Measure wealth not by the things you have, but by the things you have for which you would not take money.


Measure wealth not by the things you have, but by the things you have for which you would not take money. -Anonymous

This might be worth more than a cheap lunch, but it was your grandfathers, and you just won't part with it. Wealth, in this case, is measured in fond memories.

This might be worth more than a cheap lunch, but it was your grandfathers, and you just won’t part with it. Wealth, in this case, is measured in fond memories.

What does that mean?
This one hits consumerism below the belt. This quote is a call-out to all those who pride themselves in what they have acquired. It asks them to take another look at what they have, and what they hold as valuable.

You paid money for that car, or that house. If offered enough money, you’d probably part with it, if only to buy the next item on your wish list, right? But is that what makes you wealthy? What joy do you gain from it?

Instead, the quote asks you to consider valuable the things you wouldn’t trade for any amount of money. Cherished heirlooms, the first dollar (or appropriate monetary unit) you earned, your sports trophy, or similar items.

Most of what I just named are worth roughly a lunch at a fast food restaurant. Most are probably worth less. Yet you’d have to be pretty hungry to part with the things you cherish.

The quote says those things, the things you wouldn’t trade for money, they are what make you wealthy. Not in the traditional monetary sense, but in spirit, deep inside. That’s where true wealth resides.

Why is wealth in spirit important?  
I’ll apologize up front for using the word spirit. It has many other meanings, and those may offend some. I mean it to be the warm feeling you have inside when you look at a prized possession. The things you achieved by sweat and toil. The things you worked hard to attain or obtain.

These things make us feel good inside. They are a core part of our being. They are attached to the seat of happiness within us. This is the kind of wealth that brings lasting happiness, not the shiny baubles you buy and sell, each in their own time.

Take a moment and consider some of the happiest moments in your life. How many had to do with the acquisition of something you’d later sell again? How many were of the kind which you wouldn’t sell at any price? Which made you feel better inside?

Which brought you a sense of wealth, a sense of contentedness, and even a bit of happiness? How do you think of wealth now? Do you see wealth in a slightly different light? Does your new view of wealth change who you consider wealthy?

Where can I apply this in my life?
Now that you have reconsidered what you consider to be valuable, take a look at your life. What in it has a little less value than you used to think it had? What is now a little, or even a lot, more valuable than before this attitude adjustment?

Grab some paper and write down a list of things you were planning to do, and the order or priority you had initially given them. When you’re done with that, think for a moment about each item on the list, starting with the first.

Take a moment and imagine you’ve completed whatever it was, and you’re now done and look at what you have. Is it more valuable with your new definition of wealth, or less so? Should it be more or less important or urgent than it was before?

Repeat this for each of the things on your list, and then put a single line through the order or importance it used to have, and write down what you think your new order or priority should be. With that done, take a look at your list. How different is it now? What changed the most, and what stayed the same?

Now think about all the things you have thought about doing, but didn’t do for whatever reason. How many of them are now more important, now that you have a different way of valuing things? Is there anything which needs to come off the “sometime, maybe” list, and get put on the real list? Do it!

Now take a look at your updated list and figure out what the plan is going to be. Which will you get done first, what others can you start, how can you move forward? How can you get a little more real wealth in the shortest amount of time?

What are you waiting for? Pick the item which will bring the most true wealth and get started on it. Select a small detail and do it right now. Make a phone call, figure out what are the first few steps, find a mentor to help you, find a resource online. It won’t get done if you don’t start!

We all have slightly different definitions of wealth. But the truly valuable things are those which we would never trade for anything. Those are the things which make us wealthy in spirit, and they help us find happiness within us. That is true wealth, my friend.

Why thinking about money is holding you back from wealth



To most, money is a tool. We imagine it as a device that is universally useful; a master key to open any door. With it, we can do anything; and without it, nothing.

With this understanding, we spend much of our lives in the pursuit of it. Yet, the more we chase, the further it becomes out of reach. Even when we acquire it, it is like any other measurable goal: we are left wanting more. Why settle for 10 when you could have 20? What’s 20 when you could have 50?

This is the mentality of the rich.

It is not your bank balance that makes you rich or wealthy, but your mindset.

