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?
GRS is committed to helping our readers save and achieve your financial goals.Savings interest rates may be low, but that’s all the more reason to shop for the best rate.Find the highest savings interest rate from Ally Bank, Capital One 360, Everbank, and more.
This article is about Books, Psychology
Disclaimer: This content is not provided or commissioned by American Express. Opinions expressed here are author's alone, not those of American Express, and have not been reviewed, approved or otherwise endorsed by American Express. This site may be compensated through American Express Affiliate Program.
Discover is a paid advertiser of this site. Reasonable efforts are made to maintain accurate information. See the Discover online credit card application for full terms and conditions on offers and rewards.
SEARCH FOR RECENT ARTICLES
Fighting words for class warfare.
loading....
Many who have commented have missed the point. Yes, if you are already rich there is a safety net. But what about those who started poor or middle class and became rich? They didn’t have a safety net in the beginning. They created their safety net by living beneath their means and managing their money. Some took calculated risks. Others invested conservatively and just saved a high percentage of their income (Get Rich Slowly). Over decades they accumulated a high net worth.
The attitudes of these people differ from those who want to live rich and never accumulate substantial net worth.
If you come from modest means, you have to choose between living rich and being rich. You can’t have both.
Most choose to live rich, if they can. It’s easier (It can be done on credit!), and it is perceived to be more gratifying.
loading....
But none of that has to do with the lists made by Eker or Smith. How do you get that message from nonsensical statements like “Millionaires believe they must be generous. The middle class believes it can’t afford to give” or “Rich people are bigger than their problems. Poor people are smaller than their problems.”?
(Not to mention that first statement is a bold-faced lie)
loading....
And this is a side note – JD – your commenting readership has changed, as you have grown in your financial independance, you have left some people behind, yet they still read and comment, likewise, you attract new visitors who are much further away from financial independance than you and it’s taking a little while for them to get the message that you’re preaching. That getting rich is about personal responsibility, and making hard decisions. Part of it is the new staff writers – who write differently from you. You always speak about decisions you’ve made from a ‘I did this and it worked out cool for me’, more and more of your writers talk about how other people should be more like them, focusing on intagibles like – I feel good about not suporting slavery – instead of ‘I cleaned out my stuff – made x $ and have a clean home’. So you’re attracting new readers who like to be told what to do instead of be inspired. So of course when a post comes along that tells them they need to be inspired – that they need to figure out the roadmap instead of following what someone tells them – it’s ‘insulting’.
loading....
Mmmm, I’m not sure where I fall on the scale but I can say that those lists are not inspiring and it doesn’t have to do with me wanting to be ‘told’ concrete steps to increase wealth and more to do with the fact that they’re just factually inaccurate. If someone drew a Venn Diagram of the incomes and character traits mentioned on those lists, it wouldn’t support the conclusions. Fallacies just aren’t inspiring to me.
loading....
As if we don’t have enough people (politicians and even some GRS readers) blaming poor people for their plight. At one time I had a copy of Eker’s book that was gifted to me and I saw no real solutions in it. I attended one of his “free” seminars when I was still in the Bay Area and it was nothing more than a “rah-rah” session that reminded eerily me of an Amway meeting.
As someone here ho doesn”t have a high net worth out of circumstances and poor choices, I can say these two authors have the chicken and the egg backwards – at least in many cases.
A lot of my poor choices in life were because I didn’t know there *was* a choice, or that so-called “choice” was completely out of reach. It was like looking for a light switch in a pitch black room. When I did find the switch, the bulb was burnt out.
I’m not angry at JD for posting this, I’m curious as to what others have to say as well. Don’t shoot to messenger.
loading....
I agree with this a lot. My mother didn’t finish school so she was satisfied that I graduated high school. I achieved more than she did so she felt I was a success. I knew from a young age that I would not be going off to university like my peers, even though it was never said to me out loud. I never got the message that it was a choice that was available to me. Low expectations were set for me from the start and it’s a mindset I’ve carried into adulthood and am struggling to break free from.
loading....
Wow Vanessa, your experience almost mirrors mine, except my mother did complete school and became an RN. Even then, the expectation was to graduate high school and get a “good job” – nothing more.
loading....
Unhelpful in the extreme. I’m a person considered “poor” and reading this leads me exactly nowhere.
loading....
I just moved mom into a high level continuing care center. She is 81 with plenty to live off of.
Most of the people there are wealthy. Wealthy not uber rich. Not the 1 % but definitely up there.
30% are still living with their spouse- rare to see that many 80-90 yr old men. Many do not have step children because they married for life ( with an average of five kids). Most owned their own businesses- but the spouse never took a salary.
Networking, knowing people, continues to be top in their book. They also were the first people whom others could turn for help (sick children cared for, missionaries supported, museums and the arts supported ). They are, overwhelmingly, religious – this Baptist facility has Catholic, Jewish, Episcopalian, and UCC services.
Most of the men received their education as a result of serving in the military
where they learned that everyone put on pants the same way.
I would say, after watching this group of self made millionaires, that Smith has a better finger on the pulse of millionaires. He forgot, work 60 hours a week in your 20-40s and marry someone who will support your dream.
If you don’t believe these things to be true-most likely you do not know a self made millionaire.
Growing wealth is a mind set. ,
loading....
That is nice that your mom is able and those others are able to be comfortable in their old age, but I can’t help thinking “oh great, if only I were a white, religious, heterosexual small business owner with children.” I think there are other ways to skin the cat (in this case, be financially comfortable) than those characteristics. At least one hopes so! Also, correlation does not equal causation.
loading....
That seems very anecdotal.
At least a couple of your observations don’t seem to differ from the population at large…
That 30% figure isn’t much different than the general population. From census data
about 55% of men over 85 years old aged still married and nearly 20% of women over 85 are married. There are more widowed women over 85 since women live longer.
“They are, overwhelmingly, religious”
Depending on how you determine or measure this, its not any different than their age group as a whole or the nation as a whole.
loading....
The men in that generation also come from a time when there was a military draft; they weren’t necessarily going into the military in order to build character. That generation also benefitted from being able to buy homes that were more affordable relative to salary. The costs of housing have skyrocketed in many places, far outpacing salary growth. I am not begrudging that generation at all, but as they entered adulthood, they did luck out in that regard. (And I know how tough they had it in WWII, I’m talking afterwards.)
Oh, and I know several self-made millionaires, ftr.
loading....
From these lists, I see things don’t fit for me. I also see things that have changed in my thinking over the last four years. And I see things that I’d like to change in the future.
I’ll take what works for me, thanks!
loading....
A great many of these differences seem attributable to differences in locus of control. Poor people believe “life happens to me”? That’s an external locus of control — the belief that powerful others, fate, or chance primarily determine events. Know why poor people might believe that? Oh, maybe because powerful others, fate or chance often determine events in their lives. Not to say that poor people don’t have any control over what happens in their lives, but it is A FACT that people with more money have more control over what happens in their lives and the lives of others.
