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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This is unecessarily contetnious and very congratulatory to rich people. In fact, most of the habits ascribed to the rich are actually opportunities which you can only take advantage of once you’ve covered your basic needs already. It’s pretty easy to change your orientation to money and wealth once you’ve had your first crack at getting some. Until then, financial conservatism actually is your best – or only – strategy.
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Sure, but the actual cost of real basic needs is quite low. Some people live on next to nothing, even in the U.S., and if you’re living in someplace like Mexico it’s even less. Most apologists for the poor seem to take it for granted that there’s a minimum lifestyle they’re entitled to. I don’t think so. Live on less than you make, invest the difference.
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I think Malcolm Gladwell’s Outliers is a great complement to books like Smith’s and Eker’s. Gladwell doesn’t discount the notion that personal mindset (or work ethic, etc.) contributes to success, but he also believes that external social factors play a large role. And he backs up his assertions with a LOT of data. I think he addresses the issue on a much more complex, realistic level.
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Excellent point. Outliers provided a good deal of evidence that success – in ANY endeavor – is a combination of two things:
1. Hard work and “directed practice” – spending hours to refine and improve abilities
2. Accumulating a series of small advantages over time, which allow you to leverage (1) to become successful
One of the major examples given was that a significant number of professional hockey players were born in the first 3 months of the year, because December 31 was the cutoff for age-based youth hockey leagues. The players born just after the cutoff point were effectively a year older than the “same age” players born in December. As a result, they were bigger, stronger, faster – more “talented,” and as a result they got more ice time, more practice, more attention from their coaches, which all accumulates over time to result in a sizeable advantage.
The same can be applied to finance. Coming from a family that is better off gives you an small advantage (they are more likely to be financially intelligent, push for college education, etc.) over someone with lesser means. The quality of education you receive, and whether value is placed on education, is another advantage. Over time, you can be caught up in a vicious (or virtuous) cycle where your advantages breed more advantages, more opportunities, more success. Hard work is required to leverage those advantages, though. Someone who is born into different circumstances isn’t necessarily doomed to failure, but they have to overcome the absence of the advantages others may already have, so it’s more difficult.
Putting a different analogy on it, it’s always impressive to score a touchdown, but when you start at the 50-yard line and someone else starts at at their own 10, the amount of effort required to get there is a bit different.
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Eric, your response is my thought to chew on for the day. While I was aware of the problem of cumulative advantages, I’d never heard it expressed that way and it totally clicks. I especially like the point that success is an upward spiral that moves back and forth between hard work and building on advantages; it’s the back and forth between these two points that allow the climb. That totally explains to me J.D.’s original post about these lists and how I feel about them. I haven’t read Outliers (but it’s now on my to-read list). Thanks for posting.
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Hey, here’s another distinction:
Millionaires inherit lots of money. Poor people don’t.
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I’m a millionaire. I inherited $10K from my mother. I earned, saved, invested and avoided debt. I did not go on expensive vacations and I drive a 17 year old Nissan.
The most I earned in a year was $78K. Last year I made $45,000 (including investment income).
Don’t be a dick. Most millionaires don’t inherit it.
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Don’t be a dick?
Good retort. Produce facts next time, idiot.
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80% of millionaires did not inherit their money, they made it themselves. Smoke on that fact idiot.
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You’re the only person here that sounds bitter. Calm the f down and enjoy your money! LOL
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Everyone has an opinion, let’s not take anything personally or put out any personal attacks. It makes for unpleasantness.
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Only 10-20% of millionaires inherit any significant amount of money. So the vast majority of the rich did not inherit their wealth. Some rich people certainly did get there by inheriting of course, but most don’t.
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Not true. Very few wealthy people in the US today have inherited their money. The people that inherit usually end up spending it, not making it last for a lifetime.
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The good news is that it is never too late to cultivate a change of mindset. SInce the difference between the rich and the poor is money, that more easily achieved compared to living a happy life.
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Good article.
“The more I practice, the luckier I get.” Gary Player said. We cannot continue blaming our family, our background. Infact if life gives us lemon we should make lemonade(atleast try).
If we try to backtrack why rich and poor differ one of the most important way would be their thinking. The rich and poor differ in their thinking just like man and woman, parent and child.
Few of the statements were also mentioned in Rich Dad Poor Dad.
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In my opinion:
I honestly disagree on all the statement above why? cause didn’t they know that the poor people can think bigger than the rich one? or haven’t they think that maybe why rich get richer cause we have something to call poor? or haven’t they think that maybe rich people get richer through the help of the poor one?. Poor people can always stand up when they fall and never afraid to fall again but rich really the one whose afraid to fall.. Not all poor people can think the way the author wrote it down and not all middle class had the limit for them selves to reach success
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One of the interesting thing about the lists is that “poor” and “rich” are defined only by the reader.
I think it’s possible for one person reading the lists to think of themselves in the “poor” category, while another person with exactly the same income/networth to think of themself in the “rich” category.