In this post, we will explore why changing your mindset is the key to wealth, and how its rewards are infinitely greater than riches.

Get rich, die trying

Those that chase money may be rich, but never wealthy.

To the rich, money rules all.

They hunt it relentlessly, like a bull after a matador’s red flag flapping in the breeze. Once they’ve had a taste, they will whip around for another charge, hoping to take it down once-and-for-all.

How the rich acquire their money is not so important; it’s the final result that matters.

Their results must be tangible, measurable and concrete. This explains their preference for physical rewards; things that can be touched, seen, felt, smelled or tasted: bulging bank balances, luxury lifestyle choices (exclusively priced houses, cars, vacations…)

Their belief in the power of money is absolute, and will drive them to the ends of the earth. They are so fixated on it, they miss out on the beauty of both the journey and the final destination.

To explain this mindset, let’s picture Usain Bolt, the world’s fastest man.

Having thrown the Olympic record book out the window, Bolt has experienced countless benefits on account of his efforts: fame, fortune, an incredible physique, not to mention the less tangible benefits: personal accomplishment, achievement, influence…

Now, imagine that throughout his whole sprinting career, Usain’s MAIN objective was to have a jaw-dropping 6-pack; something truly spartan, enough to make Zeus want to trade his throne for an AbMaster.

While killer abs came to him naturally, would he have become the world’s fastest man if they were his focus? Unlikely.

While this example might seem laughable, having money as your core objective is just as insane. In trying to get rich, you are chasing a by-product.

Money: the by-product of value

Money is a by-product, or as J.D. Roth puts it, a “side effect”.

Of what, exactly?

Just as a cough is one of the results of a cold, money is but ONE by-product of creating value.

Mark Zuckerburg did not earn $74 billion trying to become rich. Had this been the case, he almost certainly would have accepted a $1 billion buyout offer by Yahoo in 2006, back when Facebook was worth just $20 million (with less than 10 million users).

Mark’s mission was not complete; his belief in the value of his product was greater than a billion dollars. How’s that for moral fortitude? That’s the power of a wealth mindset.

Facebook has since grown to a global empire altering the lives of the world’s 2 billion users, not to mention non-users. Opinions of Facebook aside, it can be said that Mark has created value.

Yet, too many of us identify money itself as being of value, and pursue it at all costs. In the process we sacrifice our health, happiness, relationships, and almost everything of real value; the things that bring us lasting satisfaction.

The rich misunderstand the wealthy, wrongly mistaking their bank balances as the source of their value. With this warped reality in mind, they feel validated in the pursuit of riches.

Yet ironically, money comes much easier to the wealthy, who do not hold it as the apple of their eye.

They get rich without trying.

The mindset of the wealthy

The wealthy strive to contribute, to develop, to offer something greater to society; to create value. And it is value that people recognize, not riches.

This why the wealthy are remembered, and the rich quickly forgotten.

With a $12.5 billion net worth, Kirsten Rausing’s fortune is twenty times J.K. Rowling’s humble $650 million. But will a leading shareholder’s legacy outlast Harry Potter? Time will tell.

See, money is just one of the many by-products of creating value. And to the wealthy, it is a by-product that is no more important than any other of their motivations: the desire to innovate, to create, to help others…

Yes, most wealthy individuals have talent; a vision; inspiration. But ultimately, it is their mindset that enable them to succeed. Nothing more, nothing less.

Start to think like a wealthy individual, and you will soon have a taste of all of these rewards, money included. In stoically keeping his wealth mindset, Mark became the 5th richest person on the planet.

Your mind is your wealth, your wealth is your mind

To start experiencing these rewards, focus your energies on creating value, whatever your situation.

Not just entrepreneurs and people in positions of power create value. A solo mother, J.K. Rowling spent 5 years on welfare writing her bestselling novel, suffering 12 publisher’s denials before it was accepted.

If you are an employee, make yourself invaluable to your company. Bring something to the table no one else can offer- you will soon be indispensable, forge powerful relationships, be rewarded financially, and that’s just the beginning.

If wealth is your path, create value and your rewards shall be far greater than money. The wealthy do not chase money, yet are rewarded in ways the rich cannot imagine.