As for Shaun’s statement “You’re missing a small point: poor people often get rich.”, I can only say you’re missing a very large point: poor people more often stay poor. In fact, I’m willing to bet that a very, very tiny number of poor people actually get rich. The bottom 90% of earners have a median income of $33k per FAMILY (this from a NYT infographic this weekend). They are not likely to become rich en masse no mater what they do.
J.D.’s note: I love this comment. Thank you.
loading....
I would recommend people watch the video clip by Sendhil Mullainathan linked to from this page: http://www.dallasfed.org/news/ca/2010/10consumer.cfm
It has some very interesting actual data, experiments etc. that address these topics exactly. How we think about money (or time) varies exactly by how much money (or time) we have. Our behaviors change precisely because we have money (or time).
loading....
Of course most poor people stay poor. That’s the entire point of the list.
I’m a 22-year-old college dropout. I work on weekends. My friends don’t. They drink on weekends.
The idea that this behavior doesn’t magnify what causes what is absolutely delusional and insulting to those of us who /are/ doing everything right.
Actions can change circumstances. No, it’s not perfect — and no one is suggesting it is. But in the Information Age, income mobility is more possible now than ever before.
loading....
Shaun: “You’re missing a small point: poor people often get rich.”
Alexia: “poor people more often stay poor. In fact, I’m willing to bet that a very, very tiny number of poor people actually get rich.”
Alexia is correct :
Center for American Progress
“Children from low-income families have only a 1 percent chance of reaching the top 5 percent of the income distribution, versus children of the rich who have about a 22 percent chance.”
1% is not ‘often’ and is what I’d consider ‘tiny’.
loading....
Oh good grief, I said “often”, not “most”. And yes, go look at 100 kids raised by poor folk, and then tell me that 1 of those becoming rich isn’t “often”. Kids often act like their parents and have the same inclinations, training, and approach.
That absolutely proves the point that background causes approach.
That said, having a 1% of becoming part of the 5% is completely understandable — especially if the poor have and reinforce poor decisions.
loading....
Ok I think you misused the word ‘often’ then. ‘often’ means frequently or many times. 1 in 100 is not ‘often’. You wouldn’t say that you go to the movies ‘often’ if you do so once a year. 1 in 100 is not often or frequent it is seldem and infrequent.
loading....
JD, I’m very disappointed. These lists smack of “The Power of Positive Thinking” and affirmations and “thinking it makes it so” – so if you’re not monetarily rich, you must simply be thinking wrong. Not that the playing field is egregiously tilted toward those who already have greater means, no no no. It’s like telling someone who has cancer that if they will just pep up their attitude, they’ll cure the cancer.
We need to wake up to the fact that our treasured national delusion – that anyone who works hard, pulls himself up by his bootstraps, blah blah blah has a shot at becoming scandalously rich – is a fantasy.
More than all that, though, I have trouble accepting any list that suggests that those of lesser means are lesser people. Poverty is not a moral failing. And sometimes life simply sucks.
loading....
Val, that attitude by the Left is precisely what’s poisoning the lives of poor people. Poverty is not a moral failing, but very frequently it’s the result of mental failings. The more you resist that, the farther away you get from being able to help them– and, ironically, the more moral most people feel.
loading....
Valid distinction between moral failing and mental failing, I guess, but I think the point being made by Val is that there are still huge and possibly overwhelmingly powerful external factors that may keep many from achieving wealth — even if they have the perfect mindset and work ethic.
I don’t see this as pure left/right debate, but obviously many of us disagree on the degree to which your economic circumstances are internally driven or externally driven.
loading....
Some people seem to think that success is all about choice, and other people seem to think that success is all about circumstance, but isn’t it really equally both?
I mean… in the worst of circumstances, no matter what choices you make you are not going to be successful.
But even the best of circumstances won’t save you if you make terrible choices.
And yes, there is no denying that the right attitude and the right determination and the right way of thinking gets you very far, and that people can “make their own luck”, as it were.
But there is also no denying that it is much, much easier to make your own luck when you already have some to begin with.
We should NOT discount the power of attitude and choice. Indeed, I think that there are MANY people who do discount it, and we should be educating and encouraging those people to help them make attitude adjustments and choices that will benefit their lives better.
But it seems to me that both of the lists in this post are indicating that those who are not successful are obviously making the wrong choices and have the wrong attitude, and frankly that is dead wrong and more than a bit insulting.
loading....
“But even the best of circumstances won’t save you if you make terrible choices.” – ‘Terrible’ is a sliding scale that is dependent on your circumstances.
loading....
I like this article. Like many other posters here, I have experience in both the “less fortunate” and “fortunate” financial sides. When I was $40,000 in debt, I would have been incredibly offended by this article (not implying that this is why others are offended) because it represented me a great deal, especially the “victim mentality”. I blamed others for my debt and life, not my own poor decisions. Some of my situation was out of my control, but a lot more than I wanted to admit was based on my decisions.
I should be clear that it would be easy for me to get offended at this article and point out the large numbers of folks that I knew that didn’t fit these ideas. The ones who had a ton of bad luck, worked their butts off, and still couldn’t break the cycle, but that’s clearly not JD’s point. No one on this forum thinks that poor people are just lazy or that all rich people deserve their good fortune (nor will anyone buy that all poor people are noble and all rich folks selfish and undeserving). These lists are being presented as a tool that we can all use to evaluate ourselves and our mindsets.
Do I believe that rich people are better than poor? Absolutely not, but I do believe that, in general, they must be doing something that I can learn from. I could dismiss Bill Gates as a one-in-a-million figure who had a lot of good luck, but even if that’s true it would be a waste. There’s always something that we can learn from those who are where we aspire to be. Regarding the list’s content, the elements from Ecker’s list that especially resonate with me are 3, 7, 8, 13, 14, and 15. It’s interesting to think about my mindset and the internal messages that I give myself. Am I sabotaging myself unintentionally? I think that these are definitely issues that are interesting to explore.
I know that we have a lot of intelligent/successful folks on this forum. Does anyone have any advice for improving your internal messaging and maintaining/building motivation and ambition?
loading....
The thinking behind these lists is so fairy-tale that they are almost not worth acknowledging, but here’s my thought on the difference between how rich people think differently than the rest of us (poor or middle class):
Rich people THINK they’ve earned their wealth. The rest of us KNOW we have.
Some wealthy people have earned their wealth, but rarely have they done so on a level playing field; typically it is tilted in their favor already. Most poor and middle class people have earned every penny they own and often achieved this distinction despite the odds being against them. Therefore, we understand exactly how far merit will get you. It will get you somewhere, but not anywhere you might seek to go.
loading....
Be careful with that “most” you’re throwing around…I’m a person who grew up poor and currently, though I’m not super rich, I am in the top 10%–very comfortable. And yes, I believe it was mostly through hard work and merit. I worked hard in school and saved. My current job/income is because of my doctoral degree.
It’s just plain wrong to say that hard work and merit doesn’t make any difference in a person’s income or economic situation. Maybe it doesn’t explain 100% of the difference, but it does explain a lot in many cases. Feel free to drop out of high school if you don’t believe me, and check out how well you do after that…
loading....