For example, my ex-husband was in exactly the same career as me and had the same income as me– we were each making around $100K/yr. When we were married, I felt that we we were lucky to have good jobs & I felt “rich” because we could afford to buy a house, have kids, take a vacation now and then, and put some savings away and plan for the future. In contrast, he constantly felt “poor” because he wanted to live like the gastroenterologists he worked with who made 6 times what he did. According to him, we didn’t own a big enough house in a nice enough neighborhood. We needed much fancier cars, we needed to “live large” and throw lavish parties, collect fine wine, & etc. And yes his mental mindset was very very close to that of the “poor” on the list, while mine was & is closer to the “rich” on the list.
We split up 5 years ago and the divorce split all our assets down the middle and we each got half. 5 years later I’m doing well (& I still feel very fortunate and yes, “rich”, because I feel like I have plenty of money to live a good life by my standards) while he’s broke as a joke and in debt up to his ears with a supermortgage & HELOC on a mcmansion, car loans for 2 BMWs, huge amounts of credit card debt, & no savings. AND he’s still complaining about not having enough money!
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“One of the interesting thing about the lists is that “poor” and “rich” are defined only by the reader.
I think it’s possible for one person reading the lists to think of themselves in the “poor” category, while another person with exactly the same income/networth to think of themself in the “rich” category.”
This is SUCH a good point, and I think the key to many of the responses.
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The USA is becoming more and more of a caste system. A change in your outlook on life is not going to create as much change without systematic changes to support social mobility.
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“What an ungrateful attitude. The rich don’t have to give anything!”
Neither do the poor. And yet, the poor give a larger percentage of their income to others.
The real difference between the rich and poor? The rich have a lot of money, the poor don’t.
These book lists are an attempt to attribute that difference to the character flaws of the poor. That fits the audience for self-help books whose readers want to believe that wealth is a reward for living properly. But you could easily make a lot less positive list and apply it to the rich:
The rich are good at manipulating others
The rich only look out for themselves
The rich use friends to help them make money
The rich only care about money
The rich think rules are made for others
The rich think the only real rule is don’t get caught
The rich don’t care what the consequences are for others
The rich are ruthless
The rich think they are better than others
The rich believe they deserve whatever they can take
The rich think others are “losers”
The rich put the blame on others
The rich use others
The rich are dishonest
…
That list is as true as the lists above and as untrue as well. It applies to some rich and not to others. Just as the lists above do.
In short, wealth is not a measure of character, its a measure of money. There are a lot of ways people accumulate money some of them commendable, some not.
Bernie Maddoff was a crook and eventually violated the “don’t get caught” rule. But he apparently had all those positive attributes you see on the lists above and was very successful for a long time. Was he rich because he was dishonest or because he “thought big”. The answer is both.
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I wish I had data to back up my hunch, but the Bernie Madoffs of the world (anyone who acquired wealth dishonestly) have to be such a small subset of the “1%”.
I always saw the “rich are dishonest” meme as a way of rationalizing why oneself is not rich. “Look at that fat cat in his BMW, he must have stolen and cheated his way to the top. But not me. I’m an honest guy! I could have just as much if only I was a liar and a crook, but I have too much respect for myself to sink that low.”
It is just too hard for some people to imagine that certain people provide a lot more value to a lot more people and are paid commensurately.
Gross generalization? Yes. Doesn’t apply to everyone. But no more of a generalization than you have to be some slick-talking, selfish, lying, schmoozing son-of-a-b to become a made man.
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I can imagine a world where people make more money due to just compensation for the value they produce.
Based on the data, that’s not the world we live in.
What Bernie Madoff did was illegal. But most of the fleecing of regular people is legal. As an example, I saw an interview with Ellen Schultz on her book “Retirement Heist.” She explained that pensions in the United States were doing great. They were actually overfunded. But then executives started lobbying congress to change the rules protecting those pensions. The protections eroded, they dipped into pensions for other purposes and screwed over hard working Americans who don’t have armies of lobbyists.
Its the same situation that played out in our financial sector and ended up creating our mortgage crisis and subsequent economic meltdowns. The people at the top lobbied for looser regulations and then gambled that housing prices would keep going up. They’re still being compensated, but they didn’t create value.
Here’s a chart showing the difference in US and other executive pay:
http://media.economist.com/sites/default/files/cf_images/20080614/CWB450.gif
Do European countries create less value than US companies? Hardly. In 2010 Europe had a larger GDP than the US and their exports as a percentage of GDP are 3 percentage points higher.
It’d be nice to live in the ideal world where the value we contribute to society is proportionately rewarded. We’re not there yet but it is something I would like to work towards. We can’t work towards it if people insist we already live in a world where income==value produced and then find ways to rationalize how the rising incomes of executives means they’re creating more value.
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AMEN to that!
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http://www.monbiot.com/2011/11/07/the-self-attribution-fallacy/
To add more fuel to the fires – I think the lists are valulable – but this article defintly deserves a read – it has some cold hard facts about whether or not certain personality traits are unique to the wealthy
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This was a thought-provoking post that made me take a look at my own attitudes. I am glad you posted it.