If money is still your final goal after reading this, wealth will get you there. Trying to become rich is like deliberately wading into quicksand and struggling to escape. The more you try for it, the deeper you sink.

Wealth or riches, the choice is yours.

What the rich do differently: Habits that foster wealth and success


I’m fascinated by the differences between rich people and poor people. Are the differences mostly a matter of class and economic mobility? Are people born to wealth and poverty and destined to remain there? Or are there observable differences in attitude and action that tend to lead people to specific levels of affluence?

From my experience, it’s some of both.

I believe that there are absolutely systemic issues that contribute to wealth and poverty. But I also believe that there are attitudes and habits that foster wealth and success. These attitudes and habits can be learned. They can be applied to our own lives, allowing us to build better futures.

My Story

I grew up in a family that had always been poor, a family that had lived for nearly 100 years in rural Oregon, barely getting by. The things we had and said and did were “lower class”, even if I didn’t know it at the time.

I was raised in this trailer house:

My father was a serial entrepreneur and the primary breadwinner for the family. Occasionally his businesses did well. Mostly, they didn’t. But even when our family did have a decent income, Dad spent that money on boats and airplanes and computers. He didn’t save. Then when hard times came — and hard times always came — he had to sell those toys to put food on the table.

The boom times were rare though. During the 1970s and 1980s, Mom and Dad spent most of the time living paycheck to paycheck. They fought about money. When Dad’s businesses weren’t doing well (which, again, was the norm), he worked as a salesman for various industrial companies. Or he was out of work. He spent long stints unemployed. We had to have help from extended family and from our church. (I can’t recall that we were ever on government assistance, but it’s certainly possible.)

Just before he died in 1995, Dad pulled me aside to apologize for how poor we were when I was a kid. “I remember that one Christmas when we didn’t have enough money for presents,” he said, “You and your brothers wrapped your existing toys and gave them to each other. I felt so ashamed. I’m sorry I couldn’t give you guys a better life.”

So, I’ve experienced poverty. Maybe not poverty as extreme as some others, but poverty.

I’ve also experienced wealth.

Today, my life is very different than it was when I was growing up. I’m fortunate (and grateful) to have a solid financial foundation. I achieved that financial success through a combination of hard work and luck. (And make no mistake: There was definitely good fortune required to get me where I am today.)

My brothers too have managed to work their way to a comfortable middle-class lifestyle. We have it better than our parents did. At the same time, it’s clear that the three of us retain some of our old habits and attitudes. (So too, I think, do other members of our extended family who also grew up poor.)

From my experience, I believe that poor people have certain habits, attitudes, and expectations. I think that these habits, attitudes, and expectations differ from those of wealthy people. Sometimes these qualities are a result of being poor (or wealthy); sometimes these qualities lead to being poor (or wealthy). In other words, it’s neither the “chicken” or the “egg” — it’s both.

What do I mean? Let’s take some time today to explore the types of habits that foster wealth and success.

Important note: Before we go any further, I’d like to acknowledge that this is a complex subject, one weighted with political, economic, and social issues. I don’t expect for one blog post to be a definitive exploration of the topic. I do, however, hope that this article can highlight some insights from myself and others — including you. This piece is not meant as a takedown of the rich or a takedown of the poor. It’s meant to highlight habits and attitudes that can improve the odds of success.

The Secret Language and Behaviors of Wealth

First up, here’s Chelsea Fagan from The Financial Diet sharing eight things wealthy people do differently. Fagan breaks down what she calls “the secret language and behaviors of wealth”.

At first I thought this video would be cheesy. It’s not. It’s excellent — which is why I’ve placed it at the top of this article. Fagan’s observations are astute, and she offers lots of practical advice for her intended audience: young women.

“Wealth isn’t just about how much money you accumulate,” Fagan says. “Particularly in America, there’s a whole different approach to life — not just the financial parts of it — when you’re wealthy.”

She continues: “There are many specific behaviors that wealthy people tend to practice which are adapted to perpetuating their wealth. The good news is there are many of these habits ane techniques that you can adopt even if you’re on a serious budget.”

