19 Habits Of The Wealthy vs Poor – Which Do You Have?

19-habits-of-the-wealthy-featured

Think about where you are right now. If you’re a doctor or other high-income earner then more than likely you’re in the position you’re in because of personal habits. While friends were out partying in college; you chose to study instead. 

In college, I got into the habit of studying a minimum of 3-4 days before each test. I wasn’t the type that could cram the night before like many of my classmates. This habit allowed me to get into dental school and eventually into a surgical residency. 

During a recent online financial seminar, pastor Craig Groeschel stated, “Successful people do things consistently that other people do occasionally.”

I love that line. 

Guess what these consistent things are he’s talking about? That’s right, habits

How many times have you seen someone finally lose weight that’s been struggling their entire life? When asked how they did it, many reply, “I got tired of being overweight and decided to do something about it.”

Two things to point out here. They made a decision (mindset shift) and then applied new habits. 

These steps are the same ones that separate the wealthy and the poor. If you want to improve your finances then it all starts with a mindset shift. This then leads to developing new habits which cause action to take place.  

Research shows that our daily habits are the reason why some people are rich or poor. And roughly 40% – 60% of all of our daily activities are habits. This suggests that 40% – 60% of the time during the day, we’re all on auto pilot.

This is great news for those that have rich habits but not so good for those with poor ones. 

Many members of our Passive Investors Circle have informed me that it took a mindset shift to get rid of limiting beliefs to motivate them to start focusing on passive income creation.

Having a poor or wealthy mindset isn’t dependent on your income or bank balance. I know too many  doctors that make $250K+/year that have zero savings.

I also know several that began their careers in poverty that developed wealthy habits which helped pave their way to success.

Having a rich mindset coupled with wealthy habits is ultimately about growth and persevering until you reach your desired outcome.

The best place to start is by understanding the difference between the poor vs rich.


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The Difference Between Rich and Poor People

millionaire next door

Year ago, I remember when my son got invited to spend the night out with one of his friends. He could barely hide his excitement as he thought his friend’s dad was rich because they lived in a big, expensive house.

Unfortunately, this is how most of society thinks as well. Social media does a great job of allowing anyone to flaunt their purchases and lavish lifestyles making it seem that they are well off. 

They maybe well off alright, well off in debt!

If you don’t believe me, then read what the authors of the book The Millionaire Next Door found when studying the wealthy over several decades. 

They aren’t who you think they are. Most are right in front of you living, you guessed it, next door.

They are frugal, drive used Toyotas, don’t buy designer clothes and their iPhones are 6 years old. 

Many are small business owners who started from nothing maintaining their same financial habits while building real assets.

The majority of those with real wealth won’t flaunt it as they’re not concerned about proving anything to anyone. They focus on investing in assets that build them wealth and avoid the liabilities the poor spend most of their money on. 

This is one of the key habits between the wealthy vs poor.

11 Habits Of Wealthy People

#1 Self-awareness

The wealthy ask themselves where they are in life. Before making changes, they define their starting point. By doing this, it gives them the ability to alter their habits. 

These aren’t just financial habits only.

This can also include:

  • family
  • career
  • health
  • business

#2 Set goals

Once wealthy individuals know where they’re starting from, they then develop a plan of action. This creates a clear vision of what they’re trying to achieve and what they want to be (i.e. debt-free).

This vision allows them to filter out people that bring them down and activities that waste their time. 

Research shows that 80%+ of the wealthy focus on accomplishing a single goal at a time. They write it down and then place it in a highly visible location.

Unfortunately, only 12% of the poor people have goals written down.

#3 Eat healthy & exercise

In his book Rich Habits, author Tom Corley states that:

  • 70% of wealthy people eat less than 300 junk-food calories each day
  • 97% of poor people eat more than 300 junk-food calories per day
  • 76% of wealthy people exercise at least 4 days a week
  • 23% of poor people exercise at least 4 days a week

What’s the point without with having wealth without health, right?