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BTW, I think a lot of millionaires would call themselves middle class. If you accept the rule of thumb that you can spend 4% of your retirement savings annually, a million dollars in savings would only give you $40,000 per year in income. If that savings is in tax-deferred accounts make the appropriate adjustment for taxes. That is not going to buy you a lavish lifestyle.
“wish I had data to back up my hunch”
But we don’t have any data, only our prejudices based on our own experiences.
“no more of a generalization than you have to be some slick-talking, selfish, lying, schmoozing son-of-a-b to become a made man.”
Which was my point earlier. But isn’t the other question whether being a dishonest “slick-talking, selfish, lying, schmoozing son-of-a-b ” a bigger advantage than being “hard working” or “thinking big”?
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“Hard work is required to leverage those advantages, though.”
No, it isn’t. Hard work is just one way to leverage those advantages.
The issue is not whether working hard is a good thing, but whether wealth is an indicator of hard work. It isn’t. There are plenty of poor people who work very hard and there are plenty of rich people who don’t.
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Unless one of those advantages is “large trust fund” or “nepotism”, yes it does. I agree that wealth isn’t an indicator of hard work – everyone has their favorite anecdote about some yahoo who inherited their parent’s fortune or is a vice president at the company Daddy (or Mommy) founded. That’s not success, that’s winning the genetic lottery. Hard work is a necessary but not sufficient condition to be successful. Anyone who tells you otherwise is trying to sell you something. Conversely, anyone who tells you hard work is the ONLY thing you need to be successful is trying to convince you that it’s YOUR fault you’re unsuccessful. I could be the hardest working guy in sub-Saharan Africa, but that by itself doesn’t put me near the place that simply being born in a first-world country did from day 1. Advantages in and of themselves can result in wealth if you start far enough down the path, but I was referring to success as mastery of a field – think Olympic athlete, not trust-fund baby.
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Now that I re-read both lists, I think what many have problem with is a word “poor” (poor people) in top list. Unlike JD, I got more fuzzies with Smith’ list because it talks about middle class. And honestly, I can sign my name under most of those points, being a middle class who will likely never climb into seriously rich. I did get into middle from poor but avoiding most of the “poor” mentality – those some that don’t cross-over with “lower” list. Interesting how it is. Just an observation.
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I noticed the hot button words seem to cause problems too. What if we swapped in “More Successful” and “Less Successful”?
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It’s easy to make successful and not successful work because they have no agreed-upon definition – so the traits are actually used as the definition. So there’s no conflict with the values attributed to them.
However, while rich and poor are marginally subjective (how much money does it take to transition to rich?) they’re still attached to a money-based definition, rather than a potentially trait-based definition. So you DO get conflict when the traits don’t match the category, which they won’t, because they’re not factual.
(In other words:
Successful people believe: “I create my life.” Unsuccessful people believe: “Life happens to me.””
If you believe “I create my life,” you are *automatically* successful. Because we don’t have another definition of the word, unless we say “successful in this case means xyz” – in which case it’s just as wrong as …
However, in the case of : Rich people believe: “I create my life.” Poor people believe: “Life happens to me.”
If you believe “I create my life,” are you necessarily rich? Is it even more *likely* that you’re rich than poor? Sadly, no.)
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I live around a lot of poor people here in Philly, and I think the main difference between the rich and poor is their understanding of how money works.
Mainly, the poor don’t realize that the more money you have, the easier each additional dollar is to get. That hump they have to get past to make it to the point where they’re impressed just seems too much. They also seem to think it’s a reflection of intelligence, such that they’ll never get rich if they’re not smart. Which of course just ain’t the case.
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Was it legal to package something you called “liar loans” into bonds and sell them as AAA safe? Maybe, but if they had been selling fake diamond rings, it would have landed them in jail.
“Hard work is a necessary but not sufficient condition to be successful”
Hard work is not “necessary”, there are plenty of successful people who do not work hard. They are good at getting other people to do the work for them. Or they take huge risks. Or they cut corners. You can’t win the lottery without a ticket, but you can be rich and successful without hard work.
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I think part of the problem is the terms “millionaire” and “middle class” in the second list. By usual definitions most professors are middle class and certainly don’t believe that learning ends with school and the same applies to most other professions. And OTOH a millionaire literally is someone with a million dollars net worth which isn’t a huge amount of money anymore and includes many older middle class people.
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I absolutely agree that becoming rich is a mindset.I am probably what most of you would consider poor or maybe middle class but I am young and I am determined. Earlier this year I got a big income tax refund like most of us low income do but I took a risk with it and successfully flipped a house. Me taking that risk was almost more than my husband could handle but I was more than confident I would succeed and I did. I could tell that we had totally different mindsets about business. I may be “poor” or middle class now BUT I am young and I WILL be successful in my near future! Its all about the mindset.
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I don’t consider anyone who has money to invest in real estate “poor.”
But good luck to you anyways.