I thinks it’s a mindset. You can have a poverty attitude and all that entails, or you can have a success or wealth mentality.
The word millionaire is such an artificial measure. I think “successful” might be the better word to use for those that choose the path to financial success.
I teach people in my Celebrating Financial Freedom course that you won’t be able to succeed financially if you possess and feed a poverty mentality. But you can easily change that mentality if you choose to do so.
Thanks for the great post, and remember…
“When you help me with money, you help the world prosper.”- J.M. DuMont
loading....
I think these authors really need to distinguish between “successful” and “rich.” I know of many successful people who lead satisfying lives and are well-known and respected in their chosen endeavors. Many of them fit the stereotype of “rich”, yet only a minority are financially rich.
From my personal experience, the biggest difference I’ve seen in rich versus poor (or non-rich) people, given other basic characteristics of ambition and skill, is they value making money over most other life objectives and have organized their life around that, starting from what they decide to devote their life to (business yes, art, no). Also the way they make decisions, is that it is a game with winners and losers and they want to be on the winning side. Some of the examples I can think off the top of my head: is a man who rather than keep affordable low-income housing, evicts the tenants so he can bulldoze and build expensive condos. Another person who gets a job dealing in weapons of mass destruction, the rationale being that if he didn’t someone else would and now my family is better off. Or lastly force a brother out of the family business using a personal tragedy to gain full ownership. Heck what other people see as personal tragedy, others see as a business opportunity. Intuitively these were the “right” decisions because it made them richer. From my personal experience anyways, (at least some) rich people ARE different from the rest of us:they are willing to make decisions that most of us would have ethical difficulty with, or simply wuld not entertain.
loading....
Its too bad that by the time us west coast people finally get on to read this blog, most of the conversation has already taken place.
This is a very interesting subject, if you can prevent the sort of gag reflex some of the commenters exhibited.
This is just a list, meant to spark interesting discussion. The “Im taking my ball and going home” crowd is totally missing the point. As JD has said, and Im paraphrasing, even the most idiotic idea can have some merit, even if that merit is just that it caused you think about something in a different way.
The list doesnt apply to everyone, no list does. The difference between poor and rich, IMO, is the sheep mentality. Poor people who stay poor dont educate themselves. They are content with their ignorance.
I just remarked the other day, after listening to a radio DJ talk for 5 minutes about Lindsay Lohan doing a playboy photo shoot, and asking callers how much it would take for you to strip naked, that I can no longer relate to the average American. The average person is just too ignorant, their viewpoint too narrow, and their plans/goals in life too short sighted.
If you work 8 hours a day, and then come home and watch TMZ, only to do the same thing tomorrow, and the next day, and the next day… without ever thinking bigger, then you will never become rich. Ever.
Im not saying those people who do that are inferior(although the TMZ part makes it hard), but hearing people complain about their lot in life when they have never *tried* to do better, or when they ignore the hard work and sacrifice others have made to get where they are, is irritating.
loading....
Do you really think the majority of Americans watch TMZ (I don’t even know what that is!) and care about L. Lohan stripping naked? Maybe you should get out more because no one I know is even remotely interested in that garbage. I mean, why were you listening to it in the first place?
See what I mean about stereotypes?
loading....
It was on the radio while I was riding in someone else’s car. I do think the majority of Americans watch TMZ, although certainly not all(you are one example, allegedly, and I am another).
And I was obviously stereotyping when I said “average”.
Nevertheless its totally true that most people are just far too unconcerned with issues greater than their immediate plight. In the third world, this is understandable. In America, it is not. Even the poorest American has access to information via local library, and has the oppurtunity to educate themselves via that information or through gov’t guaranteed student loans.
If you choose to stay ignorant of the world around you, then that is your choice. Most americans make that choice.
loading....
See, I have an issue with the use of the word, “most”. I guess its most if most of the people YOU know watch it. For me its very few because no one I personally know does. I would like to see some statistical information regarding this, but I know that’s impossible.
Its generalizations like these is how racial and national stereotypical get started. Being part of a minority group, I know that all too well.
loading....
The facts don’t back you up though.
18.5M people read TMZ (statistics April of 2011)
There are 312M Americans – which means only about 6% of Americans read TMZ which isn’t even close to a majority.
loading....
The TMZ thing is distracting you from the real point: the average American watches 35 hours of TV a *week* (according to Nielson stats). That is nearly a full time job! Whether its TMZ or soap operas or the Office doesn’t really matter. That is a lot of wasted time every week. (If it were all documentaries, there would be a lot more of those being broadcast as opposed to reality shows and sitcoms). If all you do is work 9-5 then come home and eat, sit, and sleep nothing is going to change in your life.
loading....
Oh dear lord…
18.5M people read TMZ. Thats worse than even I would have predicted.
Anyway, I wasnt saying that greater than 50% of the population watches the show TMZ, and inferring that from my posts is disingenuous and/or completely missing the point. The point was that the number of well informed Americans is far below the number of uninformed Americans. I dont even need to any complicated statistical research. Just consider the fact that the US congress has an approval rating below 20%, yet over 70% of US congressman get re-elected every 2 years. But hey, by all means continue to straw-man my arguments as our country swirls around the toilet bowl, getting ready to go under at any moment because the average person, the one you are trying to defend, is too lazy to read up on who they are voting for.
loading....
Good lord, Brenton. You cannot extrapolate anything based on how many people read or watch TMZ. I go to the site once in a while and (gasp!) subscribe to US Weekly, and guess what? I have a Ph.D., listen to NPR for at least an hour a day, and read a weekly news magazine and also read the New York Times Online.
You can argue that our country is going down the toilet educationally, but I think you need a little more evidence than you have currently presented.
And for the record, I watch TV every night too. Oh, my. But our income grew this year and will probably continue to do so.
Stop the presses – people and their interests are complex!
loading....
TMZ was just a symbol of nonsense, it wasnt meant to be taken literally as “anyone who ever watches TMZ is destined to be poor, dumb, and useless”.
I was just pointng out that people often dont look beyond their own personal bubble.
PS: My respect for academia just plummetted at the thought of a doctoral candidate watching TMZ while working on his/her thesis.
loading....
Wow.
loading....
Brenton, honey, when you spend all day thinking and thinking hard, your brain needs something completely mindless to relax to so your subconscious can work on the tough problems you didn’t solve during the day.
If you seek only mentally stimulating activities outside of your day job, then perhaps your day job just isn’t that challenging.
loading....
I agree with Brenton—if you spend a lot of time doing useless stuff like watching trash TV, it does have an effect on your life, and probably your financial situation too.
I know people who say they are “too busy” to clean their house and they live in a disgusting mess. But of course they do have time to watch 6 hrs of tv every night!
Of course some people use TV to relax after an intense day–not a problem. You just have to evaluate whether you really have the time to do stuff like that or not.
loading....
I haven’t read either book, but I *have* read Millionaire Next Door, and so far I like what that book has to say more than the other two.
