Some rich people were born into a family that was already wealthy. Or maybe they had better circumstances than others. But there are truly self-made people out there who rose out of poverty and become rich. So you may be wondering – what are the rich doing differently than poor people?
Keep in mind, this list is not meant to make you feel bad about yourself. It is simply meant to point out the reality of how successful people earn their money. We can learn from the actions of the wealthy and apply these tips and tricks to our own lives. Here are 30 examples of what rich people do that the poor don’t.
30. They Don’t Compare Themselves to Others
With Facebook and Instagram, we are constantly aware of what others are doing. Instead of living our own lives in privacy, we have to constantly measure ourselves against our peers. This has been proven to create more depression, loneliness, and unhappiness in today’s society compared to any other generation. And by constantly comparing ourselves to others, it can hold us back from being the best version of ourselves.
Rich people are comparing themselves to their past selves rather than other people. They think back to the moments when they did not have as much as they do right now. This helps them to feel grateful and confident. By measuring that growth, they can feel proud of their accomplishments. It is possible for anyone to try this mindset, no matter their financial situation.
29. They Call Their Friends
The higher you climb, the more you realize how difficult it is to find people who are true friends. Most successful people have already gone through the process of letting go of toxic people from their lives. On the road to success, there will be gold diggers, clout chasers, haters, and many more negative people that will try to drag you down. Once you find someone who actually cares about you as a person, it’s important to appreciate them.
In today’s world, many people would rather text instead of calling someone. They might go weeks without communicating with people. According to a study conducted by CNBC, successful people prefer to call their friends. Not only is this more intimate, but it is also easier to get your message across clearly to the other person without misunderstanding. They are also more likely to give someone a phone call on their birthdays and special occasions. After going through so much in their lives, successful people truly appreciate their friends and never hesitate to show their love.
28. They Invest in Things They Understand
According to Gallup, 54% of Americans have invested in stocks. These people are statistically older and already have high incomes. Basically, rich white Baby Boomers keep getting richer. Out of the people who do not invest, they say they are afraid of making a mistake. The only way to make money by investing is to try. If you never try, the opportunity to earn through investment will never happen.
However, the key to succeeding in investing is that you need to fully understand what you’re getting into. The vast majority of people who jump into day trading stocks or buying cryptocurrency lose money because they didn’t take the time to learn how it all works. People also lose thousands of dollars being tricked into signing up for a pyramid scheme. Stick to the things you’re good at. For example, maybe you were a baker all your life, and someone comes along and asks if you are willing to open a bakery with them. This is a business opportunity that aligns with your expertise and would be a wise investment.
27. They Create Passive Income
Time is the most scarce resource we have as human beings. No matter who you are, you still only have 24 hours in a day to accomplish everything you need to do. It’s not physically possible to be working that entire time. That is why so many rich people have streams of passive income.
In case you are not aware, the definition of passive income is money that you are making without actually doing any work. For example, if you are a landlord, you can collect rent once a month without having to do anything. Or, if you wrote an ebook, you may get a deposit every month from Amazon sales. The opportunities for passive income are endless, and nearly every industry has their own version of it. Of course, this is easier said than done, but still possible. A great place to start is by readingPassive Income Ideas for 2020.
26. They Focus on Money Early in Life
Most wealthy, self-made people have been trying to become rich very early on in life. We aren’t just talking about the boy-genius tech millionaires. Nearly every person who rose out of poverty had a burning desire to do so since they were a kid. Even if they tried and failed a million times, they eventually find the one thing that will help them generate a large income. A great example of this is P.T. Barnum, who became famous for being a showman and circus owner. In his book, The Art of Getting Money, he lays out how he was clever enough to earn a lot of money ever since he was a young boy. His life story is proof that you can build yourself from the ground up no matter who you are.
One of the perfect times to experiment with this sort of thing is when you are in college. Students usually have a ton of free time, and they may not need to work full-time. They are also figuring out what to do with their life after graduation. So they have very little left to lose. Once you are old enough to be married, have kids, a mortgage, and a lot of other responsibilities, it becomes a lot harder to try something new.
25. They Get Contracts in Writing
A lot of poor people shy away from signing contracts. This is either because they don’t have a lot of legal knowledge or don’t want to come across as being paranoid by asking for an agreement in writing. They care more about sparing the other person’s feelings instead of protecting themselves. This happens a lot when you might be renting a room from a friend, or decide to go into business with a handshake deal.