“84% of wealthy believe good habits create opportunity/luck vs. 4% of poor” – Dave Ramsey

#4 Create “to-do” lists

I understand that not everyone is wired to be organized. That’s ok if this sounds like you.

But if you want to become wealthy, there’s a good chance you’ll have to change your ways to get there.

After setting their goals, wealthy people create to-do lists that help them stay focused to achieve them.

Most create daily to-do goals to keep them organized throughout the day.

I get that this is simple but remember that successful people do things consistently and a to-do list will help. 

Research shows:

  • 81% of the wealthy keep a to-do list
  • 19% of the poor keep a to-do list

#5 Eliminate negative thinking

There’s nothing worse that can destroy someone as their personal thoughts. Especially when the majority of them are negative in nature. 

Wealthy people understand this and tend to focus on eliminating negative thoughts about money and life immediately when they develop them.  They alter the dialogue going on in their head and focus on positive thoughts on self-improvement, growth and achievement. 

For example, a poor person seeking to buy something would think, “I can’t afford it.” On the other hand, wealthy people ask themselves, “How can I afford it?” 

#6 Admit when they’re wrong or don’t know

Failure is only the opportunity more intelligently to begin again.” ― Henry Ford

I can accept failure. Everyone fails at something. But I can’t accept not trying.” ― Michael Jordan

When I first started investing in real estate, I failed quick and BIG. I lost $50K during  the first equity deal I invested online with Realty Shares

Looking back, I had no business trying to analyze deals with the limited knowledge I had.

After the deal went under, I quickly admitted I was wrong and began the process of educating myself to help prevent future failure. Luckily I found a mentor that has helped me tremendously since then. 

The wealthy understand that it’s impossible to know everything and failure is a part of life. It’s for this reason that they constantly search out knowledge and ask smart questions. 

#7 Read on a regular basis

In Chris Hogan’s book, Everyday Millionaires, his research team found that:

“88% of the wealthy read 30 minutes or more each day for self-improvement vs. 2% of the poor.”

Anything you want or want to improve on can be found in a book. 

If you want to become wealthy, get into the habit of reading. 

#8 The rich don’t work for money

rich dad poor dad lessons

Rich Dad author Robert Kiyosaki teaches that the rich don’t work for money, they make money work for them. 

The poor and middle class work to get paid and realize their taxes increase as their income does. 

Kiyosaki learned early on to put his money to work for him and enjoy tax benefits of generating income that does NOT come from a paycheck.

If you work for money, you give the power to your employer,” Kiyosaki writes. “If money works for you, you keep the power and control it.”

While the poor are working from paycheck to paycheck, the wealthy focus on growing their skills and investing wisely.

They understand that if you work to learn, you’ll be well on your way to success.

#9 Seek out mentors

There’s a saying that, “your network is your net worth.”

The wealthy understand that life is about connections and make it a point to connect with others to broaden their circle. 

Remember that they have goals and a vision and seek out those they admire most to learn from them. 

#10 They know sales and marketing

I firmly believe that if someone is good at “sales and marketing” then they can have the tools for success no matter what field they choose. 

Wealthy people know this and “market” themselves to attract opportunities and then persuade, or “sell” whomever necessary that they are the right person.

Examples include:

  • business opportunities
  • personal relationships
  • job opportunities

#11 Know how to manage their finances

Most people aren’t taught how to manage money.

We’re taught to go to school and get a job which in turn provides us with money.

I know our educational system is severely lacking when it comes to teaching kids about finances, but we’ll leave that for another day.

The point I’m trying to make is that when we’re born, we’re all on the same level playing field when it comes to money management. 

We have to learn it from someplace and it seems that the wealthy tend to become proactive when in managing their finances.

Again, they understand that it’s better to have their money work for them vs them working for it. They know trading valuable time for dollars isn’t how to get rich yet that’s what the majority does.

Getting a second job, working longer hours or pulling double shifts cause us to burn out faster and pay more taxes.

Who wants that? Not me. 

Rich people know their income and expenses and learn how to invest the difference. Over 90% of the U. S. millionaires have real estate in their portfolio. 

Does that tell you something?

