are certainly many generous rich people and many generous poor people. Rich people can afford to give far more in dollars than poor people and they do so. Many poor people give a higher percent of their wealth since a “little bit” of a “not much” is a lot.
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I can’t believe the attitude I’m seeing in some of these comments. “Of course the rich give more to charity – they’ve got so much more money than the rest of us!”
What an ungrateful attitude. The rich don’t have to give anything! They could just keep all their money if they wanted. They don’t give it away for the tax breaks (the break is always less than if they’d just kept the money and paid tax on it), they don’t do it for publicity – they do it because believe it or not, they’re good, altruistic people and they believe it’s the right thing to do.
Sometimes it seems that some of the 99% are so clouded with jealousy and envy, that they’d find something wrong with anything a big, bad “rich” person did. “He only donated that kidney for the tax break!”
Unbelievable.
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Kevin, its the math.
The average income of the bottom 90% (using this source I found in a quick google search: http://www.wealthandwant.com/issues/income/income_distribution.html) is $30374. Giving 10% of their income is $3037. The top 10% have an average income of $269,658. To give away $3037 dollars the average top 10%-er only has to give away 1.1% of his/her salary.
This reminds me of the story of the Widow’s Mite.
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barnetto:
That’s meaningless mathematics. By definition, there are 9 times more 90%-ers than 10%-ers. So of course, all things being equal, the 10% contributions of 9 90%-ers will equal a single 1.1% contribution from a 10%-er. So what?
If that meant anything, then the donations would be equally distributed across income levels, since there are so many more 90%-ers than rich 10%-ers. And yet, the vast majority of all donations comes from the relatively few 1% richest people, even though they’re outnumbered 99-to-1.
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Kevin,
That’s not how math works. You’re ignoring income distribution, which is essential to the whole point.
And you also apparently think that 1.1% is greater generosity than 10%, which is just weird.
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Kevin, how are you counting when you say that the vast majority of all donations come from the wealthy?
1) Counting absolute dollars
2) Comparing percentages
3) Comparing the # of different organizations contributed to
4) ???
If you’re using #1, then yes, no one is disagreeing with you. The wealthy give more dollars because the wealthy have more dollars. Let’s say our high earners give away 10% of their salary (which in real life someone already said they don’t, they give closer to 2%). That would be $29,000 out of their ~$290,000 average salary. The average person outside of the top 10% would have to give away 94% of the salary to equal that.
They would have $2000 remaining to spend on food, shelter, and other living expenses. The average 10%er would have $261,000 remaining to spend on their living expenses.
Now, backtracking, you said (without any citation to back it up) that Ramsey says 2/3 of charitable contributions come from the top 1% to try and prove a claim that the rich are generous (a claim from one of the lists). Another contributor found the actual statistic which is that the top 2% contribute 56% of all charitable giving (and that the top 1% hold 36% of the wealth). Furthermore, that contributor provided statistics that as a percentage of income, lower income people give away a larger percentage of their income than the rich do. You responded by ignoring the numbers and throwing a tantrum about how everyone hates the rich (not true, otherwise why would we all be here trying to get rich slowly?), but we won’t dwell on that.
So maybe we can say rich people on average are generous, but poor people on average are twice as generous.
I’m sorry math isn’t your strong suit, but its not meaningless.
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I must reply to this. Not all wealthy people are selfish. My dad owns a small company that has been very profitable. He hasn’t taken a salary since 2007 because he doesn’t want to lay anyone off. He bought him and my mother private insurance policies so the company wouldn’t have to cover them both anymore. He also covers part of the company’s share of the medical insurance premium so his employees’ will not have additional expenses. His employees have no idea he’s doing this. Those are only a few examples.
No one makes him do this. No one makes him give up considerable personal money to do these things.
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Your parents are living off of your mother’s income from a different company or are they living off of their savings?
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Lauraelle – I also question how your parents are making money. Not to be super snarky, but perhaps instead of taking taxable income, your father writes off all of his expenses as “business expenses” all the while keeping his stated salary at zero?
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Any one can come up with a clicky do good think good list, I personally don’t beleive in them having mind and always looking for opportunities is a good mind set to have, but also realizing if something does not work out that is OK to and you learned from it and move on.
I have to agree we have a business also and we pay ourselves less than our workers. I wish we could offer our workers more than what we are currently however, right now we can not. In the future I would like to as our business progresses and more things are paid for and established. I work full-time outside of the business and we put in long hours. On the flip side I get paid NOTHING for my time that I spend in the business doing the accounting. We have put in long hours that we have not been paid for in years with hope that someday it will be fully supportive of us and our employees. As a business owner I resent the biased claims from others who have never owned a business or tried to own a business claim about all of the “benefits” that a business owner receives. For every employee we hire there is social security, medicare, workmans comp, unemployment taxes, corporate tax ect… We will never be compensated for the long hours and time we put in for no pay.