According to Fagan, these are the eight things wealthy people do differently from the rest of us:

  • They don’t wait for permission. From a young age, we’re conditioned to get permission to do the things we want. As a result, most of us enter adulthood with the idea that we still need permission to pursue our desires. Wealthy people have shifted their mindset from permission to control. Echoing my friend Chris Guillebeau, Fagan tells her viewers, “It’s easier to ask forgiveness than permission.” (This is one of CG’s mottos. He lives by it.)
  • They know the landscape around them. In the U.S., for instance, we’re taught that it’s bad manners to talk about money. Most people don’t. The wealthy, however, do talk about money — at least amongst themselves. (From my experience, this is very very true.) Talking about money helps wealthy people better understand the financial world around them so that they’re able to make better decisions. Plus, wealthy people actively seek advice and information about money.
  • They ask for help with what they don’t know. This one is huge. From my experience, when poor people don’t know something, they tend to shrug their shoulders and go on with life, never seeking an answer. Wealthy people aren’t satisfied to remain in ignorance. They have what I call a personal board of directors, a small group of trusted advisors to which they can turn for information and advice. I just emailed my accountant the other day, for instance, asking for help with a financial issue. This morning, I’m driving an hour to meet with my friend Michael, who has acted as both a friend and advisor for a decade now. Even if you can’t afford to have an accountant, attorney, and/or financial advisor, much of the info you need is available for free online. You just have to take the time to search for it.
  • They put a specific (and growing) value on their time. “Wealthy people decide that every hour of their life has a value,” Fagan says, “and they stick to that value while constantly trying to raise it.” Wealthy people are aware time is money — and money is time. As a result, they try not to waste time. This is an area where I struggle. That’s why I did a time inventory last year (and discovered I spent twice as much time playing videogames as I did writing about money). Fagan urges viewers to treat every hour of their lives as if it has value — because it does.
  • They speak the language of money. Wealthy people are more financially literate than the poor. They’re better educated about personal finance. Because they know what they’re talking about, they’re better able to advocate for themselves. They’re able to make better decisions.
  • They understand that money is a long game. Or, put another way, wealthy people recognize that there’s no reliable way to get rich quickly but that almost anyone can get rich slowly. They keys are persistence and patience. Do the right things for a long time and you will achieve your financial goals. “The choice is not between this $5 Starbucks that will make me happy or this $5 sitting in a sad bank account making me feel bad,” Fagan says. “The choice is between this $5 Starbucks today or the hundreds of dollars it has the potential to be when it comes time for retirement.”
  • They outsource, outsource, outsource. Wealthy people are aware of where their skills and talents lie, and they play to those strengths. They know when it’s better to delegate a task to somebody who’s better at it. Or they know when to outsource because their time is better spent elsewhere. (This is another area where I suck. I’ve never really figured out how to outsource, so I often find myself doing things that I’m not good at or that I’d rather pay somebody else to do.)
  • They know the importance of recharging. While you might not have the ability to jet off to a beach house in Florida, we’re all able to make time in our lives to “sharpen the saw” as Stephen Covey put it in The Seven Habits of Highly Effective People. Don’t allow yourself to become overwhelmed. Deliberately dedicate time to self-renewal in your physical life (exercise, proper nutrition), social life (spending time with friends), mental life (reading, education), and spiritual life (meditation, church).

This video is truly excellent. If I had a college-aged daughter (or a college-aged son), I’d urge her to watch it. But I think it contains good info for anyone at any stage of life.

The Daily Success Habits of Wealthy Individuals

Tom Corley is the author of a book called Rich Habits: The Daily Success Habits of Wealthy Individuals, which summarizes his research into the habits of the rich and poor. (He defines “rich” as those having an income over $160,000 per year and net liquid assets of more than $3.2 million. To him, poor means a gross income of $35,000 or less and no more than $50,000 in liquid assets.)