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well you don’t know how much i needed to invest. I bought a twenty five thousand dollar house. I had gotten six thousand back from an income tax return so instead of blowing that money it came out to be exactly the amount i needed for a down payment and closing costs. It wasn’t a lot of money but just enough for me to be able to get the house, i didn’t have any other money is savings i just new a good thing when i saw it. I took a major risk and it paid off…i know a lot of low income people who get huge income tax returns and blow the money on idiotic things within a month…so i do think that there are poor people who can find the money to do it you’ve just got to have the guts
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How much did you make on your flip?
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True poor people rarely get large tax returns. As someone who I wouldn’t consider “poor” (just low income), most of my tax return was spent “blowing” on medical bills.
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It seems to me that those commenting who are offended by the list or who think wealth creation can only be possible if you already have a step up or are lucky are proving the point. By having limited thinking concerning wealth, you can’t ever achieve what the Ecker’s list suggests is possible and your frame of reference doesn’t let you see the possibilities. It requires a change in mindset.
I am living proof that this way of thinking works. I went from poor to rich over a lifetime by a personal commitment to never be poor again. Obstacles were only opportunities to do something differently to get where I knew I wanted to be.
In my career I worked with people and their money. I met with thousands of people and how successful they were with money was a direct result of their attitude toward money. The problem is that we don’t teach financial education in the US public schools because it would empower people the elite in Washington would rather keep under their thumb through financial ignorance. But that’s a whole other topic.
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“I met with thousands of people and how successful they were with money was a direct result of their attitude toward money. The problem is that we don’t teach financial education in the US public schools because it would empower people the elite in Washington would rather keep under their thumb through financial ignorance.”
Right on. 100% spot on.
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These days there are a lot of poor minded people that happen to have a lot of money (billions of dollars in bailouts). This financial crisis could have been avoided if the true rich (the hard working honest types) weren’t competing with the fraudulent rich.
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I was a brick layer for 20 years. When I left home I had a 15 Year old car and one box of clothes. I work 70 hours a week laying brick making 7 dollars an hour and was never paid overtime. I lived on half and saved the other half to invest in real estate. I started by
buyer homes and lived in them while I fixed them up then I either rented them out or sold them depending on what was best. I got married at 22 and am still married to the same great lady. We now own 40 rentals and have started an auction company, a real estate company and just 4 months ago partnered in a
Furniture store. We are creating jobs while people are getting laid off and we rent out over half of our rentals to older people on fixed incomes for alot lower rent then other people because we can. We now have a Net worth over a million dollars and there was no help or easy road. It is not easy to live on 10000 a year with 3 kids, but we were committed. We both came from poor familys and wanted something different.
If you read the book which I did a long time ago and open your mind you will find that many things he says are basic and do work,
If you live on half of your income and save your money then when an oppertunity comes along your will have the means to grab it while those who do not live below their means can only cry about the rich get richer.
Our parents never wanted to set up a budget or cut back on their expenses even though they made a lot more then us now they say that we should give them money to help them pay their bill, but of course they only want our money not our help to live with in their means. We know that someday we will have to take care of them and we will but until they are willing to let us help with their budget they will not get any money from us.
Now that we have are where we are no one remembers the 70 hour work weeks or the back breaking work I did for 20 year. We still do not own expensive cars or homes, but I do not have to work if I do not want to. Now I can spend time with my kids (13, 10, 8. I worked very very very hard to be able to get the time with my kids.
I had no desire to be (RICH), Just wanted to created an income that would continue if I broke my arm or back. I have created many different streams of income, and We now have (ENOUGH). My idea of rich is enough income that will pay my few bills with out having to work if I chose not to.
The True millionare next door does not look like the idea that lower and middle class people think they look like.
A true millionare will look like normal middle class people.
No one knows we are worth a million, because we look and act like middle class people and drive ford and chev. I have no desire to look and act like the fake rich who drive BMW (BIG MONEY WASTE)cars and million dollar homes. We buy our clothes at garage sales and good will stores we buy used cars and still live on 15000 a year.
If you would just open your mind and try to learn instead of feeling sorry for your self and live on half of what you make you might become LUCKY.
If you continue to live to impress the JONESES you will always be in debt and always be poor crying about how unfair it is.
We get (LUCK) because We now have the means and the ablitiy to see a oppertunity and to Act on it instead of watching from the sidelines buried in debt. We also have other people bringing oppertunities to us because they see and know that we can swing them
The media is very good at spinning things to fit their needs. Right now to get the most votes they need to make the 98% feel sorry for themselves so they will vote the way they want. Lets face it alot of people will not live with in their means and the goverment is a reflection of the people. They have alot and we have none that is not fair, take from them and give it to us because we do not know how to manage our money and we need more to blow so we can still be broke.
If the 98% won the lottery they would still be poor, because they would spend it and then it would be gone, but they would complain about the taxes that they had to pay. The (RICH) would invest it so that they would have a continues income for the rest of their life without touching the priciple.