The definition of “rich” or “millionaire” really need to be defined. I’m a teacher. I will never make a lot of money. I believe strongly in what I do and work my butt off at it. Can I be a millionaire some day? If you define that as having a net worth of a million dollars (like Millionaire Next Door), yeah, that possibility exists, if I work hard and am smart with my money. Will I ever be “rich”? Not by any normal definition of the word, but I feel very blessed with a career and family and steady income.
I grew up with a father with the entrepreneurial spirit who just never quite made it. He could have been rich if things had turned his way, but instead he was a man with many obligations and no consistent income. All of us kids are thrilled to have a steady income and insurance and the stability we never had. There is a lot to be said for financial stability and a career you love.
I believe I can get rich slowly by being smart and consistent. I am well educated, give generously, continue to learn every day, am positive about my life and my future, and associate with positive wonderful people from every different income level. I literally have millionaires next door who got there by being smart and consistent, not by being an entrepreneurial millionaire like Steve Jobs. Some of them were even teachers!
loading....
I would be curious to see how many of the truly wealthy have taken out bankruptcy at least once. I’d be willing to bet a high percentage of them.
loading....
To the extent that these lists of attributes of rich people are based in reality, it only applies to a certain kind of rich person … the self-made first generation kind. Lots of people marry into money or inherit money and their attitudes and work ethic do not have a direct connection to their income level.
Likewise, the lists of attributes of poor people only apply to a certain kind of poor person. Lots of people come from circumstances that handicap their ability to earn money or keep money because of bad luck, bad choices, illness, family responsibilities or whathaveyou.
Others deliberately choose to make a smaller income because they choose careers in education, the arts or social justice that require it. They are making a deliberate trade off – money for non-material rewards.
The poor people described in this list are really middle class people who despite having all the same opportunities, values and inclinations are unable to get their lives started and who may have ended up poorer than they began.
loading....
“Lots of people marry into money or inherit money and their attitudes and work ethic do not have a direct connection to their income level.”
It depends on what you mean by “lots”. The vast majority of American millionaires are self-made.
loading....
This post reminded me of a conversation I had with my father when I was about 10 years old. He told me that he was poor growing up in rural Missouri, but never lived in poverty. Most of his friends were either poor or in poverty, but he was always in the “poor” category. I asked him what the difference was between being poor and being in poverty. He told me that being poor is a temporary situation, while poverty is a state of mind. His poor friends lived in tidy houses and the grass was always cut; his friends in poverty lived in messy houses with overgrown lawns. The poor kids had parents who thought their childrens’ futures were bright with good opportunities; the kids in poverty had parents who thought their futures were bleak and hopeless.
I’ve always remembered this conversation and it made a big impact on me. Yes, it’s a somewhat simplistic view of things, but it made sense to me as a child, and it still makes sense to me now. My dad is now solidly in the upper middle class, and I think his success is largely due to his mindset.
loading....
Disgusting. End of comment.
loading....
I’m curious to know why you find this disgusting. To me, the lesson from what my dad told me was this: If you give up hope, if you let life happen to you, if you just accept your circumstances, you will never improve your station in life. On the other hand, if you always believe you can overcome negative circumstances and you work hard to do so, at least you have a decent chance. It’s no guarantee, but the odds are significantly better than just giving up.
loading....
Angela – I don’t think Anne’s comment was directed at you but rather at the article as a whole. She didn’t directly reply to you, so it was my understanding that the “disgusting” was about J.D.’s article.
loading....
I think Eker has got it mostly right. I have more ticks in the rich column than poor so that bode well for the future.
loading....
Good for you! And maybe you can read your horoscope in the newspaper and find out if you will win the lottery next week as well!
loading....
When I read these lists, I see myself reflected in the way rich people think. Despite never earning much money, my husband and I are approaching rich, when it comes to net worth, even though I’m still in my thirties.
My thought is that considering yourself poor can be something of a victim mentality–the world has done me wrong; being rich or working toward building wealth means figuring out what it takes to get things done, then doing it.
For my family, the way to build wealth has been extreme (yet joyful) frugality and investing, and thinking long term. Giving is very important to us, too.
loading....
It is certainly valuable to discover what mindsets/traits are common among successful and unsuccessful people. However, it’s not helping anyone to read lists which suggest acting like a rich person when that isn’t possible or practical for someone. It would be more helpful to have well-researched information about what someone in a similar situation can do to better their life/improve their financial health. As long as the research is based on opinions and anecdotes, it will be/appear biased, lack credibility.
loading....
I don’t know if there are simple lists which define the difference between the rich and the poor.
The Millionaire Next Door does the best job in my opinion. Besides being able to decide where people spend their money on, it is also where they spend their money on.
loading....
Interesting. While obviously not perfect, I think there’s a lot of truth on these lists. People who disagree must not have spent much time being observant in all poor or all rich communities or groups of people. I’ve been in both, and a lot of these generalities apply (but certainly not always, and there are certainly many other factors, including systemic and political problems).
A lot of factors on these lists explain why some families in America are poor over many (3, 4, 5…) generations, while immigrants who arrive in America with nothing often do better.
I do see these lists breaking down a bit regarding the people I know who are living off of their parents’ or family wealth. I’m guessing that inherited wealth often creates a different personality than those who worked for their millions.
loading....
Ugh. People always say things like that, but do you realize how many of these ‘immigrants who came with nothing’ came with an amazing *education*? And how often they moved into an environment that boosted their chance of success (ie, they had connections and networks of other immigrants)?
Not to mention it’s one of those statements that only counts ‘successes’ on one side and only counts ‘failures’ on the other.
loading....
Rich (successful) people keep trying to succeed despite failing. The keep trying until they succeed!
loading....
I’m highly skeptical of both lists. They sound anecdotal. Do either have any sort of numbers to back up their claims? There’s also a heavy dose of what reads to me as a sort of paternalism: if you poor people just Try Hard and Think Successfully, money will come to you! I agree that systematic causes of poverty, particularly generational poverty, are too lightly dismissed by these lists.
There’s a second assumption here that I don’t swallow, though. I don’t think rich necessarily equals successful. I’m successful but not rich. Surely there’s others out there?
loading....
My wife has pointed out in the past that one thing in the USA is that being poor is associated with Shame. People are embarrassed to be poor because our culture says that if you are not wealthy it is because you are a screw-up in some fashion. In places where everyone is poor, by contrast, it is not as much of a hang-up. I think she is right.
It is lovely that people can become financially successful in this country, though it seems trickier than ever. I agree that a positive, empowered mental outlook can help in financial success, as can resiliency and positive risk-taking.
How do we get to where more people are in positions to have those traits? I think that working on that does a lot more than celebrating the few and putting down the many. The whole focus on making life better for the 1%, or the ‘job-creators’ seems misplaced to me, when we should create a climate of education , empowerment, and consciousness for the many.
loading....
I guess I missed the memo that says only rich people are successful. It must have been the same one that said rich and wealthy are interchangeable. It seems as though there are several different ideas going on in the comments, and in the piece, that are getting mushed together.
loading....
This post is interesting if for no other reason than that is spurs a great conversation.
