When I was a little boy I used to ask my mom all the time how to be rich.
She could never give me the answer and fast forward 20+ years and I found myself still asking the same question. Never mind the fact that I was a short term thinker, I carried debt and did everything opposite of what rich people did.
But all that changed when I read one book describing how millionaires thought differently.
One thing led to another and before I knew it I was more concerned about being debt free and increasing my networth, than who won the Monday Night Football game.
These series of events led me down a path of wanting to learn more and it was during this time I learned that rich people think differently.
How to be rich wasn't so much knowing, but doing. And though thinking rich was all so foreign at first, reading about the habits of the wealthy and how rich people think was like finding the mythical unicorn.
Which is why I decided to write about how rich people think and simple steps that you start to introduce to your life today! Related: How to Think Like The Millionaire Next Door
Rich is not what you have, but how you think.
This might not sit well, but until you learn to think like a rich person, chances are you won't be a rich person.
For every rich person that made it with a pretty smile or became an “Overnight Sensation,” there are countless millionaires who are just like you and me. They are normal people who live normal lives, but they do one thing differently:
They think differently than most.
While contradicting the common belief that many average people have been brainwashed to think, that rich people are lucky and dishonest, the truth is they simply think differently.
As Steve Siebold, author of How Rich People Think puts it, “It has little to do with their money, but everything to do with their mentality.” And after interviewing and studying millionaires for three decades, Siebold learned a thing or two about rich people.
He learned it was their habits and thought the process that separated them from what can sometimes be referred to as “Poor thinking.” Just check this video out for yourself:
How to Be Rich in 9 Steps
Here is a quick list of just some of the ways rich people think differently. My suggestion – pick a few and implement them into your life. In a year, see where you're at!
1. Rich People Don't Wait Around
As the video alluded to, while most people are watching TV or obsessing over sports (Guilty), rich people are taking action. ACTION might be hands down the biggest separator between how a rich person thinks and how an average person thinks.
While many will sit around waiting for God, the lottery or even their boss to swoop in to fix their finances, rich people realize it is all about action… and even a little risk.
Quick Story: One reader told me about how after the 2008 recession he scooped up five rental properties from 2010-2016 in addition to starting a photo booth business. Many people during this dime were clamping down, this individual was taking action!
2. Rich People Avoid Lifestyle Creep
Lifestyle creep, also known as lifestyle inflation, is when people who make more money, spend more money (Normal counters vs. granite counters).
When many will take their new raise and buy a car or spend it, rich people invest and put their more to work the more they earn. Rich people have the ability to forgo spending their money today, to see it double every 10 years.
Contrary to popular belief, rich people typically live below their means.
3.Rich People Read… A LOT!
According to an Entrepreneur Article, rich people read an average of two books per month.
This is not to say that just by simply reading you will become rich (Remember rich people take action and avoid blowing their money too), but if reading two books a month is what 85% of millionaires do… what odds do you think are better to play?
In addition to, “How Rich People Think,” here are some great books to start with:
- Rich Dad Poor Dad
- Total Money Makeover
- The Subtle Art of Not Giving a F*CK
- Wealthy Gardner
- Start With Why
- Financial Freedom
Set a goal to finish one book a month then move on form there.
4. Rich People Have Multiple Streams of Income
Rich people think differently as it pertains to accumulating money and they do this by focusing on creating multiple streams of income.
From investing in real estate, creating blogs or internet companies, doing consulting work on the side to investing all extra money, rich people realize you need multiple streams of income.
Most of the time their goal is to create passive income streams. While becoming rich might not be your goal, going back to #1, taking action to create extra income isn't a bad idea.
How do you start?
In addition to creating a reading habit, start small with auto investing with a spare change app like Acorns and brainstorm different ideas in the meantime.
Also, start looking at side hustles that make money and that you're interested in! This way you can start to formulate ideas to create passive income streams.
Scaling a side hustle and investing the money is how you create wealth long term. For a guide on side hustles, be sure to use this below:
Challenge Yourself: See what action you can take in the next 4-12 weeks when it comes to creating income!
5. Rich People Value Skillsets Over Formal Schooling
“A” Students work for “C” students, and “B” students work for the government.
Who hasn't heard the standard advice, “Go to school, study hard, get your degree, work really hard and you'll be OK”?
While there is nothing wrong with formal schooling, rich people who think differently, realize it is not about formal schooling, but the skillets that you possess. As Siebold puts it,
Meanwhile, the masses are convinced that master's degrees and doctorates are the way to wealth, mostly because they are trapped in the linear line of thought that holds them back from higher levels of consciousness…The wealthy aren't interested in the means, only the end.” – Business Insider, Steve Siebold
6. Rich People Prioritize Time
Money is not the currency of the rich, time is.