If the goverment cared about the poor people it would be teaching personnel finance in Jr high and high school. The goverment does not want you to learn, because no one would need their programs. Then alot of them would lose their (JOBS)and then taxes for everone could go down.
Please before you slam the book read it. It just might change your life!!!!!!!!!!!!!!!!
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“If the goverment cared about the poor people it would be teaching personnel finance in Jr high and high school. The goverment does not want you to learn, because no one would need their programs. Then alot of them would lose their (JOBS)and then taxes for everone could go down.”
Which programs are you talking about? Federal? Because states are in control of setting curriculum standards, not the federal government.
There are (using this as my source: http://www.nefe.org/NEFENews/PressRoom/PressRelease/PERSONALFINANCECOURSESINHIGHSCHOOLSONTHE/tabid/220/Default.aspx) eight states that “have legislated that personal financial education be either a requirement for high school graduation, or a course that must be offered.”
I’ve recorded them here along with their ranking amongst states in poverty (page from wiki was my source):
7-Utah
12-Idaho
24-Illinois
39-Kansas
37-Georgia
38-New York
39-Kentucky
46-Texas
As you can see, five of the eight states rank in the bottom 25. This should refute your paranoid delusion that the government is withholding the magic bullet for poverty so that it can increase the number of civil service jobs. The non-paranoid-delusional explanation is these programs exist because at one time or another that is what the voters favored and not enough voters want to get ride of them for our representatives to sunset them.
In any case, since you’re so fond of anecdote, here’s mine. My immigrant parents raised me and set a good example by living on less than they earned and earning a phd and masters, respectively. They allowed me to graduate debt free from college and based on their emphasis on good grades and influences/mentors in my life, I choose an engineering degree. I earn a nice amount of money and spend just 1/3 of it on my expenses.
I’m lucky I had the parents I had who instilled their values in me, I’m lucky they were established enough to pay for my education and I could just focus on learning as much as I could, I’m lucky the influences in my life pushed me in the direction of a career that pays well.
What are we going to do with these two conflicting anecdotes? Yours says luck plays no part, its all hard work, mine says luck plays a huge role. How are we going to determine whose anecdote reflects the truth of things?
Well, I’m going to concede that all the lucky breaks I’ve had wouldn’t have meant anything without the hard work I put in. And if you’re honest you’ll cop to where your knowledge of personal finance came from, what inspired your work ethic, that you weren’t born with an IQ of 70, that you came across that book many years ago, etc.
And we’re both going to (virtually) shake hands and agree that BOTH luck and hard work matter.
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thank you for mentioning systemic. i was about to give up on this post as the epitome of classist nonsense.
those who do not think this is classist nonsense, though, tend to think that the alternative is socialism. the fact is that i am happy being middle class, and am uninterested in being wealthy. as such, it is fair for me to make less money than someone who is more invested in that.
that, however, is a completely different conversation. poverty and middle class are incomparable. and poverty is a symptom of societal problems, not individual problems. if these lists had compared rich to middle class, it would be significantly less awful.
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It might be helpful to point out the obvious. There are NO self-made millionaires in the United States. We are all standing on the accomplishments of the generations before us. We inherited the richest country on earth, we didn’t create it.
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What is offensive is that these lists really compare “stereotypical rich” and “stereotypical poor”. Many people in both groups don’t fit the stereotypes. There is another name for applying stereotypes in this fashion, its called bigotry.
You know, trophy wives are part of the ultra-rich too. And Mother Theresa, Dorothy Day and Cesar Chavez were poor. The idea that having money reflects virtue is probably the most offensive part of this discussion.
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My two cents: It all boils down to opportunities (which can be attributed to chance or stature of birth or even opportunities created by one’s hard work) and more importantly, the reaction to those opportunities.
There are elements which you have no control of (chance, stature of birth) and either you get it or you don’t. But the things that you do have control of (hard work, creating opportunity with the hard work, making conscious, informed and deliberate choices), make the most of it.
It is great if I win a lottery, but it would be foolish for me to hope/expect it to happen; downright stupid if I waste the windfall with bad choices.
To quote the Boy Scout mantra: be prepared. Read, talk to (informed) people, actively engage in worthwhile activities – so that when the opportunity does along, you know how to deal with it.
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I think that part of the problem is in part due to the American mythology that we have built for ourselves, namely, that everyone can get rich if they just work hard enough.
Read the following:
http://www.americanprogress.org/kf/hertz_mobility_analysis.pdf
http://www.economist.com/node/15908469
A recent study that just came out concluded that it was much easier to move up in class in Western Europe.
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Check out this book as a resource. Our church and community are using this to help people do what the title says: “Getting Ahead in a Just Gettin’ By World.”
http://www.gettingaheadnetwork.com/index.php?option=com_content&task=view&id=12&Itemid=29
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“If wealth was the inevitable result of hard work and enterprise, every woman in Africa would be a millionaire.” George Monbiot
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The question of where wealth and riches comes from is a fascinating discussion, and I believe can often be oversimplified.