8 Habits Of Poor People

#1 Work for money

Most poor people work for money due to….fear. If they don’t work, then they don’t get paid which leaves them vulnerable to possible lay offs as most don’t have a back up plan if that happens.

It’s for this reason that they stay working the same types of jobs as when they first get started.

For instance, once someone becomes a waitress, they will tend to stay in the restaurant business as they claim “it’s all they know how to do.”

Because of this fear from trying something different and learning a new trade or skills, they remain always working for money.

#2 Like to gamble

Tom Corley has studied wealthy people for years and writes about it on his site, Rich Habits.

He found:

  • 52% of poor people gambled on sports and 77% played the lottery every week
  • 84% of rich people did not bet on sports and 94% did not play the lottery
  • 23% of wealthy gamble whereas 52% of poor people gamble

When I lived in Biloxi, MS completing a residency at the VA hospital, we’d occasionally visit local casinos mainly for their great food and concerts.

It pained me then and still does to think about the countless people that cashed their paychecks each week thinking they were going to “get rich quick.”

Rich people know that financial success takes time, initiative, and requires relentless effort.

It’s for this reasons that they avoid any get-rich quick schemes. 

#3 Sleep late

“44% of wealthy wake up three hours before work starts vs. 3% of poor.”
 
The poor tend to sleep later than the wealthy and either get to work on time or late.
 
On the other hand, the wealthy get more accomplished by waking up, on average, three hours before getting to work.
 

#4 Procrastinate

Procrastination prevents even the most talented individuals from realizing success in life.” – Tom Corley

In the classic personal finance book, Think and Grow Rich, author Napoleon Hill states that the enemy of success is procrastination. He states that the wealthy are just the opposite of this, decisive.

His research shows that wealthy people make BIG decisions fast and change them slowly whereas poor, unsuccessful people make BIG decisions slow but change them constantly.

The #1 cause of failure: Lack of decision making

#5 Avoid change

Poor people avoid “change” like the plague.

Many remain poor because of their failure to separate and stand out from the crowd.  They obtain peace of mind from familiarity via their comfort zone and avoid any uncertainty.

The pursuit of wealth requires that you take risks. Most don’t, and that’s why most are not wealthy.

#6 Use savings accounts

Speaking of taking risks, when it comes to saving money, poor people typically opt for the safer route.

They despise losing money and stick with saving it in lower interest savings accounts vs investing in real estate or the stock market.

Unfortunately, most don’t realize that by doing this, they aren’t able to keep up with inflation which is around 3% annually. 

#7  Don’t know what they want

If you don’t have a plan or know where you’re going, then how are you going to get there? Most poor people think like this.

They don’t define their goals of what they want which causes them to focus on what they don’t want.

This fear-based mentality is limiting and keeps them focusing on the risks.

#8 Make impulsive financial decisions

Poor people tend to make their financial decisions impulsively without fully thinking through their choices.

They may purchase a new vehicle without learning about how much interest that will be charged. Their only focus is on how much it will cost them each month. 

These impulsive financial choices are based on feelings rather than sound financial practices. The financial outcomes in these scenarios are often negative with huge losses.

Bottom Line
 
What about you?  Which habits sound more like you?
 
If this is the first time you’ve ever thought about something like this then no worries.
 
The first step in knowing you have a problem is acknowledging it before you can make any changes. 
 

If you want to change your habits like those of the wealthy, then commit to making small changes each day. It’s not tough to do but you have to be consistent with it as then you’ll be well on your way to achieving wealth.

 
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jeff@debtfreedr.com
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2 responses to “19 Habits Of The Wealthy vs Poor – Which Do You Have?

Hugh Voorhees

“Big hat…little cattle”

I read the millionaire next door” years ago, then made it mandatory reading for our combined nine children. We still comment to each other about the book’s wisdom.

Buy cars “ price per pound” “F150 pickup truck” “Dr North vs Dr South”

Enjoyed today’s read

Retired

jeff@debtfreedr.com

Yes, that’s a MUST read for kids.

Another for us is Rich Dad Poor Dad.

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