Corley’s approach is unique because he took time to interview people from both ends of the financial spectrum. While I haven’t yet read the book, I did manage to track down a piece he wrote for Success magazine that gives some insight into the results of his study. According to Corley:

  • Rich people live within their means. “Wealthy people avoid overspending by paying their future selves first. They save 20 percent of their net income and live on the remaining 80 percent.”
  • Rich people don’t gamble. “Every week, 77 percent of those who struggle financially play the lottery.”
  • Rich people read every day. “Among wealthy people, 88 percent read 30 minutes or more every day.”
  • Rich people spend less time in front of screens. “Two-thirds of wealthy people watch less than an hour of TV a day and almost that many…spend less than an hour a day on the Internet.” On the other hand, “77 percent of those struggling financially spend an hour or more a day watching TV, and 74 percent spend an hour or more a day using the Internet recreationally.”
  • Rich people control their emotions. “Loose lips are a habit for 69 percent of those who struggle financially. Conversely, 94 percent of wealthy people filter their emotions.”
  • Rich people network and volunteer regularly. “Almost three-quarters of wealthy people network and volunteer a minimum of five hours a month. Among those struggling financially, only one in 10 does this.”
  • Rich people work harder. “Unsuccessful people have ‘it’s not in my job description’ syndrome…Successful people work hard to achieve the mutual goals of their employers or their businesses.”
  • Rich people set goals; poor people make wishes. “Every year, 70 percent of the wealthy pursue at least one major goal. Only 3 percent of those struggling to make ends meet do this.”
  • Rich people avoid procrastination. “Successful people understand that procrastination impairs quality; creates dissatisfied employers, customers or clients; and damages other nonbusiness relationships.”
  • Rich people talk less and listen more. “Wealthy people are good communicators because they are good listeners. They understand that you can learn and educate yourself only by listening to what other people have to say.”
  • Rich people avoid toxic relationships. “Of wealthy, successful people, 86 percent associate with other successful people. But 96 percent of those struggling financially stick with others struggling financially.”
  • Rich people don’t give up. Wealth individuals “simply do not quit chasing their big goals. Those who struggle financially stop short.”
  • Rich people set aside limiting beliefs. “Almost four out of five wealthy people attribute their success in life to their beliefs.” They pursue personal development.
  • Rich people have mentors. “Finding such a teacher is one of the best and least painful ways to become rich.”
  • Rich people make their own luck. “Successful people create their own unique type of good luck. Their positive habits lead to opportunities such as promotions, bonuses, new business and good health.”
  • Rich people know their main purpose. “It’s the last Rich Habit, but it might be the most important. Those people who pursue a dream or a main purpose in life are by far the wealthiest and happiest among us.”

I’d love to see the raw data that led Corley to make these conclusions but I don’t think his book includes that info. From what I can tell, it’s written as a story, sort of like The Wealthy Barber. His website does give some background on his methodology, however.

I found other articles about Corley at Business Insider (some stats included) and Entrepreneur. Corley also appeared on an episode of the Afford Anything podcast. Finally, here’s Corley’s appearance on the Art of Charm podcast:

The Secrets of the Millionaire Mind

The Secrets of the Millionaire Mind

When I first decided to dig out of debt in 2004, I devoured every book about personal finance that I could find. One volume that had a profound influence on my future financial philosophy was 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 people around us, especially our family and friends, and from our country’s culture and mass media. (I agree with Eker. See my recent article about money blueprints.)

Eker says the unfortunate truth is that most of us have faulty blueprints that prevent us from building wealth.

“Money is a result, wealth is a result, health is a result, illness is a result, your weight is a result. We live in a world of cause and effect,” writes Eker. “A lack of money is never, ever, ever a problem. A lack of money is merely a symptom of what is going on underneath.” (This echoes my advice that debt reduction is a side effect of doing the right things and ought not be a goal in and of itself.)

At the core of Millionaire Mind are Eker’s “wealth files”, a list of seventeen ways in which the financial blueprints of the wealthy differ from those of the poor and the middle-class. According to Eker:

  • 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.

Eker says that most people are motivated to make money out of fear. People don’t call it fear, though. They say they’re motivated by security. Eker notes — correctly — that fear and security are essentially two sides of the same coin. The tough truth is that money doesn’t dissolve fear.

Eker writes:

Fear is not just a problem, it’s a habit. Therefore, making more money will only change the kind of fear we have. When we were broke, we were most likely afraid we’d never make it or never have enough. Once we make it, however, our fear usually changes to “What if I lose what I’ve made?”