The perspective of rich vs. poor simplifies the question too much.
I draw the line that Stanley makes. There are two types of rich people:
1. The Rich
2. People who act like they’re rich
The second group acts very differently from the first.
The second group makes six figures and has fancy degrees. They’re rich. But they’re not like the millionaire misers.
So on bunching the rich into on large bucket I strongly disagree. One of the great things about GRS is that it teaches people to act like #1 and not like #2. There’s a difference.
I would be very curious to see if there is a similar distinction between 2 or 3 groups within the poor sections of our country.
loading....
J.D. I’ve read that list more thoroughly again and almost every single one can be tied to a tenet of “getting rich slowly”. I think it is just the barrage of getting 27 pointers all at once (and the always button-pushing “rich” vs. “poor” language) that is getting people upset.
Not to belabor the point, but for example:
6. “Poor people associate with negative or unsuccessful people”, i.e. your articles about how to navigate friendships where the other couple spends a lot more money than you and forces you to live above your means
13. “Poor people focus on their working income”, i.e. “spend more than you earn”, focus on both sides of the equation (net worth) instead of just spending or increasing income
1. “Millionaires think long-term”, i.e. getting rich slowly, duh
2. “The Middle class talks about things and people.”, i.e. making sure you are getting value from your Stuff and not just doing it to keep up
You get my point. I think you should secretly insert these distinctions into a series of blog posts from your point of view, and see the positive response you get as opposed to the backlash you are getting today.
loading....
The lists are gross generalizations and stereotypes. THey appear to be based on nothing more than a pile of assumptions from individual authors. Some of the items are just vapid nonsense. I can’t deny there is some truth to some items but there is no distinction between cause and effect. Certainly many of the traits prescribed to the rich are how rich people act because they are rich and have the luxury / ability to act that way. A few of the points are just gross stereotypes. Item #8 on the millionaire seems to be simply incorrect as we know that low income people give to charity at higher % rates.
This is what I think :
Your parents affluence and your education level trumps everything on both lists combined.
Think about this: Take all the rich people in the country. Set aside the 10-20% who inherited their wealth. Remove their education and remove their parents wealth. Would most of them still be rich? I seriously doubt it.
Likewise: Take all the poor people and give their parents money and give them a college education. Are they still poor? I doubt it.
loading....
So true! I was thinking about that earlier. Rich people can afford to send their kids off to college, and the kid graduates loan free and with a great education. Poor and middle class children, if they get to go to college at all, probably come out of it with huge loans. They start out with a disadvantage rich people don’t even have to think about.
loading....
I think some of the points in the Eker list are about clasically poor versus rich (like the mentality that life happens to you versus creating your own life). However, I think most of the points are basically talking about how to be an entrepreneur or leader (which is where the real “rich” money is) versus your basic salaried employee (e.g., #s 8,13,15,17) and should be taken as such. And, in that sense, I do think leader/entrepreneur is very much a mentality and quite accurately described in those lists.
I, myself, am a very well-educated, hard working person who’s never, ever going to be “rich” because I do not have the personality traits it takes to become a big-time leader or entrepreneur and, in fact, don’t really admire alot of those characteristics, such as risk-taking and the ability to sell yourself/product when you really have nothing good to sell (#4,7,8). For every Steve Jobs, there’s a Bernie Madoff. Both had “rich” characteristics, but only one is to be admired for having such. I’m not so sure it’s appropriate to get offended but, rather, evaluate for accuracy and decide how it fits with your own value system.
loading....
What it comes down to is that things like hard work, the right mindset, etc – they’re all good things. They’re valuable things, and they’re things that should be encouraged.
But it’s a *myth* that they lead to success. All they do is create a greater *chance* that you will succeed. How much of a greater chance depends on where you start – and the worse your beginning situation, the smaller that percentage is. Which doesn’t mean don’t do it, it doesn’t mean give up. But it does mean that lists like these tend to be more harmful than good, because they perpetuate the idea that poor people are to ‘blame’ for their poverty or that the (rapidly-shrinking-and-not-because-just-that-many people-are-becoming-millionaires) middle-class is loosing ground because of their bad attitudes – it’s just wrong. And it’s not healthy to continue to perpetuate this lie.
Not to mention this idea that all rich people behave and act in one giant, monolothic way is just nonsense. Or that all poor people do or all middle class or … Venn Diagram this up and it Doesn’t.Work. I know more than one person who have trait after trait in the ‘rich’ column of Eker’s list who have died in poverty or live paycheck to paycheck.
And things like “Rich people admire other rich and successful people. Poor people resent rich and successful people’ – REALLY? That’s not data, that’s fear and class warfare.
Or how about: “Rich people choose to get paid based on results. Poor people choose to get paid based on time.”
Heh. Do you know who also ‘chooses’ to get paid on results? Migrant farm workers who get paid by the bushel.
loading....
I agree. I’m making about $10,000/year and I was going to major in business because I was too scared to major in something that I loved. I realized I was making a decision based on fear.
Poor people often do make choices out of fear. I’m sure that’s not true for all, but I was about to make a decision based out of fear. As someone in their mid twenties, I didn’t want to do that anymore.
loading....
most offensive post on GRS I have ever read. i am upset. what about people with those with mental disabilities or disabled war veterans? do we call them small minded? do we blame them for thinking small or “associating with unsuccessful people” when they make community with other veterans on the street?
i understand the tenor of this article, but it could have been written FAR more nuanced than it was. this is not a list of “rich” and “poor”, this is a list of people who are on track towards financial struggle, and people who are on a track to be financially more robust!
i am seriously reconsidering my participation in the GRS world. this article is offensive and needs to be pulled down.
loading....
Nice knowing you. I recommend you check out GetRichNuancedly.org, it doesn’t have any controversial articles and it shies away from painful realities.
I for one like straight shooters who tell it like it is. For those who are stuck in the poverty mentality and would like to figure out what they need to change in their life to get out of that sub-optimal worldview, “nuanced” explanations don’t cut it. I myself loved this, as it helped me see certain thought processes and tendencies that are holding me back as I seek success in all areas of my life (money, relationships, happiness, etc).
The main point is successful people take control of themselves, make plans, and make things happen. How is this offensive? It’s motivated me to grow up and take more control of my life.
loading....
Sorry Matt, but nuance is everything when we are heaping blame upon people who are living at the margins of society.
loading....
I am middle class, and have been poor (very recently). I don’t resent rich people, I resent arrogant people who assume that poor people are poor because they are lazy or stupid.
I agree that financially, I could have more money if I made different choices. For example, I am a librarian. Not a highly paid profession, but it is what I want to do. I LOVE my job. My husband is a police officer. Same situation. Neither of us makes a lot of money, but we get by, and we like what we do.
The problem that we have now is that with the economy being the way it is, neither of us has had a raise in several years (working for the government is not the cushy overpaid job so many people think) yet the cost of everything continues to go up, so even though we work hard, we have LESS than we had a few years ago. Does this mean we are lazy or stupid? My husband is not allowed to get a second job, and I am in graduate school at the moment, so between that and working full time I can’t get a second job either. I think in general we both do have a positive mindset–we know this is just a temporary setback, and things are going to get better. We will ride it out where we are, since we love our jobs and our community.