The government should be trying to make and put forth policies that make the people self supportive and not reliant on the government, not push them to look to the government to provide for them.
On the flip side the politicians have been bought and paid for by special interest no matter what side of the fence they are on and until that changes the more will stay the same.
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I completely agree too. And coming from somebody who grew up in a very poor community, the poor often helped each other in time and labor (which is never counted in such studies). If a elderly neighbor’s roof leaked, we pitched in and fixed it, using supplies we bought and our own labor. If somebody needed another to watch kids, we were there for each other.
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Well it is true in life you need to take action and change the status . Usually this is better than just maintaining it especially if you are poor.
I liked the quote about calculated risk.
How it applies to me:
I for one hate debt(became debt free this year in February) but I am renting. So would buying a house (with a modest 20 year mortgage) help ? I think it will.
With aggressive snowballing I might pay it back in 10 years (rent and payment are very close and I have a small down payment).
The risks are : losing job and health but I am not protected as I am paying rent either…
Being smart is more complex than these rules .. so the difference I say is being financially smart (which is not equal to normal smart) and a bit lucky.
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That the lists are facile is a given – the issues of rich/poor cannot be reduced to a list.
However, if we look at the lists and recognize some change that we could make to our own mindset that could improve our circumstances – then they have served their purpose.
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Rich is a mindset. Decide to live a healthy life, stay out of debt, and opt to not have children and you can work a part-time job to support yourself. If you want children, if you want a house that’s bigger than you really need, if you want a consumerist life, you’re going to pay for it with a harder working life. Sure, “luck” could be responsible for you getting into some accident or getting a terminal disease, but the same “luck” could also have you stumbling upon a million dollar lottery ticket on the ground. It’s not constructive to worry about luck.
The wealthiest (financially) people I know, multimillionaires, work their asses off and their lives are full of stress. I want to be financially comfortable but in no way do I want to be like these people. They work 24/7 and take their laptops with them on vacation. I can’t ever see them retiring fully because work is their life. There are a few wealthy people I know who are exceptions, who seem to have realized they have “enough,” and have slowed. But the majority appear overworked and anxious. That is not the life for me.
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Sorry, Dink, but magical thinking never has and never will work. “Decide to live a healthy lifestyle” will not automatically make you stay healthy. Autoimmune diseases, cancer, heart disease, arthritis — every disease strikes everyone regardless of lifestyle. We actually have no clue what constitutes a “healthy diet” because the studies are all association studies, and they ignore factors that influence both the food eaten and the “results.” For instance, you prepare a healthy salad and someone else gets fast food? Congratulations — you have the energy to prepare the “healthy” salad; someone else might have early cancer, or autoimmune disease, or something else that sucks their energy, and they get the fast food because spending the energy to make that salad means they won’t have the energy to talk to their kids before bed.
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um, WTF?
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What an odd post. Of course Mindset matters. There are real differences between the thoughts and actions of the rich and poor. This website was supposed to focus on that very concept, right?
“Get Rich Slowly” is the opposite of the Mindset that you should get rich quick. Maybe you should disagree with a few of the specific points of distinction between those who have made their success and those who don’t, but to chalk it up to luck is ridiculous.
Good Mindset drives good choices that lead to good results.
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Let’s see if I can be as trite and ignorant as this list…
Rich people believe: “I create my life.” Poor people believe: “Life happens to me.” – Because they can afford to
Rich people play the money game to win. Poor people play the money game to not lose. – Because they can afford to
Rich people are committed to being rich. Poor people want to be rich.
Rich people think big. Poor people think small. – Because they can afford to
Rich people focus on opportunities. Poor people focus on obstacles. – Because they can afford to
See how easy it is!
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Sure. But, maybe, only after they worked hard to get to the point of being rich. This article is about mindset and the way one views situations.
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As I was reading the post, I did not think in terms of money. If you did not like the post, you may find a greater perspective if you do the same…
Try thinking of “rich” as someone who has a healthy perspective on life — a self-actualized person, able to lead a life of meaning and purpose.
Now replace the meaning of “poor” with those who have an unhealthy perspective on life — those who look outward for redemption and value things higher than inner peace and contentment.
With that said, there are many people who are financially wealthy but are “poor” human beings. There are also many people that are not financially wealthy but I would call “rich.”
When we stop categorizing people by their relative level of monetary, material and social status, we are enabled to arrive at the true meaning of “rich” or “poor.”
“The liar uses the valid designations, the words, to make the unreal appear as real; he says, for example, ‘I am rich,’ when the word ‘poor’ would be the correct designation of his situation.” ~ Friedrich Nietzsche
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Having been poor in my life – these statements are oversimplisic and glib. I almost lost respect for you for posting these demeaning “collective” statements and buying into groupthink.
I’m sure you already know this but poverty is more complex than the way people “think.”
Half of success is being optimistic. The other half is up to you.
