While some rich people are obviously rich based on their appearance and the quality of their lifestyle, other people pretend to be rich, living well above their means, spending much more than they earn, living on credit, and slowly burying themselves in debt.
Adding to the confusion, some rich people go to the other extreme and are disarmingly modest.
For instance, two of the richest men in the world, Carlos Slim (with an estimated 2017 net worth of $51.2 billion) and Warren Buffett (with an estimated 2017 net worth of $73.4 billion) don’t live in mansions but in the type of homes owned by those in the middle class income bracket.
But yet, they have what I call the millionaire mindset.
7 ways wealthy people think differently
Steve Siebold interviewed over a thousand ultra-rich people to write his book, How Rich People Think.
Here are some of the differences he discovered in the difference between how a poor person thinks and a wealthy person thinks:
A poor person thinks money is the root of all evil while a wealthy person thinks that you need resources to achieve things in life.
A poor person considers selfishness immoral while a wealthy person thinks that you can only contribute to the welfare of others when you have something to give.
A poor person hopes that they will come into some good fortune while a wealthy person believes that action is necessary to change things for the better.
A poor person has little regard for acquiring expert knowledge while a wealthy person is eager to learn new things.
A poor person reflects on all the mistakes they’ve made in life or longs for the good old days while a wealthy person thinks about what’s possible in the future and engages in setting goals and making plans for a better future.
A poor person makes emotional decisions about money, either hoarding or overspending, while a wealthy person make logical decisions, evaluating the value of things before investing or spending.
A poor person works for a living at a job they hate while a wealthy person focuses on projects that they love.
Mastering your mindset
Although it may sound somewhat counterintuitive, you won’t join the 1% who earn over $380,000 a year simply by going back to school, getting a better job, or saving more money each month.
It’s not that there's anything wrong with this approach; it’s just that it’s premature.
Before taking any course of action, no matter how sensible it appears to be, you must first change how you think.
When you have the right mindset, then everything you do will work out in your favor, and if you’re doing the wrong things, you’ll quickly course correct.
Must-have habits of the rich and wealthy
It takes a special type of person to be an entrepreneur. Successful entrepreneurs are driven, self motivated individuals who can repeatedly fail over and over and not lose any enthusiasm to try again.
Success is stumbling from failure to failure with no loss of enthusiasm.” — Winston Churchill.
Instead, they come back stronger and learn from their mistakes. That’s just one of the many traits an entrepreneur must possess.
While there is no exact blueprint, successful entrepreneurs seem to share a similar set of skills. And surprise – it’s not about putting in 16 hour workdays.
The surest way to get your morning off to a good start is to get in some exercise. You can invest in a gym membership or go out daily for a morning jog.
Physical activity is great not only for your body but your brain. Getting in a productive workout will set the tone for the rest of your day and lead to increased work productivity.
You don’t need to be an early bird to get this exercise in. A quick workout before you start the day or when you need a break from work can do wonders for your energy level.
Networking is crucial for entrepreneurs. It can help you build long term partnerships, set up mutually beneficial collaborations and gain new key introductions. Successful entrepreneurs aren’t afraid to take a day off to attend a conference.
But networking also has other benefits. You can make friends with like minded individuals who understand your lifestyle. You can share ideas, get suggestions, and gain inspiration and encouragement.
Sure there are plenty of workaholic entrepreneurs, but one of the habits of successful entrepreneurs is their ability to take a step back.
Some like to wear their 60+ hour a week schedule like a badge of honor, but what if it leads to a burnout and increased stress?
So before stress and fatigue begin to kick in, step back and take a short 15 minute break. That’s all your brain needs to calm down and re-focus.
Only you know how many breaks to take and how often, but one 15 minute break every hour or two should be enough.
Successful entrepreneurs are never content with the amount of knowledge they possess. The world and the marketplace is always changing so business owners need to always be continually learning.
Here are the reading habits of 4 super successful entrepreneurs:
- Entrepreneur David Rubenstein reads six books per week.
- Bill Gates reads 50 books every single year.
- Elon Musk credits these 12 books for inspiring and directly influencing him.
- Warren Buffet credits reading books as the key to his success.
The entrepreneur life isn’t all about being stuck in the office for days on end. Some of our best thinking happens when we’re not trying to think at all. In order to get the mind to run efficiently enough to allow ideas to flourish, we need to let it unwind a bit.
Here are some of the hobbies of 3 wealthy entrepreneurs:
- Jeff Bezos is currently funding the construction of the 10,000-year clock in the state of New Mexico.