We do get by, but things like car repairs and new glasses are very difficult for us. We don’t live a lavish lifestyle; my husband drives a 1986 Ford Taurus and our other car is a 2007 Mazda (new for us!). Perhaps some food for thought: why is it that education and public safety are so undervalued that people who work in those fields are barely getting by, and sometimes not even that?
loading....
This will sound harsh, but those are low paying jobs because they require little training or background knowledge for many people to fill. I think it’s great that there are people who enjoy those jobs and find them fulfilling, but salaries are a supply/demand equation. if what you do can be done by others, it doesn’t pay well. you have to acquire skills that make you uniquely qualified for a position that is in high demand in an industry that makes money- which usually means a graduate degree in a high growth field. This is why lawyers, doctors, consultants, fund managers, etc. make a lot of money. What they do requires a certain high demand skill set that takes a long time to obtain (physician= 4 years college + 4 years medical school + 3-5 years residency +/- 1-3 years of fellowship= 11 years minimum). Its find if you like what you do, but you can’t complain if you chose a profession that is not high on the supply/demand list. We don’t pay people based on their value to society, we pay them based on their monetary value to individuals and organizations for the most part.
loading....
“This will sound harsh, but those are low paying jobs because they require little training or background knowledge for many people to fill.”
What? You obviously have no idea of the educational requirements for either of those professions or you wouldn’t say such a ridiculous thing.
loading....
do they require 11 years of post graduate training? “little” is relative. it’s not just training, but training in the right field where supply is low relative to demand. i have no doubt that a great librarian and a great police officer require a lot of training- but can someone else fill that job at the same price? that’s what sets a salary. a phD in english might be a lot of training, but the salary is still relatively low because there are too many and what they do is not in high demand in a money making field. a phD in biostatistics, however, can be very lucrative in some areas. it is great if my english-loving friend wants to teach college composition, but she can’t demand a higher salary in a field where she knew she was not at an advantage on the supply/demand list. it’s called capitalism.
loading....
How about this: Becoming a lawyer requires less training than becoming a doctor but the same or more training than becoming a lawyer, hedge fund manager or consultant. Thus invalidating your ‘ those are low paying jobs because they require little training or background knowledge for many people to fill
That is NOT why they are low paying jobs. They are low paying jobs precisely for the reason Shari stated in the comment you replied to – because education and public safety are undervalued – and her question was why they are undervalued.
loading....
your comment about lawyers came out wrong, but i think i got your point. i have a lot of friends who are lawyers and they ARE coming up against the supply/demand problem. for a law job that requires few hours and little extra training the salaries are dropping due to an oversupply. my friends who make great money in law work 120+ hours a week getting “training” in the form of an associate position at a big firm. their salaries are also dropping. i strongly recommend not going into law right now unless you are willing to commit to a ton of hours. ditto for consulting.
why are they undervalued? because those with money who pay taxes don’t feel at this time that they need to pay more police officers. judging from my experience with the police, their clientele is primarily poor and doesn’t pay their salary. you have to be a value-added job to get a pay raise. my favorite boss was a high school only graduate mogul in Hollywood. his first line of every meeting was “how much money have you made me lately?” he fired people on the spot based on their response. how much has my librarian made me lately? well, not a whole lot. should i pay her more? eh, let’s not.
loading....
Dear Capitalism:
My life is not a commodity. Neither is yours. You can’t gamble with your life the same way you trade cattle futures.
loading....
You need a master’s degree to be a librarian. My husband has had constant ongoing training since he started his job. Not exactly low-skill jobs, either of them, but people’s perceptions of them is perhaps a large part of the problem.
loading....
The only thing companies care about is money: how much you can make for them, how much you can save them.
The more you can show how your skills can positively affect a company’s bottom line, the more you will be paid.
loading....
You’re changing your original argument, CD, which is that those lower-paying jobs like librarian are lower-paying because they don’t require the intense training of SOME higher paying jobs. Librarians generally need master’s degrees, for one thing. So which is it that you’re claiming – that they’re jobs anyone can do with brief training, or that they’re not profitable for the boss?
I believe early-childhood education in particular is really undervalued in this country (U.S).
loading....
Yes I did change my argument, or shifted it’s emphasis anyway. I actually do read replies and think them over and sometimes change my mind. I think she had a good point- what you train in is probably at least as important if not more important than the length of training. you need to find a way to make yourself irreplaceable and value added. part of that is choosing the right field- one with growth and money. the other is getting enough training to be very difficult to replace. many librarians do have masters degrees and that is a significant amount of training- so in this case it’s more that your job is not value-added enough to qualify for a higher salary or there are too many similarly qualified people who can take your position at the same salary.
We could get into a very complicated debate about why it is hard to pay teachers more based on how much value they add to a child’s education. Certainly a great teacher is worth her weight in gold and I think a good number of parents, given the option, would choose to pay for her skills. But how do we sort the gold from the chaff? The seniority system of payment in the education system and I believe (Although i admit that i do not know) police force is a contributing factor. You could make a strong argument that this insulation of the education system from the natural forces of capitalism contributes to the low pay and lack of prestige of teaching, but I will leave that debate for someone with more energy and time.
loading....
@CD
“so in this case it’s more that your job is not value-added enough to qualify for a higher salary or there are too many similarly qualified people who can take your position at the same salary.”
I think this is a basic misunderstanding of how most salaries get site. Your theoretical free market only exists in theory. The real market in which these decisions are made is not that rational or fluid.
loading....
I hate to link to my own material but it is entirely relevant to this comment:
http://makemeahypocrite.blogspot.com/2010/12/why-athletes-and-movie-stars-are-paid.html
I wrote that a while back, explaining why movie stars and athletes are PAID more, yet we VALUE the contributions of teachers/firemen/policemen more.
It boils down to being able to sell your services to a large number of people. A teacher can provide a $2000 education to 25 students, but an athlete can provide $0.50 worth of good baseball to 40,000 people 162 times a year.
$2000 education vs. $0.50 baseball game. One is worth more, but the paydays are different.
Food for thought…
loading....
The tone of this comment is exactly on point. You made a decision (to work in a low paying career) for a reason (you love the work) yet still complain that you don’t have much money. I’m reminded of a Carlos Mencia line about overweight people that are unhappy with their weight. He said, “Be fat and happy, or lose weight.”
You said yourself you could make more money if you wanted to, but other things (having a job you love) are more important to you. Great! That’s awesome, and you are better of than most because of it. But you can’t have it all. Why be unhappy about having less money when that was a choice you made (a choice, btw, that others don’t have)?
loading....
She’s not complaining! She’s pointing out something that’s become a systematic problem in our society – that people are slipping backwards, despite doing everything ‘right’.
loading....