An ATM machine may disburse cash, but no one can withdraw more time. Recognizing this, rich people prioritize their time. They don't use words like, “I am too busy” or “I am an effective time manager.”
Most have been taught to fill their days up with tasks and activities that simply occupy time, meanwhile, rich people look to keep the most important activities on the forefront.
Try this: Instead of saying, “I am too busy,” simply say, “This is not important to me.”
If your brain goes wait a minute, working our and reading is important, then it's probably something you should do!
7. Rich People Delegate
Going back to prioritizing time, rich people know how to effectively delegate tasks and they don't try to do it all.
How rich people think really boils down to activity, once again. Knowing they can't do everything, they delegate certain things and are willing to pay for services that eat uptime.
Instead of worrying about how clean their house is, they recognize that in the 5 hours it takes to clean it and pay someone $100, they can make $200.
8 Rich People Avoid Debt
This is simple for rich people…
Avoid debt if you want to be rich.
Rich people don't:
- Finance brand new cars
- Finance furniture
- Put things on credit cards (without the intention of paying them off)
For the most part, rich people make most purchases in cash or leverage other people's money. Either way, they don't let the interest from debt crush their finances year after year as most average people do.
9. Rich People Surround Themselves With Other Rich People
Take away all the money away from someone like a Jeff Bezos or Bill Gates, and within 5 years are you willing to bet they're billionaires again?
Why is that? Because of how they think!
Sure, both Bezos and Gates are super talented and extremely gifted, however, they also have some unique ways of thinking. For starters, they don’t listen to the opinions of others and they surround themselves with other rich thinkers…
When Bill Gates was spending 18 hours a day programming, he didn’t take vacations because he earned it, nor did he hang out with haters.
When Bezos started Amazon, he didn’t listen to the naysayers who said the internet might be short-lived. Instead, some 20 years later, he created a company that changes how people think of the word Amazon (Prior to Bezos it was a river).
Rich people recognize that there is power in who you hang around. If you're constantly hanging out with people who talk about the past (Not something most rich people do) or that are hating on what you're trying to accomplish- it will be hard to make changes.
Be sure to surround yourself with rich people and instead of talking, listen to what they have to say.
Bonus: You are not making waves if you are not being criticized.
Jeff Bezos was asked once about the critics and his response was simple, “You are not making waves if you are not being criticized.” Instead of focusing on revenge, Bezos doesn’t even give attention to his critics.
He thinks differently and that is why he is rich. Not because he is the richest human on planet earth, but because he knows his ability to think will always moving him further ahead.
As Siebold alludes to in his book How Rich People Think, money is just a tool. It happens to be a very necessary tool in the world we live in that allows you choices, and choices are what make us happy.
My Take on How Rich People Think
While I can't speak for you necessarily, most of my life I always thought that rich people had some innate talent or secret product that made them rich.
My personal belief system was that if you couldn't dunk a basketball, sing, act, throw a football or hit a 100 MPH baseball, your chances of becoming rich were limited.
However, what the more I immersed myself in becoming more financially enlightened I realized that natural talent wasn't the only ingredient. While talent helps, the ingredients mentioned above like daily disciplines, consistency, and perseverance all add up.
This should be super exciting for you to know. Personally, I am really glad that you don't have to be an actor or superstar athlete to be rich, you can just do small things really well and set yourself up to become an overnight success… 10 years in the making.
While maybe acting on all 8 steps right away might seem challenging, as we part, simply start by implementing one or two of these simple habits first:
- Read more content on money and wealth accumulation
- Track your networth
- Find and surround yourself with advisors or mentors
- Stop taking bad advice, AKA be a fruit inspector (Don’t take advice from someone who doesn’t have what you want or hasn't accomplished what you're after)
And lastly, remember – being rich is not like being a Kardashian. It is the financial wisdom and expertise you gather! Because no one can take that from you!
Q: What is a tip you would add to “Thinking like a rich person?” Comment below!
Josh writes about ways to make money, pay off debt, and improve yourself. After paying off $300,000 in student loans with his wife in less than five years, Josh started Money Life Wax and has been featured on Forbes, Business Insider, Huffington Post, and many more! In addition to being a life-long entrepreneur, Josh and his wife enjoy spending time with their newborn son, their chocolate lab named Morgan, working out, being outside, traveling, and helping others with their finances! In case you were wondering, Josh uses Personal Capital to track his net worth and his first investment account ever was an Acorns account 😎