“When the subconscious mind must choose between deeply rooted emotions and logic, emotions will almost always win,” writes Eker. Even if you know what you ought to do intellectually, it can be tough to do it because your money blueprint controls your thoughts and behavior. To change your habits, you have to work consciously and constantly to create a new plan. This takes time and practice.

Want to read more about how fear affects our decisions? Check out my article on how to build confidence and destroy fear.

Millionaires vs. the Middle Class

The Top 10 Distinctions Between Millionaires and the Middle Class

In , Keith Cameron Smith also makes an attempt to delineate the difference between the rich and the rest of us.His ten “distinctions” — in order of importance — 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 doesn’t. I’m not sure 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.

For instance, I know lots of poor people who talk about ideas rather than things and people, and many of the same folks embrace change. A lot of my friends love 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?

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.

A Brief Rant
Without taking anything away from personal responsibility (which you all know I think is vital to success), I’d like to suggest that both Eker and Smith are too quick to dismiss systemic causes of poverty. Perhaps neither of them knows what it’s like to be poor? Some of their observations make sense, but some seem to come from people who’ve lived lives of privilege.

“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? Could it be that when you grow up poor, a scarcity mindset becomes so deeply ingrained that it’s almost impossible to shake? (That’s been my personal experience, by the way.)

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 think this element of “luck” is something ignored by both Eker and Smith (and many other people).

Ten Habits of Successful People

Instead of defining the differences between rich people and poor people, I think it’s more constructive to look at what separates successful people from unsuccessful people. Maybe I’m picking nits, but in this case I think focusing on a financial scorecard misses the point. It’s possible to be successful and poor, and it’s possible to be rich and a fool.

I’ll admit there seems to be a strong correlation between wealth and success, but the two qualities don’t overlap precisely.

From looking at my own friends, and from thinking about the stories readers have sent me during the past decade — especially stories about how people have moved from debt to wealth — I’ve seen the following patterns.

  • Successful people surround themselves with positive people. They limit their exposure to negativity and naysayers, preferring to spend time with folks who have can-do attitudes. They don’t have time to listen to the reasons something can’t be done; they’d rather find ways to make it happen.
  • Successful people aren’t flummoxed by failure. They know that mistakes are inevitable and should be treated as stepping stones to success rather than signs of weakness or reasons to stop trying. (This is why it’s important not to praise achievement, but to praise effort. The former breeds fear of failure.)
  • Successful people manage their time effectively. They recognize that minutes and seconds are a precious non-renewable resource. So, they set priorities and pursue them with passion. My successful friends seem to watch less television (and play fewer videogames) than my unsuccessful friends, for instance. There’s nothing inherently wrong with Game of Thrones or Hearthstone, but they suck up time that could be spent exercising or reading or taking a class.
  • Successful people ignore the opinions of others. They march to the beat of a different drum. They don’t feel compelled to “keep up with the Joneses”. They limit their exposure to mass media not only because it allows them to be more productive, but also because it reduces the influence of advertising and the pressure of cultural norms. When investing, they don’t follow the herd. The wealthy people I know all drive older cars (many of them bought used!), dress modestly, and avoid conspicuous consumption.
  • Successful people have direction. They act with purpose. They know why they’re working hard and saving money. They have a mission, even if it’s as simple as putting their kids through college, and their daily actions are aligned with their long-term goals. None of the folks I know who struggle with money have a clear idea of what they want to do with their lives.
  • Successful people focus on big wins. Sure, they develop smart habits and pay attention to the small stuff. But they also understand that if they’re diligent with their dollars, then the pennies will take care of themselves. The average person economizes on the small things but isn’t willing to make sacrifices when it comes to housing, transportation, or career. And the folks who are broke all of the time? Well, they fritter away their pennies and their dollars.
  • Successful people do what’s difficult. They don’t procrastinate. My friends with money work longer, harder, and smarter than my friends who have less. (This is an unpopular observation with some folks, but it’s true.) They practice deferred gratification, sacrificing small comforts today in order to obtain greater rewards tomorrow.
  • Successful people make their own luck. They practice awareness so that they can recognize opportunities when they come along. Moreover, they act boldly, seizing these opportunities where others might hesitate to act.
  • Successful people believe they’re responsible for their future. They’re proactive. They have an internal locus of control. That is, they understand that although it might not be their fault they’re in a given situation, it is their responsibility to change it.
  • Successful people grow and change over time. They adapt. They evolve. They’re not afraid to entertain different points of view. Most importantly, they’re not afraid to change their minds. They seek knowledge and experience, and they allow the things they learn to mold them.

