Wealthy Mindset: How the Rich Think & Act Differently

The wealthy think far differently about all things money related (and many things life related) than your average person does.

There’s a reason that less than 1% of people hold more than 50% of all the wealth on earth [source]. It’s not because they are controlling and oppressing you, it’s because they know things you don’t. Things that either you haven’t been taught or haven’t taken the time to learn yourself. They think completely different than the way that you think.

If you remember nothing else that I say for the entire rest of the article, remember this: Our thinking shapes our behavior and our behavior and responses will determine our results. You must change your beliefs and understanding of money in order to find the path of the wealthy, and from that path you will see the entire world in an entirely different way.

Notice I basically said the same thing three times in the above three paragraphs. People learn through repetition and I absolutely do not want you to take lightly the fact that you absolutely must change your thinking on money or you will never become rich.

Come join us, open your mind and explore a perspective on the world of money and the wealthy.

An Alternative Education: “Money” Is Not Taught In School

They don’t teach about money in schools. Sure you can take math, business and accounting courses and even take budgeting courses. But in high-school/college/university, there’s no course on getting rich. They don’t really teach you about money. If they did, the rich wouldn’t just 1%.

Money is knowledge. The rich teach themselves financial education in order to increase their financial literacy and intelligence. They learn about money, how it works, how to make deals, why things like long term saving will never make you rich – though that depends on your actual definition of rich which we will discuss in another article.

So many people actually hate dealing with money. They hate thinking about the bills, income & expense, doing budgets, tallying up their assets, etc, etc. But if you’re one of those people that hates those kinds of things, and you really want to get rich, then you’re going to need to change. You’re going to need to learn about the world of money.

You’re going to have to take a hard look at your own personal world, not just of money, but also your habits and action. Don’t go easy on yourself. You need to change inside before you can do the external things that are necessary to get rich.

Conscious Spending & Pay Yourself First

The rich practice “conscious spending”.  For the most part, this means working within some type of budget. The rich know where their money goes, and they make absolutely certain that a consistent portion of it goes into purchasing assets. If you absolutely hate the idea of trudging through making a budget, there are some ways that you can automate the process in order to help – but as mentioned above, you need take a hard look within yourself and decide if you’re ready to start taking the steps necessary to walk the path of the wealthy.

The wealthy work on a principle called paying yourself first. This is one of the first main steps in conscious spending.

Paying yourself first is very simple, it means when you get your pay each week or month, you immediately set aside 20% of that pay. If you’re income is stretched to the max currently then aim for at least 10%. If you still can’t set aside that much then your next step is to do one of two things. 1. Figure out a way to reduce your spending or figure out a way to increase your income. We will talk about methods for doing both of those later, but for now if you are able to do this step immediately then you’ll already be one step ahead.

Open a separate savings account, absolutely not a retirement savings account, just another savings account somewhere – either in your existing bank or some other bank if necessary to avoid temptation to spend it. You can have your bank setup an automated transfer for you to take X amount out of your pay each time you get paid and place it in a side account. You need to be able to have access to these funds to use for future investments but also be disciplined to not spend them on frivolous things.

The next part in Conscious Spending is simply budgeting. Know how much you actually have each month, don’t spend over it, don’t put things on credit card, if you can’t afford them, don’t buy them. If you wish to buy frivolous things, specifically set money aside for those things and only spend that money them. You can automate this as well in the same was as paying yourself first. So designate 70% of your income to absolute expenses, set 10% aside for your fun things and 20% aside for your asset purchasing. Next we need to find out what kinds of assets count.

An Asset Is Not An Asset

The wealthy have different definitions than we do for common money terms and one of the most important ones is what defines an asset. This is an extremely important distinction and understanding and acting on this knowledge will immediately change how you think when you spend money on things that you might call an asset.

Mindset Comparison

There shall be a chart posted here in the future. Stay tuned. Website still heavily under construction.