One may argue that relying on historic data to explain that it is “the system” that keeps poor people poor is unfair, in that there are people who have worked within the system to bring themselves out of poverty. Often, this argument leads to the conclusion of “bootstraps,” however, in stating that because one (or hundreds, or millions) of poor individuals have brought themselves out of poverty, than EVERY poor person can do precisely the same.
There are several personal reasons that I think this is a dangerous path to go down, but I think an important piece of reality we all must take into account is that capitalism relies on a section of the populous having less wealth than others. In order to give individuals an incentive to work, you must have something that they do not; money. For money to continue to be an incentive, you must not allow everyone to succeed in attaining all they that desire, and you must also continue to have a labor source that is willing to work in less gratifying and underpaid occupations (eg. McDonald’s employees, janitors, etc) and be able to pay more in order incentivize as well (eg. garbage collectors). Indeed, our economy would not function without these individuals, so it is imperative that we maintain a status quo there.
Additionally, don’t forget that this country was built largely on a practically free labor source, and as such the beginnings of income inequality were laid with a sturdy and legally sanctified base.
For an interesting take on income inequality, its history and its future, I recommend a report that the organization I work for just released (sorry for the shameless plug): http://faireconomy.org/sites/default/files/2012_State_of_the_Dream.pdf
Again, this is a fascinating discussion, and I love reading all of the posts and seeing people talking about wealth and inequality.
Ruth
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86Kyra says:
01 November 2011 at 8:52 am
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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I’m coming in very late, and I’ve tried to read the comments, but like the late posters, only managed to skim and summarize.
I used to believe very much what those lists and gurus say about the difference between the rich and poor. Now that I’ve suddenly found myself below the poverty line, and have friends in similar positions, I know why many are poor. My friends and I used to work good jobs, used to save and invest, used to own homes, used to have high net worth.
What has put us in such dire circumstances now? Divorce and legal bills (minimum $20,000). Not just divorce, but divorce from abusive or violent men. It means we have to sell and move. It means that litigation goes on forever because they abuse through the judicial system. It means that we have to find work after being out of work to look after children. It means that they find ways to financially screw us through all sorts of means.
Does it mean that we STAY in this position? NO – we have the mindset of the rich. But for the moment, and for the short-term future, we will be among the large group of people who rely on welfare payments. NOW I know that sometimes people become poor due to circumstances not of their doing or their choice.
In the end, given what we have lived through, most of us are just glad we are alive. Some of my friends never made it out alive.
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The People who become Rich without having a good family background or Sound educational success, they think they are the people in the society. They don’t know that they bring smile to others.
They are very poor on attitude. Just because of that they are most likely to be neglected by educated people and their society.
Then those rich people got only uneducated or poor people in their life. Then they do everything to be famous in their society. Good luck for them.
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Most rich people aren’t rich because they came up with a profitable way to really change the world for the better. They got rich by coming up with some clever way to do some menial everyday thing in a way others want to emulate because the inventor of a product or “system” is good at convincing people they should do so. Also rich get rich by making others depend on them on a reoccuring basis i.e. refills, yearly contracts and memberships, utlility bills.
Most rich people are rich (even if they were once poor) because they became good at getting the poor and, less often rich, to give them their money for some product or service they could have really done without.
McDonald’s executives are rich because they convince a poor person their food is preferable to fixing an inexpensive home cooked meal.
People feel they need cars today because everyone has one due to being convinced early on in the automobiles history that life was too hard without one.
The people who give their money to these type of rich people fail to see that the world is dying from obesity mainly because of just two types of successful marketing of things not really needed i.e. cars and fast food being marketed as necessities of life.
It really is not as simple as poor and rich but, also stupid and clever at the extereme expense of the easily duped.
Medicine is no exception. Scientists used to be mainly concerned with cures and vaccines. Now, they are concerned with plastic vanity or managing illness through daily meds that aren’t designed to cure and vaccines that need to be re-vaccinated every year for illnesses that almost all people get over naturally withot the vaccine.
Poor people have no right to complain about being poor as long as they buy into the rich telling them they need to fork over their cash for stupid crap like video games, cell phones, cars, i-this and i-thats, get rich quick telemarketers, televangilists begging for faith seed in the form of money tithes, etc. Even utility companies get in on it by convincing people that they must buy electricity and water from them instead of producing it themselves the way people used to do early on in the game.
History could have went in a different direction if inventors made things that truly empowered the people. things like home produced electricity, useful software that doesn’t need a patch to work a week after you bought it and personal water entrainment from the begining but, people let them find a way to keep slurping from their monthly financial soupbowl.
Unless you are extremely wealthy, life will always suck for you if you buy into thinking you need most of what people tell you you do.
People who are self sufficient and smart, even though they don’t have any money, usually don’t think of themselves as poor unless someone else can convince them of it.
Shame on most rich people for cleverly taking money from the poor for needless things and shame on most poor for stupidly giving them their money for stupid reasons.