None of these differences is absolute, of course. Most people (including me) follow a few of these rules but not others. Or we adhere to certain rules only part of the time. The most successful people I know do all of the things on this list; the least successful people do none of them.

The Bottom Line

That’s a lot of words — almost 5000! — about how the mindsets of the wealthy and the poor differ. And while I do agree with these generalizations, I think it’s important to note that they are generalizations. These principles aren’t applicable to all people.

There are plenty of poor people who have the right mindset but struggle because of external factors. There are plenty of rich people who do not have these attitudes but have managed to obtain wealth anyhow.

For me, the real takeaway from discussions like this is that regardless your circumstances, you can increase the odds that you’ll achieve your goals if you model your actions on those of the people you want to emulate. If you want to be rich, look for common themes in the lives of the wealthy. Do what you can to incorporate them into your own life. If you want to be successful, learn from the lives of successful people.

“If you don’t change direction,” my father used to tell me, “you’ll arrive where you’re going.” I didn’t really undersand what he meant when I was in high school. Now I do.

In life, there are often default options. If you don’t consciously and deliberately choose something different, you get the default. Most people live their lives in default mode. They accept the default without question.

My aim for myself — and for you, the readers of Get Rich Slowly — is to both be aware of the defaults and to question them. Sometimes they’re fine. A lot of times, however, there are better ways to live. By examining the habits of the wealthy and successful, I think we can all find ways to change direction so we reach a better future.

What do you think? From your experience, what are the differences between the rich and the poor? What qualities separate successful money managers from those who remain broke? Given roughly similar backgrounds, why do some folks build wealth and others struggle to make ends meet? 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? (Please keep conversation civil and respectful. No poor shaming — but no rich shaming either.)

How to Actually Improve Your Finances in One Year


Saving for your kids’ college and retirement, reaping the rewards of the stock market—all of these things take years to accomplish. But there are financial goals you can accomplish in one year that can make a big difference, too.

First, figure out exactly what it is you want to accomplish over the course of the next 12 months. For me, it’s building up my emergency fund and saving separately for a vacation. For you, it could be increasing your credit score, or saving for retirement, or just generally becoming more knowledgeable about your finances. Whatever it is: Write it down, put it in your Google calendar, or leave it in the comments.

Once that’s done, you can actually take the steps to accomplishing it. Here are some starting points.

Increase Your Credit Score

Good credit can get you better mortgage interest/auto loan rates, which can save you thousands over a lifetime (or simply get you better interest rates on your credit cards).

Increasing your score in a year won’t be easy (especially if you have a higher score), but it’s possible. To do so, you need to understand how your score* is determined:

  • Payment history: 35%
  • Amount owed: 30% amount owed
  • Length of history: 15%
  • New Credit: 10%
  • Types of credit used: 10%

*FICO score

This means the most important factor is whether or not you paid on time. And you should pay the full balance, not the minimum balance that they recommend (which can get you into debt and cost you more money). If you don’t already pay your bill on time, you could see a boost in your score if you do so for at least six months.

The second factor—amount owed—is a bit more complicated. It’s based on your credit utilization, or how much of your credit limit you use. Experts recommend using up no more than 30% of your limit—regardless of whether or not you pay it all off each month—in a given credit cycle to maximize your score. So, for example, if your limit is $1,000, you should try not to put more than $300 on your credit card(s) at any one time. If you have more than one card, you should aim for 30% (or better still, 10%) of the cumulative credit available. You can do this either by being frugal, by making small payments throughout the month to keep you under the limit, or by asking your creditor for an increased limit.