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On one hand, I agree with you and many of the posters that the lists are ludicrously reductive. These are written to sell as many books as possible, they’re not academic dissertations. Look at most glossy magazines: readers love lists.
On the other hand, there’s some truth behind most of these tenets. And they can be true whether or not the affluent or disadvantaged people are truly responsible or simply lucky for their individual situations.
JD, I’m glad you looked at this with a critical eye, but I’m surprised that your post seems to dismiss so much of it outright. Three years ago, you would have been embracing these philosophies almost wholeheartedly. At the very least, you would have offered an alternative philosophy about the mindset for increased prosperity.
Now your whole post essentially just says “Yeah, I don’t know about these lists. A lot just comes down to luck. What do you think?”
As a long-term reader of this site, to me it seems that you and your writers have an ever-diminishing desire to actually “get rich”–not slowly, not at all.
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I believe that a lot of people have found out during this recession that it takes a lot more than the right attitude and mindset when it comes to building wealth and a secure financial future. I think a lot of people have had to eat some humble pie and had a radical shift in their views of particular things. Of course, I wish it had never happened, that should go without saying.
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Having gone to what a lot of people consider to be the Mecca of WASPs for boarding school, I feel like I can comment with confidence on this post
It is funny reading this how many of the “millionaire” values we were taught on a daily basis. “To Whom Much is Given, Much is Expected” was practically engraved on everything. I came from an upper middle class family that had made good, and it really does change your perspective when every day someone tells you “one day you will be a leader in this country (obviously,or why would you be in school here?), so you have certain expectations and obligations normal people don’t”. It is that feeling of a presumption of greatness that really characterizes the children of millionaires.
this can be good and bad- good in that they often have complete confidence in their abilities and work very hard to meet the ridiculously high expectations of those around them. they are surrounded by high achievers who also feel pressure to succeed. 38% of my class went to Ivies, another 30% went to a top 10 US News and World Report college- failure was uncool unless you wanted to be an artist and travel and Vietnam for a year. It’s also good in that you are not pressured to fit an easy mold- they encourage eccentricity and individual passion. It also allows some freedom from the consumer culture of the middle class. We often joked that you could tell the wealthiest millionaire at parent’s weekend because he had the oldest car in the driveway. When you are THAT rich, there is no shame (even snobbiness really..) in looking poor. We almost never bought new clothes- cords, sweaters, and a puffy jacket was enough. The multimillionaire’s daughter down the hall from me bought all her coats at Salvation Army because it was the thing to do. Wealth, at that level, can be read from your language, culture, where you travel and who you associate with- clothes, cars, etc. are meaningless. It is very difficult for a middle class kid to ever overcome that social barrier.
On the bad side- kids can get the message that they will be great no matter what (sadly, for some of them this was true). This gives them an ennui, or boredom with life in general sometimes. They can also be very entitled and expect certain things without working for them. I think that’s the major advantage of the poor middle class- they can have a hunger for success and money that the wealthiest children just can’t have or understand. I have seen many brilliant middle class kids who did have this hunger combined with a great work ethic who will certainly be much more successful than my classmates. They often will, however, (sadly to me) ask themselves “Have I arrived yet? Am I successful yet?” constantly in a way that leads them to fill that insecurity with things- cars, houses, wives, etc. This only further divides them from the super rich- socially and on the bottom line. The wealthiest never ask themselves this- they were born knowing they were destined for success and never doubt that they belong where they are. Someone once told me that that was the one characteristic that set people from my school apart in interviews. We are always at ease whether we are talking to the President of France or the lawnmower. It can be a huge advantage. It frustrates me every day when I have to talk to some of the very poor people I work with- they often lack that innate sense of possibility. Their minds of often much smaller than their circumstances and it creates a self perpetuating prison of poverty. Things happen to them, they don’t make things happen.
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“…some of the very poor people I work with- they often lack that innate sense of possibility.”
And that to me sums up perfectly the difference between the financially wealthy and the financially poor. The debate is really over what causes or prevents that innate sense of possibility, and that answer is complex. Some of it IS circumstance, background, handicaps or privileges, intelligence, etc. and some of it really is ability, drive, willingness to learn, delaying gratification, etc. Unfortunately there’s no easy dividing line, hence this debate.
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GUEST. POST. please.
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I find this post inapppropriate for this blog.It sounds like someone said “JD you haven’t had any really good knock downs on your blog lately, and I think you need to come up with one”. I actaully find it insulting as well. I suspect you did not mean it to be.
that said, I agree with Jane (I think it was). The rich are different because they have money, and because of that money, they get treated differently. On a regular basis, all the time. IN almost all walks of life. Even if they choose to live like the middle class. Untill we stop treating the rich in one way, and those who might have a chance to be rich someday another way, nothing much will change.
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A look behind the scenes at Get Rich Slowly!
I actually wrote this post in late August or early September. I’ve sat on it ever since precisely because I thought it might be too inflammatory. But I keep thinking about this subject, and I think it’s worthy of discussion. What’s more, I think it’s possible to discuss the differences without fighting. We’ve had many great conversations at GRS about controversial topics, and I’m not sure why we can’t do the same here.