At the end of the day, no matter how much you trust someone, there is always a chance that one person will remember something different than the other. Sometimes, this is not malicious at all, and people are truly remembering two different narratives. Everyone is going to defend themselves no matter what happens. The only thing that could have cleared up a misunderstanding is to have all of your terms in writing. Survival is all about doing what is best for yourself. If you don’t see a deal in black and white, don’t do it.
24. They Take Advantage of Business Entities
Most people go through life only thinking of their money being owned by themselves as an individual. Rich people are often educated on business law, and how a corporate entity could protect them from liability. Establishing a corporation is kind of like giving birth to a new person. They can have their own tax ID number, credit score, and responsibility to uphold the law. So even if you had a rough start in life, creating a business entity could be a clean slate.
Another great thing about businesses is that they have the ability to subtract their expenses, and only pay for their profits at the end of the year. Instead of paying taxes to the government, they can choose to invest that money into growing the business. This is why so many companies pay zero income taxes. If you are self-employed, look into your state’s local tax laws and see if you can do the same.
23. They Learn to Overcome Their Fears
Doing something new can be scary. We are afraid of failure because it is hard-wired into us. These fears are often what stopped people from going after their dreams. They might be too scared of failure or they may not know how to begin going down the path of success. However, once you get used to pushing yourself to overcome fears, it becomes easy to keep going.
Think back to the first time you tried to ride a bike. It was very scary, but as soon as you learned to ride, it becomes so easy that you can go years without riding a bike and your body still remembers how to balance and pedal. As adults, we get so used to knowing how to do everything in our daily lives without effort. As soon as we are faced with learning something new and potentially failing, it might be too scary for some people to cope with it. Remember that any new thing that you need to learn in order to succeed will be scary at first, but it will eventually become second nature.
22. They Are Open to Criticism
People don’t become successful by working in an echo chamber. They eventually need to show their work to other people. Once you open yourself up to others, receiving criticism is a natural thing that happens to everyone. Even if your work is objectively good, you might encounter someone who is going to put you down simply because they are jealous. However, there might be someone out there who is genuinely trying to help you by pointing out a flaw in your work. Try to take in any advice that may actually help you, and ignore the haters.
Poor people, on the other hand, tends to be more insecure when receiving negative feedback. They take criticism as an insult. There are some people that subscribe to the belief that you should always tell someone that they did a good job, even if they secretly think it was terrible. This is especially true among friends and intimate relationships. However, if you are constantly hearing people tell you that you are doing a great job, you’ll never be able to improve when there is actually something to fix about your work.
21. They Go to Therapy
For years, there was a stigma against going to therapy, especially among people in the lower working class. Many people were ashamed to admit when they needed psychiatric help because they felt others would think they were crazy. And studies have shown there’s an assumption that therapists are only trained to help ease the first-world problems of white middle-class Americans. Thankfully, people are finally beginning to understand that mental health is equally as important as physical health. Unfortunately, a lot of people with lower incomes may want to go to therapy but don’t have access to those services.
The main difference between someone who is rich and poor is their willingness to seek help when they need it. The rich person will understand that their emotional baggage could potentially prevent them from obtaining the goals that they want in life. If going to therapy helps them get over a problem so they can move forward, they do it. Sometimes, being vulnerable to their emotions is the strongest thing someone can do.
20. The Eat Healthy Foods
Most successful people truly care about their own health and well-being. They want to live as long as humanly possible, so they can accomplish their goals. Being alive for a long time is not enough, because they also want to make sure they have a high quality of life where they can enjoy living. There is no denying that eating a healthy, balanced diet is going to help your body fight disease. (And if you need convincing, start watching documentaries like Forks Over Knives.)
Most people assume that eating healthy is too expensive. If you are thinking of buying from places like Whole Foods, you’re right. However, there are plenty of places to get cheaper produce. Search online for a produce wholesaler in your local area. These farmer’s markets will sell “seconds,” which are fruits and vegetables that may be less-than-perfect for supermarket shelves but are perfectly good to eat. The price difference is massive. At one of these wholesalers, you can get an entire bag of green peppers for $1, versus spending $1 on just one in a grocery store.
19. They Wake Up Hours Before Starting Work
You have probably heard people say that rich people wake up at 4 AM, while others vehemently deny it. Their wakeup time will vary depending on when they start working. What is actually true is the mood successful people begin their day with, and how they can calmly and efficiently prepare for the day. Amazon’s Jeff Bezos reportedly sits down with his family for breakfast every day because it’s a priority for him. Many other successful people might go for a run, listen to music, shower, and have activities that help wake them and get focused.