- Elon Musk bought a Lotus Espirit submarine car that James Bond used in the movie The Spy Who Loved Me.
- Warren Buffet plays the ukulele and has had duets with Paul Anka and Jon Bon Jovi.
Success isn’t just going to happen on its own. It requires not just working hard, but working smart.
Entrepreneurs are smart not because they were born that way, but because learning new things is fun.
- When Elon Musk has a degree in physics and economics, but what does he know about flying rockets into outer space? Well, a lot apparently because “he reads books“.
- Bill Gates attributes his success to his desire of always wanting to learn. In fact, he read the whole set of World Book encyclopedias when he was a kid.
There is another common trait people who are successful have – they often give back to their communities. For instance:
- Marc Benioff, founder and CEO of SalesForce created the 1/1/1 Model for businesses of any size to incorporate philanthropy into their business models.
- The Bill and Melinda Gates Foundation does, among other things, help the world’s poorest people lift themselves out of hunger and poverty.
- Mark Zuckerberg and Priscilla Chan founded the Chan Zuckerberg Initiative, which seeks to create a better future for the next generation.
- The co-founders of Airbnb, Nathan Blecharczyk, Brian Chesky and Joe Gebbia, have pledged to give away half of their fortune to charities.
- Steve Jobs quietly donated $50 million to California hospitals to help fund HIV and AIDS research.
To truly build wealth, you need to invest what you earn. Even if you don’t have a lot of money to invest, it’s still a good (and fun) thing to try out. It is exciting to see your money grow.
You don’t need millions to start investing either. You can use a micro-investing app like Acorns to begin investing your spare change. With Acorns, the app rounds up your purchases and puts your spare change to work.
For example, spend $42.63 and Acorns will round up to $43 and invest the $0.37. It doesn’t sound like a lot, but it is a pain-free way to begin investing.
The power of savings isn’t in the amount, but rather how early you invest and how often you continue to add to your investments. When you start early and do it often, you are letting the power of compound interest work its’ magic.
Thinking you are ever going to get rich by working for someone else isn’t the right approach. To become wealthy you need to be the one at the top of the food chain.
The slow lane is 40 years working at a 9 to 5. The fast lane is starting a business, no matter how small. The power in running your own business is that you can automate and outsource most tasks, which makes this income passive.
Look at anyone who is rich and you will always see they took the fast lane to wealth – not the slow lane!
Another rich person habit is to have a to-do list. The wealthy value time, knowing that time is money. They take advantage of their time wisely by always having something to do.
The poor, on the other hand, seem to always complain that they never have any time. Then, find themselves bored half the time.
Millionaires wake up early. That’s because people are most productive early in the morning. It’s quieter, the sun is coming up, birds are chirping. What a wonderful start to your day!
The wealthy wake up early and take advantage of their time, the poor set an alarm to wake up, then rush to barely get to work on time.
Rich people care about their health more than the poor do. The rich count calories, go to the doctor, exercise regularly and eat healthy.
The poor? They eat fast food and sit at home watching tv on the couch.
The rich and wealthy are goal-setters who are constantly pushing themselves to be a better version of themselves.
One key money habit of the rich is to set specific goals – not general ones like “lose weight”. Nope, the rich set goals such as earn X dollars in Y days by doing Z.
The rich read books. But not for entertainment, but to better themselves. Rich people are constant learners, always looking to learn more.
For the rich, learning didn’t end at graduation – but rather started there.
Focus on reading self improvement books. Even reading just 10 minutes per day really adds up to quite a few number of books per year.
The rich take calculated risks to achieve their dreams of becoming wealthy. The poor, on the other hand, are too scared to try something new.
But you will never achieve anything by standing on the sidelines and watching. Get in the game!
The rich abandon consumerism. You know, that silly stuff they sell on TV and those childish games of trying to impress people.
The rich are producers who create things that the poor will consume.
So, want to be rich? Stop consuming and start producing.
You are the average of the 5 people you hang around with. Are they losers? I bet you are too.
If you want to be a winner, get rid of the losers and hang around people who will help you “level up” in life.
5 unmistakable qualities of entrepreneurs
These 5 particular traits are possessed by every successful entrepreneur.
Investors like Warren Buffett are disciplined. Every successful entrepreneur needs to have self-discipline. This is actually the most important trait needed to succeed in business and life in general. When you are self-disciplined and are able to do what needs to be done, whether you want to or not, you’re guaranteed to succeed.