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You’re right, of course. We just all have so many opinions! And it hurts to think that all the negatives in the second column (the non-wealthy, non-millionaire traits) are supposed to be describing us! We may not BE wealthy yet, but that doesn’t mean we can’t have the same attitudes as people who are.
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I think we can, some of us just have to get past the shame of our situations, most people aren’t even aware of it. Whether or not we are rich or poor or somewhere in between, there is a great deal of differences of how people live within and outside of our communities. It is hard to see homeless people walking around begging. It is hard to not be able to “fix” the issues surrounding homelessness.
However the more we talk about it the more we learn from one another, and out of that comes solution, at least sometimes that happens. I am glad you posted this article, I have so appreciated everyone’s perspective. It is really nice to read from people who really care about the distinctions of our country, and… I hope that the people who were offended from this article can heal so working “talking” together can actually bring some clarity for people to learn from, rather than ” be right”.
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Okay, then I’ll gently suggest you have poor timing at a minumum. When you’ve got a presidential candidate who says that everyone who is uneemployed are failures and people cheer, that frankly implies some truly warped and unrealistic attitudes. Grown men who used to be upper middle management don’t work at McDonalds because they think poor. Leaving chronic poverty aside for the moment, ten percent of americans do not have any work at all. You’re poor because you want to be (or becaue you don’t know any better) is a pretty sad mantra in my book.
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“Good Mindset drives good choices that lead to good results.”
I don’t think that is really true. The one thing that distinguishes the rich, beyond luck, is that they often focus on making money as a purpose in life, rather than a means to an end.
Most people want more money in to spend it. Its not money that they want, its what money can buy. With that mindset, you don’t choose your friends based on how they can help you make money. You don’t choose a job or do a job based solely on how much money you will make.
One other thing that characterizes many of the nouveau-rich, as these lists demonstrate, is being self-centered and self-righteous. They really believe they are “deserving” of whatever money they get, regardless of what they did to get it. Just take a look at the investment bankers who created the financial collapse.
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I’ll be honest, I braced myself, because I’ve seen a lot of “rich people just work harder and poor people are lazy” rhetoric flung around certain PF blogs a few years ago. I’ve been financially comfortable, I’ve been broke, and I’ve been everywhere in between. My mindset has always been the same. So like you, J.D., I’m giving these differences these books list the side-eye.
I don’t resent people who have more than me; I think that’s great that they’re doing so well. I resent the assumption that if you’re in a tough spot, or if you’re actually poor, many people assume that you’re lazy or not trying hard enough or always making bad choices. And that if you are rich, it means that you automatically work hard or you make fantastic choices (oh, hello safety net of money! You cushion a fall from the consequences of crappy choices), etc. I’ve made good calls and bad calls while I was making (and had saved up a lot of ) money (though I was never rich), and when I wasn’t making as much and had very little in savings (though I can’t call myself at any time in my life poor). The difference was, a fully-funded-and-then some-emergency fund (plus a hefty paycheck) goes a long way in cushioning the blow from the bad calls. And that a fully-funded emergency fund will pretty much be gone after a catastrophic event, and if you’re now working a much lower paying job, you’re going to have a heck of a time catching up.
I hope that in these conversations we could show empathy for people who are in tougher spots than we are, skepticism towards sweeping statements about people’s characters, and encouragement and support to people who are trying to change their circumstances. No matter what our individuals views on economics may be.
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I really don’t like those lists without a lot of explaination behind each point, otherwise they do appear trite and somewhat insulting as others have pointed out. I could take each of these points and express how a poor person could have the “rich” mindset but not be in a position to execute it.
I also think a big difference is support to be thinking rich. In the neighborhood I grew up in (lower blue collar) the parents weren’t highly educated, many had a distrustful view of education beyond high school, and they often griped about their jobs, bosses, and lives. If you were considered a smart kid (i.e. me), any time you made a mistake or something you did didn’t work right, you caught immediate grief from peers and neighbors, as well as having it brought up repeatedly for laughs months out. Lots of tearing you down to keep you from standing out. You grow up around that, and your mindset isn’t necessarily one to encourage “rich” thinking. You’re allowed to be clever, but not allowed to strive too far or you’re putting on airs. A friend who opened a pizza business in a poor area put it this way. “they would rather spend a day a week making slugs that will fool a vending machine and bragging about scoring five to ten bucks worth of junk food or two packs of cigarettes, than spend that same amount of time studying for a trade, or school, or inventing something worthwhile. Because they couldn’t brag about that, and people would tear them down for trying.”
It can be hard to get out from that, to change your mindset. Even now I can’t talk investment issues with my siblings or parent, not because they aren’t as smart as I am, but because they don’t have the mindset that investing is something they can really do.