Poor people really can’t go around asking the rich to give them back money through curved tax scales so they can buy diapers when they gave their diaper money to the rich freely by buying that LCD flatscreen they just had to have or by having to repay that ultra high interest $200 payday loan they just had to take out with the rich money lender so they could get their nails and hair done before they went sportin’ at the mall for new top dollar shoes or to pay their overused cell phone bandwidth bill.
Sorry if this offends anyone but if you just step back and look you will find truthful examples of what I said abound in most families.
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What I was trying to say is that the extreme wealth inequality in the world wouldn’t exist if most people who become rich had some ethics and most people who stay poor quit giving thier money to whimsical things.
There would be a larger middle of the road.
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The same people who speak as if any obstacle is ok to knock aside in the pursiut of becoming rich are the same people who would run over your kid in the street if they were late to a financial meeting.
A lot of wealthy people are rich because they kicked grandma to the curb and a lot of poor people are poor because, when their chance to be wealthy appeard, they couldn’t stand to see their grandma in the street so, they missed their greatest or only opportunity during their life.
Which is to be more admired or emulated?
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Rubbish I must say. When money= power then you are outdone, and in democracy money is non governmental power. For Exampleof thousands of people who campaign angainst cigarettes, they still fail, because the rich have their money to inject lies into the public, and take away your voices. Big tabacco paid hundreds to keep the campaigns that try to reach you daily from anti tabacco places that smoking is bad, ansmoking succeded.
“Money is the power to silence hundreds of voices.” Unanymous.
And while you’ll fall for the lies your being told I have news for all who listen; they ARE lying to you, to keep you occupied and keep you poor, for if everyman becomes rich, then there is no power to “silence voices.
The rich want you to beleive its your fault, not to to look back, so that they can keep their ideas, and luxurious life. Being rich isnt just money, or nobody would care, its the power to steal dreams, silence others, step on others dreams so that you can have a more luxurious life.
“I have spread my dreams under your feet;
Tread softly because you tread on my dreams.”
W.B. Yeats
This will be the story of most of our lives, if we actually do have a sucessful creation, for if you are sucessful you must take it to the rich to mass distrubute, of whom will cheat you off of your chances, the rich must create and claim it, and so you’ll end up like the worker, working on inventions to make the CEO rich.
““There’s class warfare, all right, but it’s my class, the rich class, that’s making war, and we’re winning.”
Another quote that“The few own the many because they possess the means of livelihood of all … The country is governed for the richest, for the corporations, the bankers, the land speculators, and for the exploiters of labor. The majority of mankind are working people. So long as their fair demands – the ownership and control of their livelihoods – are set at naught, we can have neither men’s rights nor women’s rights. The majority of mankind is ground down by industrial oppression in order that the small remnant may live in ease.”
“History is written by the rich, and so the poor get blamed for everything.”
I want you to read this quote. your response could be ” Complaints” but really, who has the power to get writings out, the rich because of their money.
we cant win.
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I hate to break it to you but… The anti-smoking movement fails not because of the rich tobacco companies but because smokers, in general, want to keep smoking and supporting the tobacco companies by buying their product.
You’d be hard pressed to convince anyone that people today don’t know that smoking is bad, addictive and that they probably shouldn’t do it. I mean, it says so right on the package. It’s their choice to start though, right?Seriously, you aren’t one of those people who think they can take people’s choices away just because you wouldn’t make the same chouce, right?
Another reason the anti-smoking lobby fails is that most freedom loving people believe it isn’t their business if other people want to smoke. Sure, some pansies will complain about second hand smoke in a wide open park but then again, don’t most of them toke a little joint behind the outhouse or stoke up a BBQ grill with 100 times more smoke? Be honest now.
This “anti” anything movement, when applied to peoples personal preferences, is just as stupid as people thinking we have a personal or governmental responsibility to take care of people who make bad choices in life. i.e.- smoking, eating fast food, using too much salt or doing drugs.
If your insurance costs too much because of the fat diabetics the market could provide you with an insurance company with lower rates because they don’t allow diabetics to join if the pansies that lobby the government to force insurance companies to take people who make bad health choices shut up.
For example, this would naturally take care of most diabetics problems because responsible diabetics would eat healthier in order to get insurance.
Instead, we have a nanny state health care system that allows people to keep making bad choices at everyone’s expense! It is laughable because in effect, you’re paying people to continue their bad habits.
And.. the only thing the rich want the poor to keep doing is giving them their money in exchange for mostly useless yet gratifying crap.
Sadly, that seems to be the mantra of the poor also.
You seem to be a jealous whiner with a lot of excuses.
Before you call me an elitist or rich person,I’d be willing to wager that you make more cash than me. It is just that I am more content and happy with what I have and probably always will have compared to what most want and probably will never get.
This happy outlook of mine is simply because I am more “awake” in mindset than people, for example, who try to make points by quoting others rather than saying something original on the topic.
Sorry if this offends but, most most whiners who say there is nothing that can be done to change things don’t stop whining and change things untill someone calles them a poo poo spirited whiner.