Self-discipline encompasses self-responsibility, self-direction, self-mastery and self-control.
The difference between a successful entrepreneur and someone who fails is that the successful person is able to make themselves do the jobs the failures didn’t want to do.
It’s not like successful people enjoy doing these things. They dislike them as much as the failures. They just make sure they do them because they understand they are the key to succeeding.
Entrepreneurs like Steve Jobs had a clear direction for Apple. Every entrepreneur must have some direction. The market changes all the time and many business owners find themselves just managing day-to-day and just dealing with what comes.
These people get caught up in the short-term because they feel short-term profits and problems are what needs the most attention. They spend so long thinking about the future and making plans that they never get the chance to act on them and move towards the future.
CEO’s like Mark Zuckerberg have persistence. A successful entrepreneur is a persistent entrepreneur. Think of persistence as being one of the ultimate foundations of character. Character is built around and with persistence. It’s a quality that you need in order to succeed in life.
Go into everything you do knowing that you’ll never allow yourself to fail and give up, no matter what. Success is guaranteed when you are determined to keep moving forward despite any disappointment or adversity you run into.
The greatest asset an entrepreneur possesses could be their willingness to persist and keep going when others fail. Persistence is a sign of how much you believe in yourself and how much you really think you can succeed.
Business owners like Bill Gates have integrity. The thing thing every successful entrepreneur must possess is integrity.
Being reputed as someone with absolute integrity is one of the most important qualities you can develop.
You should always be honest in everything you do and never allow your integrity to be compromised.
Successful businesses are built on a foundation of trust. When it comes to business your word is your bond and there is nothing more important than honor.
Whether you succeed as an entrepreneur ultimately comes down to how many people you have on your side. You need people who trust you, will work with you, lend you money and give you credit, purchase your services and products, and be there for you when things get difficult.
As you live your life you develop and foster your character, and who and what your character is depends on how much integrity you have developed and practiced.
Entrepreneurs like Elon Musk are decisive. Every successful entrepreneur needs to be decisive and action-oriented. A good entrepreneur is one who is able to quickly make and act upon decisions.
They are disciplined to make decisions and stick to them. They always move quickly and get feedback about what they did. If a mistake is made they come up with a solution and do things differently next time.
If you want to succeed you need to try. A successful person is someone who is willing to try and do things that other people aren’t. If you give different ways to be successful a try then you will inevitably find your own personal path to success when you are ready for it.
5 best books for beginning investors
Navigating the world of investing can be a daunting challenge for just about anyone, particularly those who are beginner investors.
But learning about investing doesn't need to be a monumental challenge. Luckily, there is a wealth of literature out there for guiding beginning investors.
While they won't tell you what to buy and when to buy it, these books can serve as a guide to help you wade through the muddy waters of being a first-time investor.
You'll find that these books on finance and investing provide tremendous, nuanced insights while also being enjoyable reads.
While some of these books were published decades ago, they have withstood the test of time and the advice offered are still applicable today.
Here's the list of the 5 best investment books for beginners, in no particular order.
Graham is widely regarded as the father of value investing. Famous investors such as Warren Buffet have credited Graham for laying the foundation for them with his ideas about security analysis.
The Intelligent Investor teaches sound, established principles that every investor can use. According to Buffet himself, it is "by far the best book on investing ever written".
The book Think and Grow Rich was, rather ironically, written during the Great Depression. Hill conducted extensive research based on his associations with wealthy individuals.
The book stresses the importance of planning and persistence to increase one’s income, and it makes the argument that people can succeed in any type of career.
Buffett is widely considered the most successful modern investor. In this book, he outlines his views on a wide range of issues which are of importance to corporate America, investors and shareholders.
The book delves into the interaction between a company’s management and its shareholders. It also highlights the thought processes involved in enhancing a company’s enterprise value. It is an absolute must-read for investors.
O’Neil is the founder of Investor’s Business Daily, a financial research and media company, and the creator of the CAN SLIM system.
This book is of great interest to investors keen on stock picking and serves as an excellent blueprint. How to Make Money in Stocks is full of substance and is quite on point and trimmed, leaving out any ambiguities.
This book is recommendable if you are looking for an approachable book that you can apply to your day-to-day investing.
Lynch is well known in the world of investments: beginning his career in the 1980s, he served as the manager of the well-known Fidelity Magellan Fund. Learn to Earn targets a younger audience and focuses on explaining business basics.