No matter who you are, it’s important to give yourself time in the morning. Think about how you feel when you wake up late and rush to work. You probably don’t look your best, because you didn’t have time to put on makeup or style your hair. It’s likely that you feel frazzled and may have forgotten to eat breakfast. It can ruin someone’s entire day. In general, be sure to set your alarms and go to bed at a decent hour every day.
18. They Understand Value vs. Income
Most people who work a salary job only think about the money that they are bringing home. They might wish that their boss gave them a raise, and feel upset when it never happens. But a rich person understands that your income is directly proportional to the value that your skills are bringing to a company or a client. For example, if you are working in the fast-food industry, you are only going to make minimum wage in the kitchen. Almost anyone can be taught that skill, and it is very easy to find someone to replace you. Businesses need to keep their overhead low, so they would never pay someone a lot of money, even if they were the best fry cook in the world. If you wanted to make more, you would need to work in fine dining instead of fast food.
Rich people work in industries where their skills are at such a high level that they are difficult to replace. The work they do is extremely valuable, so their boss or client makes more money than what they are getting paid. For example, imagine that a book store pays a famous author $10,000 for a chapter reading and book signing. This sounds like an outrageous amount of money for one day’s work, but the bookstore owner knows that if this author comes to their store, they will make $30,000 in sales and it will boost the reputation of the business. Once you look at it that way, it makes perfect sense. If you want to be rich, you need to cultivate your skills so that you bring more value to others.
17. The Big Picture
Most people go through their day-to-day lives only thinking about themselves. They think about bills, food, sex, friendships, family, and everything else in their own little bubble. Occasionally, they might watch the news and discuss politics, but it’s not the main thing they’re concerned about. Those who make a lot of money usually found a way to solve a problem that was bigger than themselves. They are thinking about the world at large rather than their own life.
For example, Jeff Bezos came up with Amazon.com as an online bookstore. He knew that people out there would be looking for books they could not find in their local stores. As time went on, he realized that people could benefit from buying all kinds of products online. At the end of the day, he was simply solving an issue and looking forward into the future. He understood human nature, and knew that people would love a service like this. Even now, Amazon continues to spread their reach wider and wider with the services they offer, all with the goal of making people’s lives more convenient.
16. They Are Willing to Make Sacrifices
No one ever became rich by keeping their lives exactly the same as they were when they were poor. It’s the law of equivalent exchange. They have to give away something valuable in order to obtain more money. And by doing this, they might ultimately end up very stressed out and unhappy. For example, someone wants to find an old house and flip it for profit. But in order to do that, they have to work their full 9 to 5 job in order to pay the mortgage. Then, after work and on the weekends, they have to spend all of their free time fixing up the house to make it livable. Every spare dime they earn goes towards the cost of repairs. With so much work to do, they will have to sacrifice spending time with their friends.
This can be very emotionally draining to give up your social life in exchange for financial success. But at the end of the year or two, they will have a valuable asset, and potentially make a six-figure profit when it sells. And they could keep going until they have over a million dollars in real estate. But none of this is possible without that sacrifice.
15. They’re Not Afraid to Promote Themselves
Most people want to be well-liked by their friends. They might be afraid to brag about their skills and accomplishments. No one likes to hang around with someone that is always trying to promote or sell something to them. However, in most industries, it is completely necessary for someone to put themselves out there if they want to succeed.
You’ll never get a promotion at work if your boss doesn’t remember who you are. People will not want to date you if they do not notice you in a crowd. And clients often do not want to work with someone who has not established some sort of reputation for themselves. One of the major keys to success is mastering the art of promoting yourself. You may have heard some people call it “creating a brand” for yourself. Step back and ask yourself how the world sees you. Is this how you see yourself? It is important to feel confident in your own skin and show the world that you can do whatever you dream of.
14. They Take Responsibility For Their Actions
There are two kinds of people in this world. The first are people who take responsibility for their own actions. They listen to criticism when it’s due and learn from their mistakes. Even if something is not their fault, they’ll do their best to make sure problems get resolved without trying to blame someone else. And if there is a misunderstanding, they will clear up a problem without getting defensive. This sends a message to others that they are confident in their abilities and are willing to do what it takes to succeed.
The second type of person points the finger at others. They are terrified to be “caught” making a mistake at work. So as soon as someone asks them to fix something, they are quick to blame someone or something else for the issue. They are terrified that if they take responsibility for a problem, it might get them fired. These people might mock their co-workers, or try to throw someone under the bus because they believe that by making others look bad, it makes them look more competent. The truth is that it becomes blatantly obvious to everyone around them that they are insecure in their own abilities.