But she is not doing everything “right”. She is taking a calculated risk by accepting a lower-paying job in exchange for more enjoyment from her work. There is nothing wrong with that, I plan to do so myself one day, but call it what it is: she is essentially “paying” for the luxury of a job she loves going to. With her stagnant wages, that luxury is costing her more and more each year. It is a cost-benefit analysis she is making for herself, not a systemic problem with society. She said herself she has the option to make more money if she chose to. There would be a problem for people who lack that option. We can talk about those folks one by one, but her case is not an example of a systemic social problem.
loading....
This isn’t a matter of ‘she’s not making a lot of money, but it’s a trade off for doing something she loves’
This is a matter of wages in many government positions being frozen, benefits cut and employees forced to take mandatory unpaid furloughs (which are actually equivalent to pay cuts, rather than simply frozen wages)
And it’s not just government positions – I know many, many people who work for private industries who have had raises frozen for one, two or three years. Meanwhile their healthcare premiums are going up. That is the problem I’ve been talking about.
loading....
Dear Shari,
According to these ideologues, you are stupid, because if you had a “rich person lookout” you would pursue a different job.
You see of course the perverse logic of that. If everyone was “rich and therefore virtuous,” then nobody would work for anybody, nobody would do anything, nobody would jump into a building when it’s burning and nobody would take care of the sick and the old. Nobody would cook meals and tend bar when the rich take their vacation. Nobody would shop for food either, or transport food. Nobody would grow crops or raise cattle. Nobody would embalm and bury anybody when they die, either.
Wonderful, isn’t it? If everybody was rich, there would be no problems, nobody would ever die, and we would be happy all the time.
loading....
El Nerdo, you rock. Well said.
loading....
On a matter like this of adjudicating causality, it helps making a distinction between what’s ‘necessary’ vs what’s ‘sufficient’.
Seems to me that many of the “rich” traits–and I stress many, not all–are necessary, but not sufficient to become rich. What provides the extra oomph to success are essentially random factors: pure luck, timing, parents, and many others owing the general zig & zag of life. Many here have alluded to those.
One can imagine a community of dead logs floating about the sea, among which a virtuous minority makes it to a nice little deserted beach where they can spend the rest of their ‘lives’ (=rich). Contrast with other logs who were not quite as “successful” because they got bashed against rocks, broken in pieces by the surf, eaten up by microorganisms, not big enough, or just not fortunate enough to end up on the right current to end up at the desirable beach.
Yes, some of the “successful” logs’ inherent factors such as being a big, strong, with slightly better constitutions, a better starting point, and a plethora of other initial circumstances will definitely help (=traits), but not by themselves determine that they will reach the nice little beach.
One can also easily picture the dead logs in the desirable beach holding a big self-congratulatory party talking about how they just worked harder and were “better” than the other lazy logs who just couldn’t make it to the beach. They look around themselves and rightfully notice they’re all big, strong, and arrived from the same direction and current as the others. So, they figure, those factors, BY THEMSELVES, determined why they are successful and who they are. If only all other dead logs would just emulate them.
(due credit to Rush’s song ‘The Trees’ in which a similar concept is explored)
In short: hard work, effort, and some of the other factors matter for the most part, but they’re not sufficient. On the flip-side, when someone is poor it *may* just be that they’re being carried by the wrong current.
loading....
Wow.
There are some serious blame-the-victim issues in this post.
Reminds me of when people tell me I can cure my depression by just “thinking happy thoughts!” It’s not that easy, but unless you’re been that in position before, you just don’t get it. This is the same – you aren’t going to get out of being in poverty with just a “good attitude.” There are structural factors which make it difficult.
loading....
Wow…quite the reaction. I definitely disagree it’s a mindset or thinking that makes people wealthy or not. Way too much is defined by circumstance and genetics.
The marshmallow tests that show kids at 3 years old who can practice self restraint being successful as adults while those who can’t are unsuccessful kind of came to mind when I read this, anyone else? I think this trait is somewhat inherent, and therefore genetic.
I come from privilaged family, went to great schools, had full time live in help, I’m white, male, and over six feet tall. Does this help me advance in corporate finance? Um. Hell yes. Is that fair? Not in an ideal world, no. Everyone should have an equal chance, regardless of where they were born and to what parents. They didn’t choose it. But it’s not the case, and may never be.
So genetics and circumstances(luck?) can explain rich versus poor in many cases.
For the things that are up to the individual; I do run into this with my friends. They’ll explain that I’m “lucky” that I live so close to work or that I can go to the gym on my lunch break….when luck has nothing to do with any of those things. Or lucky that I have a good job when I got my Masters and worked my way up the totem pole by putting in huge hours, taking night classes, and being a reliable employee. Nothing of that is luck.
And sometimes I think that people DO blame luck for their situation when it doesn’t apply; really what they call bad luck is really just laziness and lack of motivation to improve themselves.
Of course, this is far from a universal truth, and moving between classes is much harder than it should be if it were just up to hard work and “postiive thinking”.
loading....
Are going to the gym at lunch, or living close to work, make-or-break career moments that were pivotal in your success? I think one can’t minimize the advantages of going to the best schools and, per your words, coming from enough family money that you had live-in help.
There are plenty of poor people who work back-breakingly long, hard hours; the benefits of coming from a fortuitous starting point cannot be overstated, particularly with networking, knowing the “right” way to act, and the like.
loading....
“Are going to the gym at lunch, or living close to work, make-or-break career moments that were pivotal in your success?”
Actually, in a way, yes. Not sure if this was a rhetorical question. Living next to work means I can work an extra 2 hours a day and not have any commute, and not sacrifice any more free time than a person who lives an hour away by train/subway/car/etc (Toronto has notorious bad time). Going to the gym at lunch when the other C level people do means networking with them, as well as I am in good shape which improves my appearance which sadly does help my career–fair or not.
“I think one can’t minimize the advantages of going to the best schools and, per your words, coming from enough family money that you had live-in help.
There are plenty of poor people who work back-breakingly long, hard hours; the benefits of coming from a fortuitous starting point cannot be overstated, particularly with networking, knowing the “right” way to act, and the like.”
I agree with you 100% here. It’s a huge advantage that rich people are born into and poor people are deprived of…and in an ideal world it wouldn’t exist. We’d live in a 100% meritocracy where rich people are rich because they work hard and are creative hard thinkers. We’ll probably never get there but we can strive for this by rewarding hard work and creative thought and NOT rewarding lazy people and stupidity that is brought on by not wanting to learn.
loading....
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.
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.)
loading....
The point you make about education is a real factor. This is why immigrants are often successful, that they either arrive with a great education or they make sure they or their kids get one just as soon as they get to the US. That’s why the current conversation around how useless a college degree is really bugs me.
Maybe for that one outstanding Steve Jobs genius its useless, or someone who has resources to start a business at a young age, but if you are trying to move out of poverty, or even from the lower middle class to the upper middle class, a college degree it is essential. Even in the Great Recession, whether or not you have an advanced degree is a better predictor of how well you are weathering hard times than any other metric.
That’s also why solving the student loan issue is so critical.
loading....
Native born citizens have higher education levels than immigrants.
Level of education : native-born compared to immigrant
loading....