Lynch takes a common-sense approach and insists that individual investors can perform just as well or even better than experts can if they adopt a strategic approach to investing.
This book is strongly recommended for younger readers and beginning investors.
4 priceless pointers from successful millionaires
Most everyone that’s successful got that way because they followed a few simple (yes, simple) rules.
You can’t just do something. You have to be something, too. How can you be someone when you’re not successful? Some say “fake it till you make it.”
What’s important is that you see yourself as successful, even when you don’t have a lot of money. Not everyone who is successful in life has money.
You probably already know someone who is living a great life, but who doesn’t own a movie studio or a large art gallery or has millions in the bank.
You’re probably already successful in some area of your life. Use that as your stepping stone – a platform to build further successes.
Many successful millionaires got their start by borrowing money. One of the richest men on the planet, Warren Buffet, started with a borrowed $10,000. So, if you’re strapped for cash, don’t let that stop you. Alternatively, you can try hitting up friends and family.
The important thing is to get started. Find a source of funds you can use and put together a minimum viable product or service. Market it, and you’re on your way.
Wealthy people don’t rush financial decisions. This is partially because they don’t have to. But, it’s also because this is how they became successful. They didn’t make hasty decisions. It doesn’t mean that they always made decisions slowly.
It means they always acted on their best knowledge at the time, were honest about what they didn’t know, and never tried to rush into a business deal just to be part of a business deal. They went after winning trades or businesses because they knew (or had a good idea) that it would be profitable.
5 mental habits that make the rich richer
Never underestimate the power of the mind. A lot of successful people believe that your thoughts can influence the size of your bank account. Below are five mental strategies employed by rich people to make more money. You can try them and see if you can boost your income too.
To rich people money is nothing more than a game. They’re always calculating how to spend and invest. A lot of successful people don’t like losing, so they strive at all times to do better, learn more, do more, and grow.
An average earner might become stagnant career and money wise. You can’t really expect much from a person who goes to work every day just to go through the motions needed to get a paycheck, never really trying to accomplish more.
One thing rich people have in common is that they’re never afraid to aim high, no matter how unrealistic the goal may appear because they have the confidence to go after those goals.
Why are we so scared of setting huge goals? Is it that we don’t have confidence in ourselves? Or are we just satisfied with the little targets and expectations we know we can meet?
You should set big goals in every aspect of your life, regardless of how much they scare you. Learn to see these goals as a challenge. The probability of not meeting your goal will always exist, but what if we try and actually achieve it?
You’ll never know how far you can go if you don’t try. By setting the bar high, you challenge yourself which helps you grow as a person.
For instance, if you set two separate financial goals for yourself this year, one to save up to $1,000, and the second to save $20,000, the two goals have a huge difference. Some might even say the second cannot be achieved.
However, by setting the goal at $20,000, you will challenge yourself, and at the end of the day you might even surprise yourself.
Even if you don’t hit the target, you can come close by hitting $15,000, and or even $10,000, which are all better than the low goal of saving just $1,000. Never be afraid to dream big and reach for the stars.
A lot of dreams have been cut short because of fear. Rich people have succeeded in banishing every trace of fear in order to be able to take on smart risks.
There’s no successful person that does not have a list of things they’ve failed at, but the beauty is that their list of accomplishments are usually longer.
When fear tries to creep up on you, just settle down and ask yourself this question, “What is the worst that can happen?” the worst thing that can happen is not always as bad as we fear.
Rich people feel entitled to their riches. They feel worthy of their wealth. On the other hand, the poor don’t particularly feel worthy of riches. They don’t see themselves as important or of any value.
This has to be more than just a lofty idea. Take a look at your current position at work and ask yourself if you’re replaceable. If your answer is in the affirmative, then you should find a way to become invaluable.
If you’re invaluable to your company, then they’ll pay more to retain your services.
Wealthy people recognize the power of money and how effective it is at solving problems or making their lives better.
Low earners view money as their enemy. They work hard just to settle their bills, pay the bills to survive, and so the circle continues while they continue to live in misery.
Though money is not necessarily the source of all happiness, the smart ones know how to leverage it to make life easy for them.
These are not magic tricks. They’re just a means of reconstructing your brain to place better value on yourself and your work – by earning more and finding better ways to spend what you earn.
Wrapping it up
Finally, all successful people have cultivated a special sense of discipline. This is a huge reason that successful people are successful and unsuccessful people remain that way.
You need self-control and the “stick-to-it” attitude that won’t let you give up, even when the going gets rough – and it will.