Wealth Strategy: Rich vs Poor
This is not a case of rich people and poor people. There are poor people with a rich mindset, however poor due to circumstance. As well as rich people with a poor mindset.
Many people do not reach financial freedom because they do not have the right mindset. Everything depends on how you think about money, wealth and success. The rich understand that any surplus of money is to be invested and grow their financial wealth. On the other hand the poor sees any surplus as an opportunity for consumptions.
Having a poor or wealthy mindset, does not depend on your bank account. Rich people can have a poor mindset and themselves up for failure. It also happens that poor people can have a rich mindset and create their path to wealth and success.
As we’ve previously mentioned, a rich mindset will look for ways to grow their wealth. Be it through stocks, bonds, real estate and so on. But what else sets them apart from the poor mindset?
- A rich mindset is set to making more money and have money work for them. Instead of working and living paycheck to paycheck (let’s call that the rat race), a rich person will take a proportion of that income and invests it.
- A rich person will not splurge on unnecessary purchases. They will be thoughtful of their spending and buy what is necessary. Unlike impulsive spending a poor person will do.
- Rich people set long-term goals that will set them up for success and financial freedom. In the case of a crisis the rich have sufficient funds to continue their life due to the multiple streams of income they have through their investments.
- Most important trait is, the rich are eager to learn. Most millionaires were not born millionaires, they learnt how to build wealth. Remember this is why increasing your financial IQ is important.
As stated above, a poor person will use any surplus money as an opportunity for consumption. They use their money and increase their liabilities as they purchase things on credit. What other characteristics should you look out for in a poor mindset?
- Poor people work for money. They exchange their time for a monthly paycheck and live in the rat race. They will spend their entire paycheck at making purchases and reaching the end of the month with nothing left.
- A poor person will spend money on both necessities and desires. For example you go to the shop for bread, you will leave the shop with bread plus a couple more things you do not need. This is called impulse buying. Poor people spend beyond their means. They are after the latest trends and image rather than increasing their net worth.
- Poor people usually set short-term goal. They do not feel the need to have long-term goals that will help them achieve wealth. As mentioned previously, the poor tend to live paycheck to paycheck. In case of crisis it will be difficult for them to cope.
- Education is very important and having a high financial IQ is for your advantage. The poor do not have that eagerness to learn. As mentioned, they care about their image and what people think. Any situation where they are challenged intellectually they feel insecure. One thing the poor do not realise is that they are poor due to their poor lifestyle choices.
This is purely a guide, whether you have a poor or rich mindset it is up to you. However the only way to get out of the rat race and grow your wealth is to change your mindset. It is never too late to learn and The Access Club is here to help you!