13. They Make Their Kids Do Volunteer Work
Rich people understand the value of humility. They want their children to be grateful for what they have and give back to their community. This is why many rich parents encourage their children to do volunteer work. You might notice that some of the higher-ranking schools in your area will make their kids do a certain number of volunteer hours before they graduate as well.
Organizations like Habitat for Humanity, The Red Cross, and the YMCA are all across the United States. Local thrift stores may need people to help them sort through clothing, or a homeless shelter might need someone to feed people in their soup kitchen. No matter where you live, there should be an opportunity to volunteer. And if you can do this together with your children, you will find that it can be an amazing bonding experience.
12. They Are Confident in Their Abilities
Rich people usually radiate confidence. This might seem like a “chicken or the egg” sort of scenario. Are they confident because they are rich, or did they become rich because they are confident? The truth is somewhere in between. Everyone is human and we all experience self-doubt sometimes. A successful person is aware of their strengths, as well as their weaknesses. They understand that they cannot be an expert at everything. But they feel great about the areas where their skills shine the most.
Everyone is going to have a different ability they do the best. Maybe you are great with kids. Or maybe you are skilled with working with your hands. Maybe you have a beautiful voice, or incredible physical strength. Each and every person is special in their own way. So instead of feeling down on yourself for the things you are not, try to highlight the things that make you amazing. Once you identify your strengths, it becomes easier to build and monetize those skills.
11. They Are Friends With Other Successful People
There’s a very famous quote that we have used multiple times here at Self-Made. It is that “you are the summation of the five closest people in your life.” The reason why we use this so much is that is absolutely true. Sometimes, our friends and even our family can hold us back from being the best we can be. For example, if you grew up in a rough neighborhood, and you continue to hang out with people who break the law, it is going to be difficult for you to rise above your circumstances. Yes, there is such a thing as loyalty, and it is possible to maintain early friendships throughout your lifetime. However, if your friends are putting you in a bad situation, they are not someone that you should have in your life.
Sometimes, insecure family and friends might try to bring you down with negative talk. They might doubt your abilities to succeed, and try to tell you to give up before you can even try. This says so much more about them than it does about you. Happy, successful people build each other up instead of bringing others down. They understand that there is room for everyone to succeed, and they want the best for everyone in their life. This is the kind of person that you need on a difficult journey of self-improvement.
10. They Educate Themselves
People who aspire to be successful are constantly trying to learn as much as humanly possible about the industry they want to specialize in. Even if they have a Master’s Degree in the subject, there is likely to be more to learn that would help them be better at their job or business. Learning is a lifelong journey. No matter how smart and educated you might be, there is always something new to learn. This new information might be the difference between remaining poor and becoming rich.
On the flip side, there are people who do not enjoy learning new things. Maybe they struggled in school and were tired of that constant uphill battle learning things they would never use in real life. They would rather continue their day-to-day lives doing exactly what they feel comfortable with. These people know how to do their job well, so they stick to it. There is absolutely nothing wrong with living this way, but it won’t make you rich.
9. They Buy Instead of Rent
When you rent an apartment or a house from a landlord, you are paying for someone else’s mortgage. In fact, you are paying more than whatever your landlord pays in mortgage and taxes, because they need to make a profit. Yes, they are taking on the financial risk as a homeowner if repairs need to be made. But in the majority of cases, landlords are making money and gaining assets, while tenants are simply giving their money away to temporarily occupy a space.
Financially, this does not make a lot of sense to rent. You can never get that money back, and it’s not building as an investment. Of course, buying a property is easier said than done, You need a good credit score, a down payment, and more upfront to get started. But if you can manage to buy a property, you’ll get at least one step closer to becoming rich.
8. They Buy Products That Last
When rich people go shopping, they think about how long the product will last. They don’t have all the time in the world to keep going out for new items when something breaks. So they would prefer to get the highest quality upfront. Shopping with this mindset actually helps you save money in the long run because you are less likely to need to replace the same things over and over. For example, if you buy clothing from places like Forever 21, you might find that the clothing shrinks or falls apart in two weeks. Compare that to some of the other more expensive brands out there where you could have a shirt for 10 years if it is made well enough.
The same could be said for buying products in bulk. Rich people usually made a lot of money because they were good with numbers. They understand that in most cases, buying in bulk will save the money in the long run. It is also far more convenient to have a huge stockpile of everyday items instead of making a weekly trip to the grocery store. Even if certain bulk products cost more money, if it means saving a few hours of their time, it is absolutely worth it.