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I recently read Rich Dad, Poor Dad by Robert Kiyosaki. It’s about the mindsets and lessons he learned from his biological dad (Phd, but couldn’t get ahead) and his best friend’s dad who didn’t graduate, but became one of the richest men on Hawaii. I’ve started reading another of his books, Cash Flow Quadrant. If you want to change your life, I would suggest you read his books. While I haven’t read Eker’s book, through other books I’ve read and classes I’ve taken, I have started changing the way I think. I am doing half of Eker’s list already. The start for me was just being willing to learn. If you think you know everything, you will not seek out new things to learn.
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Actually if you do any research you will find his biographical accounts, including of his father, are fabricated. Kiyosaki rubs me the wrong way because he is very comfortable passing off fables as real events or people. Although he may give a refreshing and perhaps optimistic (and hence inspiring) perspective of becoming successful, the more you read of him the more you realize he doesn’t really give actionable advice you how to get there yourself (unless your route is to write best selling self-help books).
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He initially marketed it through some multi-level marketing scam and those sleazy seminars, too.
Seeing his name on an endorsement for a personal finance book is enough to put me off the book and its author; I think I saw Kiyosaki’s name on a book written by Jean Chatzky. I’m getting so I truly don’t know who to read for credible PF advice.
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That book was a lie. http://www.johntreed.com/Kiyosaki.html
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I’m reluctant to trust the word of someone who bashes one book and suggests his own as a better alternative.
I always though Rich Dad/Poor Dad was a metaphor and not to be taken literally.
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This is fine if all you want to do is amass wealth: You can stick this up in your office and practice those traits.
I prefer to substitute the word “visionaries” or “people with purpose” because, as Dink said, my end goal isn’t wealth at all. Yet, I want to live a life of vision and purpose, and I imagine such people think long term, are lifelong learners, act in spite of fear… and as others here have said, it’s not about the money in the bank, it’s the mindset. The money is just a tool–a “means of exchange” to get us where we are going, as my greatuncle used to say.
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As I read this I understand why I am not one of the rich people.
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There are so many things wrong with this, I don’t even know where to start.
For one thing, correlation does not imply causation. People get rich because they have a certain attitude, or they have that attitude because they’re rich?
Second, what correlation? These statements are based on what?
Third, the authors conflate “rich” with “successful.” Are we to suppose that a multi-millionaire who loses half of his/her wealth through poor choices (and is still a millionaire) has better attitudes than someone who came from abject poverty and built a reasonable life for themselves?
This article reads like a sermon, or a sales pitch.
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It’s interesting how all of Eker’s points could just as well refer to self-confidence and high self worth rather than wealth in terms of money. I like that these types of laws are fundamentally universal.
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Yes, many of you are right that this is not ordinary GRS post, but I like it very much. Many of the comments seem like denying that the mindset plays enormous role in getting rich. Even to get rich slowly you have to develop specific mindset.
I would say that both lists are true, but these characteristics are not exclusive. I wanted to say that it does not mean that everybody who, for example, acts in spite of fear or think big, will be rich. That was the authors comment about the faults of the second list, so I am just pointing that you can look at the first list the same way.
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I actually really liked this article.
I think the interesting thing about it is not to look at it and say “Rich people are this” and “Poor people are that,” and if you DO read the article that way I can see why people may view it as offensive, but to look at the qualities and realize which of those you may see in yourself that contribute and detract from your own wealth.
For example, I sometimes find I am too risk-adverse. That is something that limits my ability to gain wealth and it is something I want to improve in myself. Conversely, I do see in others the extreme focus on a bigger paycheck. They will never obtain wealth because their lifestyle expands with their paycheck.
I hope other readers can find that side of the article.
Great post. It made me really think! Thanks JD!
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I agree with you Tina.
It is natural to take offense when somebody “calls you out” so to speak. But some open-minded personal reflection leads me to certain conclusions: that while I am young and our household income is solidly upper-middle class, I will always be a slave to wages since I cannot mentally deal with an uneven cash flow. I enjoy my downtime, hobbies, and passive entertainment (TV, internet) too much to dedicate extra time outside of my 40-hour workweek to finding multiple streams of income (side job, blogging, freelance work, etc.) I am OK with that, and I don’t begrudge materially wealthy people the fruits of their labor.
My wife works in community mental health, and even she laments that the overwhelming mindset in her clients is one of victimhood and dependency. Some (most? but not all…) are focused on gaming the system, trying to get more medication, more benefits, instead of seeing a life where help isn’t necessary as something to strive for.
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Steve,
As a health care professional, I think your comments regarding mental health clients are inappropriate, demeaning and demonstrates a complete lack of understanding and respect for the complex mental health issues that many people face. Your comment “instead of seeing a life where help isn’t necessary” strikes me as condescending and is akin to blaming the sick for being sick. The root cause of their victimization and dependence is often tied to: learned helplessness, institutionalization, pathology, social stigma and inequality (social and financial) among many other factors that are external to the self. This means that addressing this dependency entails far more than just teaching and empowering the individual to be self-reliant and self-efficacious.