The link between peoples earnings and their parents earning is higher in the USA than in many/most western industrial nations.
See : Intergeneraitonal Social Mobility Across OECD Countries example Figure 5.1
and
Understanding Mobility in America
“By international standards, the United States has an unusually low level of intergenerational mobility… Among high-income countries for which comparable estimates are available, only the United Kingdom had a lower rate of mobility than the United States”
loading....
Amazing push back against this post. What if we changed the wording and remove the trigger words. Would that make it more palatable? Something like:
More successful people believe: “I create my life.”
Less successful people believe: “Life happens to me.”
More successful people believe they must be generous.
Less successful people believes they can’t afford to give.
More successful people are willing to promote themselves and their value.
Less successful people think negatively about selling and promotion.
loading....
As a thought experiment, I replaced rich with artist and put this in an art context.
1. Successful artists believe: “I create my art.”
2. Successful artists play the art game to win.
3. Successful artists are committed to being good artists.
4. Successful artists think grand.
5. Successful artists focus on opportunities.
6. Successful artists admire other good and successful artists.
7. Successful artists associate with positive, successful artists.
8. Successful artists are willing to promote themselves and their value.
9. Successful artists are bigger than their art problems.
10. Successful artists are excellent receivers.
11. Successful artists choose to get paid based on results.
12. Successful artists think “both”.
13. Successful artists focus on their artistic worth.
14. Successful artists manage their art skills well.
15. Successful artists have their art works work hard for them.
16. Successful artists act in spite of fear.
17. Successful artists constantly learn and grow.
Seems like a good blue print really.
loading....
Successful artists are artistic. I can hardly draw a stick figure.
loading....
As an artist, I can tell you that I do everything on your new list, and am STILL stuck living under the poverty level. Why?
Two reasons:
1) Successful artists need a steady stream of customers willing to pay reasonable prices for art (and most people aren’t willing to pay for art).
2) Successful artists need to have a natural knack for art that makes them more skilled than the thousands of other artists competing for the small amount of money people are willing to spend on art.
Without the above two, you could do everything on your list, and STILL fail (and trust me, I know literally dozens of talented artists who tried hard, did everything on the list, and still failed due to the economy and over-saturated market, and are now forced to try to learn another skill).
Heck, even the President of the United States isn’t willing to pay for art. He is holding an ART CONTEST to get promotional posters for “supporting American jobs”. The “winner” gets their art signed by him. That’s their prize. No money at all for their hard work.
barackobama.com/artworks/creative-brief
In other words, by using art in your example, you’re only proving how Eker’s points about the rich and the poor is largely incorrect.
loading....
1)most people aren’t willing to pay for art…
I agree that many people HATE to pay for art or anything creative. They think it’s effortless. These are people who would never pay for your art anyway.
I have also see a movement where the wise artists are not giving their art away. Their mind set is “I have a quality product and you want my quality product, so we need to negotiate what is a fair amount.”
2) Successful artists need to have a natural knack for art….
Nope. Don’t agree with that. Success in art is a combination of mind numbing amounts of practice and self promotion and yes, some talent and luck. Too many struggling artists seem to obsess over the talent part.
So going back to the original topic, too many “not rich” people seem to obsesses over luck and not enough on skill and promotion.
As an artist, do you feel you are owed something for being an artist, for creating the art you create?
loading....
Would you say that successful plumbers need to have a natural knack for plumbing that makes them more skilled than the thousands of other plumbers?
loading....
John,
You just completely dismantled your original argument in this reply.
loading....
Both these lists present false dichotomies, so arguing their accuracy seems like a waste of time to me. I don’t find the lists offensive, just stupid.
loading....
Anyone seen this rags to Starbucks essay?
http://www.chinahush.com/2011/10/25/i-fought-for-18-years-to-have-a-cup-of-coffee-with-you/
J.D.’s note: I love this. Thanks for sharing.
loading....
I recently moved from the Midwest to San Francisco where my mix of friends has definitely changed. One of the biggest adjustments for me has been relating to my new friends here who grew up with significantly more money than I did. In the Midwest I felt like I was on the same wavelength with my friends because we all came from similar financial backgrounds. Therefore for me the difference between the rich and the poor is the rich have the ability to make decisions based on the here and now worrying less about compromising their future because their financial future is more certain. The poor are more risk averse and are more likely to make decisions based on the possible negative implications those decisions could have on their future.
loading....
That children are plentiful/cheap and often unplanned, vs cherished and planned for.
That bosses should take personal circumstances and factors outside of work/office into account when it comes to deciding pay, vs solely merit-based decision.
My two observations.
loading....
WTH? Bosses should take personal circumstance into account rather than merit when decided on pay increases/promotions?
You cannot be serious… can you?
loading....
I think eemusings is saying that there are two more factors between rich and poor.
1) Poor People have unplanned kids. Rich people have planned kids.
2) Poor People often have the bad luck of being at jobs where their bosses show favoritism based on someone’s outside merits (ie: boss’s son gets the promotion because he’s the boss’s son, friend of the manager gets the raise because he’s the manager’s friend, etc) whereas Rich People work jobs where promotions are based on solely on Merit, so “working hard” actually does get them further.
Not sure how true the above is, but that seems to be what eemusings was saying.
loading....
I take the lists as indicating things that a person could actually do to improve his or her financial situation. As such, they certainly are true! We can’t do anything about bad luck, but there ARE things we can do that WILL help out our personal finances. Changing out mindset is one of them.
How are the lists different than teaching people to change their thinking to “make do or do without”, “pay yourself first”, “stop trying to keep up with the Joneses” and other crucial mindsets of frugal living?
Being frugal and shopping at a warehouse club won’t make you super rich–but it will definitely help your financial situation. We talk about frugal living on this blog all the time and everyone apparently approves of it. We even discuss people who still have cable TV and buy stuff even though they have negative net worth, and we talk about how they are making poor choices and they should change what they are doing.
So I don’t get all the problems people have with the lists.
loading....
Horatio Alger lives!
loading....
Yeah, anyone who believes actions are important is just another Horatio Alger! I’m no longer responsible!
loading....
I agree with J.D. in the original post that Smith’s list doesn’t cut it with me somehow, but I have to say that Eker’s 17 points of what constitutes a “poor” mindset make an astonishingly accurate list of my mother’s attitudes towards life. She was financially poor and carried a poverty/victim mindset all her life, despite having a college education paid by her parents (in the 1940′s), gainful employment, and a middle-class lifestyle (that sank to the poverty line after her parents died and we children came along).
I agree that neither Eker’s nor Smith’s points should be used to explain or blame people for financial hardship. But I also see the point about how holding onto those mindsets contribute to keeping you there.
So no, this post didn’t offend me; actually I thought it was intriguing. The most difficult posts are the ones that contain some truth or are true some of the time without being universally or always true. I think this is one of them.
loading....
“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.”
“The harder I work, the luckier I get.”- Samuel Goldwyn.
That said, you have some shallow, envious and bitter 99 Percenters reading this blog.
Keep up the good work!
loading....