Length of history is fairly self-explanatory: It’s the average age of your accounts, and how long it’s been since you used them. This is one you can’t really change, though it is one reason why parents might consider adding their teenagers or college-aged kids as authorized users on their credit cards.

The fourth factor listed above measures how many cards you open at once (opening multiple accounts—particularly store credit cards—hurts your credit) and the fifth measures your mix of credit: mortgage, student loans, car loan, etc. It’s good to have a mix, but don’t apply for a mortgage to boost your credit.

Beyond understanding your score, you should check your credit report (you are entitled to a free report from each of the credit bureaus—Equifax, Experian and TransUnion—every 12 months) for errors, and dispute them by contacting the bureaus. You can use this letter format provided by the Federal Trade Commission. The bureaus must respond to you within 30 days.

Save More

We’ve talked a lot about saving the past few days here on Two Cents. Particularly if you work in the gig economy, accumulating cash is a necessity to give yourself more freedom. You may need a cushion if you decide to move across the country for a job opportunity, or open your own business, or you lose your job. Now is the time to actually do it.

You could set an automated weekly transfer (or one each paycheck) and forget about it. If you already have that, increase it by $5. You won’t miss the money—I set up a weekly transfer two years ago and I only remember when I write about it.

You could also do some sort of challenge, like the 52 week challenge that Lifehacker wrote about in the past.

You could use an app to save for you.

Save More—Specifically for Retirement

If you have a company sponsored 401(k), increase how much you’re contributing by 1 or 2% this year (up to $18,500 in 2018, plus an additional $6,000 if you’re over 50). If you’re self-employed, open an IRA (or a Roth). If you already have one, again, increase the amount you’re contributing.

Check your fees. Here’s a great table from NerdWallet on how seemingly small fees add up over time. For example, NW found in a different story that paying 1% in fees could cost a theoretical 25-year-old more than $590,000 over 40 years of saving. You want to start saving young so your money compounds, but remember fees compound, too.

(Haven’t started investing yet? Read our beginner guide to get going.)

Spend an Hour With a Fee-Only Financial Planner

Did you know that not all financial planners/advisers are required to act solely in their clients’ best interest? Meaning they can sell consumers investment products that they get a kickback from, even if there’s another similar option available to the consumer that comes without the associated fee? That’s where fee-only financial planners come in.

These professionals (not to be confused with “fee-based” advisers) have a fiduciary responsibility to act in their clients’ best interest, and cannot accept any compensation for the products they sell. They offer comprehensive financial advice, and can finally answer for you once and for all whether you, personally, should save a bit more or pay off your student loan debt.

The fee structure itself is dependent on the planner. Some charge an hourly rate, a retainer fee, or a percentage of assets. You can find one here.

Protect Your Identity

If you haven’t taken steps to protect your personal information and identity from theft, what are you waiting for—an even more massive data breach?

You can’t afford to wait any longer. Here are some basic things you can do:

  • Put a fraud alert on your accounts
  • Freeze your credit (at all three bureaus) unless you’re going to buy a home, car, etc. soon
  • Consider paying for identity theft protection services, which track loan applications made in your name as well as activity on the dark web

Read Some Books

Obviously you should continue reading Two Cents, but there are also some great books that go more in-depth than we can here and offer invaluable insight. Here are some I like:

  • A Random Walk Down Wall Street
    by Burton Gordon Malkiel and The Index Card
    by Harold Pollack and Helaine Olen were often recommended by my colleagues when I worked at Money Magazine, and I learned a lot from these books as a fledgling personal finance writer.
  • American Sickness
    by Elizabeth Rosenthal is an engrossing read on just how and why the health care system in the U.S. is so messed up. It also offers some solid tips on cutting and negotiating costs.
  • Kids These Days by Malcolm Harris explains the many ways millennials are screwed in the modern economy in the most comprehensive and understanding way I’ve read so far.
  • You Need a Budget by Jesse Mecham is a great beginner’s guide to figuring out your priorities and actually creating a budget. If you’re already familiar with YNAB through Mecham’s website, you may not need the book—but for those who prefer paper to screen (or are looking for a holiday gift that will save the recipient money), the book is a great introduction to responsible money management.