Sophie
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You are correct in the sense that a complex issue cannot be boiled down into two sentences in the comments section of a blog. There are 100 other arguments and data points floating about in my head as I write those things that aren’t available to the casual reader, which makes my observations seem shallow and uninformed.
I’ll steer clear of such topics in the future.
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I second what Tina said.
I think people are reading too much into this article – the point is to get you thinking about your attitude toward what you can accomplish with the resources available to you, including how you decide to perceive the world around you. It’s true that it’s difficult to be optimistic when your current situation is dire, and not everybody is able to do that, but there are people who succeed in getting themselves out of poverty because they have some of the mindsets listed in the “rich” column.
I’m amazed at the number of people commenting because they’re outright offended by this list’s apparent lack of insight toward how the “rich” live and the unattainable resources they have that the poor don’t. Talk about generalizing – not every successful adult descends from blue bloods.
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I think the better question to ask is what is the difference between the comfortable-living middle class and the paycheck-to-paycheck middle class.
It’s hard to compare the average rich and the average poor person due to many variables, including systemic (dis)advantages that run completely counter to the idea of meritocracy, the idea that hard work will always be rewarded in the long run. Comparing the behaviors and mindset of rich and poor may be an interesting thought experiment, but I think it can lead to conflating whether the behavior is a cause or effect of economic status.
I’m sure there is more uniformity to the backgrounds and opportunities offered to the average middle-class. A behavioral analysis of near-retirement age respondents with similar income levels to a “retirement confidence” survey would probably lead to a better list of differences, with less objections over circumstances beyond the control of subjects.
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This would have been a much more interesting topic to cover for a blog post here. I don’t know a single person who thinks of themselves as ‘Poor’ or as ‘Rich’. Those are labels we apply to other people only and it makes these stupid lists irrelevant. I know many people I consider rich and many I think are poor, but only comparing my situation against what I know of theirs. I know some brilliant people who have all of the “Rich” characteristics but don’t have 2 dimes. A more timely topic would be what is the Middle Class — and how do we preserve it?
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“What is the Middle Class”
I think that’s an excellent question. I always see articles and posts like “AMT expanding on the middle class” or something similar with middle class never really being defined…
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I think the biggest problem with these lists is exactly what many of the previous commentors have suggested – in general, poor people don’t have room for mistakes. I think this is the thing that middle class people often understand least – they made all sorts of mistakes growing up and even now that might have bad consequences but not life-changing-dramtically-for-the-worse consequences. This teaches them the “rich person” attitude toward risk/reward and many of the other attitudes that those lists in the post talks about. But poor people learn different things from the exact same mistakes because of the dramatically different consequences.
So how would these different consequences effect poor peoples’ behavior? You have to think that logically there would be two general reactions. One group of people will become incredibly risk adverse because they are trying not to make any mistakes. This describes many of the “poor people do this” list above. Another group decides that nobody can live mistake-free, so given that they are screwed anyway why not do what feels good at the moment? And this describes most of the other points on the list.
It is absolutely true that a third small group will, with a lot of luck and hard work, pull themselves into the middle class. But too often in the middle class view, that small group is viewed as the only ones who bother being smart and working hard instead of being the ones who worked exceptionally hard, were exceptionally smart, and/or were exceptionally lucky.
Interestingly, this is true even though people generally don’t think people who stay middle class are dumb and lazy – we think that people who go from middle class to rich worked exceptionally hard, were exceptionally smart, and/or were exceptionally lucky.
I think a good thought experiment would be thinking over your life and examining the points where having much less money would probably mean that your life would have gone very differently.
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Thank you for this. Blaming the poor and saying that if they changed their mindset that they could become rich ignores things like racism, disabilities, lack of access to education, and a whole host of other factors.
If everyone started a race at the same time, then the person who worked hardest and was most determined to win would be rewarded. But life is more like a race where some get to start only a few meter’s from the finish line and others have to run further and over a lot more obstacles to get anywhere close to the ‘finish’ line of financial security.
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The only problem that I see with your comment is that you assume life is a race with each other. In reality it is only a race with ourselves. But let’s say we do assume we are in a race with other people, and get stuck over the fact that many have a head start over us. We would never be able to win with that thought lingering in our mind. We are in essence keeping ourselves from truly winning.
As for me, if someone has a head start over me, I accept the challenge. I put myself to the test and see if I can accomplish what others might consider impossible. And believe me, many people have started “way ahead of me” just as other have started behind me.
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Of the first 20 top-level comments, 11 or 12 are responses to the idea that there is a difference between rich and poor people, rather than to any of the differences discussed in the article. Words/phrases used include “obnoxious,” “insulting,” “I fear,” and “have issues.”