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Although, most people equate money with power these days, it is because they have been led to believe it is true by people who have the money. The rich use their money like magic to con the masses into thinking they are wizards of everyone’s fate. You know what, As long as you let them, they actually are the masters of your fate! As long as they make you fearful of their power and envious of their lifestyle, you will always be opressed. As long as they convince you that nothing worthwhile in life can be done without money you, my friend, are screwed! (not as much by them but, by yourself)
If the poor really were sick of it, instead of just hiding their envy of the rich in rebellious talk and bravado, they would simply say “no” to the rich by not giving them their money and labor so easily, stop wanting things the rich wizards peddle to them. If the poor would tend to themselves by cutting their own grass and fixing their own clogged drains instead of the rich’s things might change. That will almost certainly never be done though because the envy most poor have for the rich’s wealth, power and lifestyle will always trump their need for true freedom from opression no matter how much they whine otherwise. This is because they fear losing more of the things the rich tell them they have to have. i.e.- the longest, most comfortable life possible while living in physical security provided by a “bully” class goverment that serves only the rich. Ironically, that “bully” class can be rich or poor because all it takes is someone thinking they know better than you or someone that will enforce another’s will for their own gain.
The middle class (police, non-elected officials, teachers, and private management) are usually (while mostly oblivious) used by the rich as enforcers of their policies by dangling the carrot of upward mobility in front of them while reminding them that they can just as easily end up poor if they fail to please their master.
The fact is, true freedom brings great responsibility. Just as much as you may be free to responsibly live well, you can carelessly die free just as quick.
People who say they want true freedom yet would be the first to dial the police when someone tries to break into their home or wait for the city ran fire department to arrive when their kids “easy bake” oven catches fire instead of putting it out themselves are just plain phonies to the whole idea of true freedom, economic or otherwise. They want the benifits but not the responsibilities of being free of tyranical economic and social systems. They cry “freedom from economic and social opression” while ratting you out to the building inspector for not having a hot water heater properly vented in your home or call someone to take away your kid when you don’t parent the way they would. GIVE ME A BREAK!
As long as the poor keep being envious of the rich, there will always be rich people eager to rub it in their faces.
As long as the poor want power not just for their own lives but, also power to “get even” with the rich and “bully class” they aren’t any better than their opressors.
As long as the poor keep watching other poor be bullied around by the “bully class”, and do nothing about it because they fear risking anything, they will always live in fear of bullies that follow the policy of the rich or powerful.
That’s just they way it is folks.
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I feel it depends on the circumstances of wealth and poverty. With the economy as such, many upper- middle class and middle class people have worked hard to obtain comfortable lifestyles (not necessarily loaded, but can take trips, own property and some recreational items). Then their job is ripped away from them. There may be a nice savings but without money to pay for the mortgage and other bills, the savings gets eaten up. Eventually the foreclosure comes. Now, these people feel like big losers though it’s no fault of theirs. This type of poverty is not a result of victim mentality. Then there are those who are hard- working, poor and humble. These are the people who struggle but always want to help those on even greater need. They live in modest homes, raise their kids with wholesome values and take pride in what they do have. You will see the nicely manicured lawns and friendly neighbors. However, there are criminal, uneducated lazy bums who are poor because they lack the ambition to move upward. They are a drain on society and govt. funds. They feel their poverty is a reason to harm and steal from others with more than them. They blame others and just basically suck.
I was raised upper-middle class and I have had many friends from all different classes. Many of my poorer friends are genuine and love people for who they are not what they are.
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And many more of them have the lousy judgment to get really sick. My husband and I would be multi-millionaires if he hadn’t become permanently disabled with chronic fatigue syndrome at age 37. And I have my own autoimmune disease, too.
We did nothing wrong. We have “health insurance.” Yeah. We average $20,000 a year out of pocket.
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I would just bet that most rich people are given access to substantial resources at a young age and most poor people aren’t. That’s the real difference between the rich and the poor, generally speaking: placement into the world at birth, a completely random effect to the subjective experience.
Is there at least a small group of people left in the world that think there are such things as too much and too little? Ho much is enough? I know that having too little can kill you. And competition doesn’t cultivate sustenance, the will to live does… given that one has access to resources. I really think that the average person has forgotten to apply the most basic concept of cause and effect to their thinking about socioeconomic problems. Judgment has become clouded by individual egos and the need to feel important. You were shaped by your environment and so was I. We were both born with a random genetic makeup… to the subjective experience. I think my final recommendation is the creation of a time machine, swapping rich and poor at birth and recording the results over time. Or we could just look at the statistics.
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post is good and one more thing.. Rich people pursue their dreams and are persistent in their efforts. They don’t just dream and stop. They follow through on their dreams until they win.
Poor people on the other hand only dream about their dreams. They have dreams to be rich but then the do nothing about it. They never do anything to change their lives and become stuck in this loop.so stop taking and go work for your dream if you have any ?
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There can be a lot of reasons for why someone is rich or poor, not all of which can be easily explained.
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