8 to 9 are responses to the content of the article, either by referring to its content directly or to related experiences that indicate, refute, or are about differences. Phrases like “My 2 cents,” “I remember,” and “these questions come to my mind” were used.
That seems representative of discussions about wealth in the US.
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Eker’s list is literally a list of lies. It’s not even the warm fuzzies thing – it’s just not TRUE. Almost every single statement he makes about the middle-class is not just a generalization, it’s a lie and I think it’s important to call that out.
(And the exceptions are things like “Millionaires have multiple sources of income. The middle class has only one or two.” Which is for the most part true, although overly simplistic. But the ones on how the middle-class thinks/feels/talks? Just LIES. There’s nothing empowering – OR thought-provoking – in a list of lies.)
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On the face of it, these types of lists are trite and simplistic. On the other hand, I could boil it down even further. Rich people have access to ‘cultural capital’ that says “I’m one of you” to others with means, in the way they speak, the educations they receive, the neighborhoods they live in, the way they raise their children, the type of food they eat, their choice of entertainment, the people they know and the people their acquaintances know.
All of the above is a huge jump start to socioeconomic success. While it’s not out of the question for someone from a poor neighborhood with poorly educated parents to become rich and successful, they simply don’t have good access to learning the behaviors of elites, which go a long way toward opening the right doors, so the poor are starting from way behind. Not to mention having to deal with their own friends and families, who may work hard to discourage them from ‘becoming too good for us’.
Think Pygmalion (GB Shaw), or for a good nonfiction account of the constraints and economy of the poor, read Off the Books: The Underground Economy of the Urban Poor by SA Venkatesh.
There’s so much more going on than simply ‘thinking like a rich person’ that lists like the one in this post are beyond useless. Who does everything right anyway? But if you have a social and/or monetary safety net, taking risks and making mistakes doesn’t carry the same costs as it does for those without that net.
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There are some people who are value money above all else and will do whatever they need to in order to obtain as much of it as possible, and based on this devotation naturally exhibit many of the characteristics on the list. There are some people who act like victims of their life and based on that mindset, they will exhibit characteristics of those listed as poor. There are many who are poor who cannot afford to take as many risks because the consequences are more dire to jump without a safety net.
But what I think would be helpful information is to find out from people who pulled themselves up but are not devoted entirely to money regarding their thoughts on the topic.
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Read the book that is who he talks about self-made millionares, not ones who are given their money.
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JD, I appreciated this article. While I do not agree with either Eker or Smith entirely, it is good to engage these lists and see what we can learn.
I live in an area with many people who would be considered poor. It is definitely a lot different from the area where I grew up which was middle class. Living here has opened my eyes to just how differently people live. There are many people where I live who work very hard and are not able to gain wealth, they can only seem to maintain. There are others who have no desire to work hard, and will simply take everything they can get and call it good. I would think Eker and Smith’s lists apply more to the second group, than the first.
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I don’t think this post is bad at all.
There is so much of this sensationalistic and cliched books out there that claim to teach how to get rich.
Apart from J.D’s skepticism the comments in this post are the real value here in putting all of that “wisdom” in context.
Good post
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JD – I think the lists continue the propaganda that “if only poor people WANTED to, they could not be poor any more”. While I do believe there are people from poor backgrounds that do step into middle class and wealth, I think that there are alot more thngs in their way then their lack of imagination and positive attitude. When no one around you is suuccessful it is pretty tough to assume you can be, when your race and place have 20 to 40% unemployment vs some area that have 5%, you have way more ground to cover to get a step up. I recently heard that black families have 20 times less assets than white families – that means there is someone around who can provide that much needed stepping stone to move forward. I truly believe these kinds of lists allow those of us that have (not even weakth but middle class) to feel better about the disparity in wealth – to believe that Everyone could have it, if they wanted it. I disagree.
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I had to respond to these lists largely because of the flawed assumption people make that poverty (as in being materially poor) is a personality defect and has nothing whatsoever to do with structural issues. Clearly, this is not true when you have an educational and a health system funded by property values (which gives the Rich the luxury of opportunity that allows them to see opportunities and to believe their choosing creates their own lives, which does not exist among the poor who do not have options). Nor do these opportunities exists when transit systems decline to create public transport to suburbs where jobs are being created. Nor do they exist where job training programs are underfunded or focused on resume writing and NOT on training usable skills. I think this list is largely meant to justify an overly individualistic sense of entitlement that is willing to do anything to let “Rich people promote themselves and their value(s).” This is why the Occupy movement exists.
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To me, this article smacks of elitism and ignorance about the real world. I think these are ridiculous gross generalizations. J.D., how about you round up some actual poor people and ask them if they really think the way this author says they think? Then we can start a real conversation. This is just plain insulting, this list. You have traveled all over the world and yet you condone this kind of know-it-all attitude about the poor?? I expect more from this blog.
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I think that is a great idea for a post.
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What a terribly ignorant and insulting worldview.
I’ve read this blog for years, and now I’m done with it.
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In terms of helping me understand better the problems of living with poverty, I liked the episode of Morgan Spurlock’s “Thirty Days” on living on minimum wage. What he encountered, other than lots and lots of sacrifice ( which we can all agree is a good strategy towards bettering yourself) was constant slipping into debt because of medical problems brought about by his very difficult jobs. It was very sobering.
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I’m annoyed that most of these lists try to define “middle class (or poor) vs. Rich”.
I think they define “Rich vs. Wealthy”.
**IMO**
Rich people earn and spend. I’ve had clients – a couple – with a combined income in the $300k range tell me that they can’t make ends meet. They are “Rich” by any definition. They have the nice car, nice house, nanny, etc. etc. But they are living paycheque to paycheque. The home equity line of credit is maxed, the credit cards are maxed, the car loan has a higher balance than the car is worth…
Wealthy people live below their means. They save, pay off their mortgage, invest, spend wisely, etc. The wealthiest client I ever had wore jeans with holes in them because “they’re still good”, and lived in a small house in an ‘ok’ part of town. On his son’s 21st birthday he lent his son $1M. Within 18 months the son had paid him back and was well on his own way to being wealthy.
Poor/middle class people can be wealthy, slowly, sure, but they can do it. “Rich” people can’t.
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For everyone who is accusing Ekler of saying that being rich or poor is some ummutable personality trait – you need to reread the post
“Our blueprints are created through lifelong exposure to money messages from the people around us. Unfortunately, Eker says, most of us have faulty blueprints that prevent us from building wealth.”
He is acknowledging that people are a product of their curcumstances, that past experiences shape how we relate to money – and that rich people’s experiences cause them to think one way and poor people’s experiences cause them to think another. I think that’s dead on.
the thing is – he’s not saying ‘if you think like a millionaire you can be one’ he’s saying – when something happens – how do you react? Do you react like a poor person or like a rich person?
The name of this site is Get Rich Slowly – meaning reasonably. Based on everything I’ve read for the last few years that means how do I make the small every day changes that eventually add up to wealth. And maybe the small everyday changes are to change the mindset of – I can’t do anything about being poor, rather than stretching one’s mind to the possibilities that are out there. It’s about concious spending and decision making that moves you forward instead of backward.
the glib retort to this list is of course that ‘Rich and Poor people think the same, they attibute good things as their responsibility and bad things as someone else’s – it’s just the propotions in their lives are different”
But I chose to think that whether someone sees a negative event as an opportunity *can* make the difference in the proportions
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I skipped a lot of the comments because it seemed as if a lot of people got offended for some reason. I’ve been poor and now I don’t consider myself rich but I guess I’m getting there. I come from inner-city Cleveland, where most people are poor and don’t even know it. The current economic conditions didn’t affect them much because this was the way they lived already.
I can tell you that I agree with both lists. The mentality in the hood is tread water, not learn how to swim to shore. The first step in fixing the problem is identifying it. Isn’t that what the article intended to do?
I think it’s more of an injustice to say shame on them for looking down on poor people than to say shame on you for not seeing that poor people NEED to hear this. There are people that after reading this, will think to themselves that maybe it IS how I think that is limiting my potential.
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Excellent post, Kyra. I always liked Dave Ramsey’s analogy of poor vs. broke and thinking richly vs. thinking poorly.
Broke people think like rich people (save money, live within your means, give thanks for your many blessings, love others) but are at a point in life where their income is low. They are trending upward.
Poor people have a mentality that they are owed something or that the *system* is working against them. This is a mentality can be passed down through generations. They are either stagnant or trending downward.
Most of us started as poor thinkers as kids. Remember blowing your entire allowance on bubble gum? Or baseball cards? It takes someone along the line to teach us about how to handle our money and how to make good decisions.
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Exactly! (To both Kyra and Evan H.)
Evan’s poor people description made me think of another book I read recently. It’s “The Slight Edge” by Jeff Olson. It’s all about doing little (easy) things every day to improve your health, relationships, and yes, financial situation. I think this one book has done me the most good and will continue to do so.
The little decisions we make every day add up to a huge difference in our life. I am taking responsibility for myself and my situation. I think more people would be better off if they did the same thing.
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“Poor people have a mentality that they are owed something or that the *system* is working against them. This is a mentality can be passed down through generations.” Thank you. I tried reading all comments and got lost on too many, but figured bottom line: majority are mad because they don’t like accusation in having not-so-awesome mentality, and then others who say if you take away the harsh words of statement and think, pretty much a lot of it applies. Of course, topic deviated with OWS, taxes and so on, which is not fare to the post’s idea. I’ve been, as most of ya’ll poor, very poor, and a solid middle class. I had those tax advantages due to salary number, but I simply slowly clawed up. Personally, as an immigrant and from former communist block, I use mentality “Nobody will take care of me, and why anybody should? It’s all up to me. Nobody owes me a thing. Now, buckle up and get to work”.
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