7. Capsule Wardrobes
All self-made millionaires earned their money by working very hard. Many of them don’t have the time to figure out what to wear in the morning, let alone worry about the latest fashion. This is why many of them will hire a professional stylist to help them when they go to a special event. They are also more likely to subscribe to the idea of owning a capsule wardrobe. Think about people like Steve Jobs. He was known for always wearing the same black turtleneck to work at Apple.
When you think about a lot of the other big CEOs out there, the majority of them don’t care about walking around in flashy designer brands, unless they made their money from the fashion or beauty industry. Rich people are far more likely to go for solid colors made of high-quality fabrics. These pieces can be versatile when mixed and matched. The easier it is to figure out what to wear in the morning, the better. Just focus on what looks good on you.
6. They Increase Income Instead of Saving
There is a popular phrase, “nobody saves their way to becoming a billionaire.” The rich are far more focused on increasing their income rather than pinching pennies. It’s difficult for your brain to focus on both objectives at the same time. If you choose to try saving money, you will find that life gives you the opportunities to do so. And if you focus your energy on making more money, you will begin to discover more ways to do it. It’s just a matter of choosing one focus over the other.
This is similar to the phenomenon that once you buy a certain type of car, you suddenly see it all the time on the road. Those cars were always there. You just never noticed them until you were able to recognize and identify it. There is even a psychological name for this, called the “Baader-Meinhof phenomenon.” It happens to every single person, so no matter who you are, this can work. Opening up your mind to money-saving opportunities can be great in a lot of ways, but if you want to be rich, choose money-making instead.
5. They Don’t Stretch Themselves Too Thin
There is a phrase that some people are “serial entrepreneurs,” and some people make the mistake in believing that if they want to be rich, they need to open multiple businesses. It’s true that some people love to start one new company after another. But most of the time, people who succeed are the ones who focus on one or two specialties. They become the master of something and make sure it is running smoothly before they branch off into something different.
Even in these new ventures, it is usually somehow related to the previous idea or company. For example, Amazon started out selling books online. Then, they realized that people wanted to buy more products besides books. So they continued with their same online retail platform and simply added new products.
4. They’re Not Afraid of the Next Financial Crash
Some people believe that one day, the economy will totally collapse and we will be left trading gold bars and canned goods. Doomsday preppers and Bitcoin enthusiasts are always claiming that one day, the infrastructure is going to collapse, and paper money will be worthless. But once you learn more about economics, you will realize that society has learned a lot since the 1920s, and total collapse is not likely to happen. In reality, markets crash, boom, and then crash again. Just like waves in the ocean, there is nothing to be afraid of. Sure, sometimes there is a tsunami, but that’s rare, and not the everyday norm.
Rich people know how to take advantage of these highs and lows. If the housing market crashes, that’s fine, because they can buy cheap real estate and sell it later for a profit when prices go back up. The same goes for the stock market. If they are educated enough to know when they are getting a good deal, they can buy into a high-quality stock when prices are low.
3. They Get Rich With Other People’s Money
Millennials are known for struggling with debt. We have massive amounts of student loans left to pay as well as credit cards. Most of us aspire to be debt-free, and it can seem like a total nightmare to imagine borrowing money at all. Some people assume that the rich are totally debt-free, but they’re not. Many of them are borrowing money because they know the secrets to profit from it.
Believe it or not, there is such a thing as “good debt,” and rich people get into it all the time. These are loans that are used to make good investments. For example, let’s pretend you borrow $150,000 from the bank to buy a house, and the mortgage payment is $1,000 per month. Once you get the house, you put it up for rent for $1,500 per month. This tenant is paying for your mortgage, and you also get to pocket $500 per month. If you have never thought about these concepts before, check out the book Rich Dad Poor Dad.
2. They Have Both Short-Term and Long-Term Investments
Most lower and middle-class people don’t have any savings at all. And if they do, it’s in a savings account with their bank that earns less than 1% interest. If they’re lucky, they have a 401K or an IRA set up through their employer and are saving for their future. The rich know that they need to have both short-term and long term investments. Once they have an investment that is meant for their retirement or their children, they don’t touch that money with a 10-foot pole. There is no option to withdraw early in case of an emergency.
Short-term investments are something they expect to make money on in the next 10 years or less. This could be flipping real estate, day trading stocks, etc. Then, there are “legacy investments” that could be passed down to your children. For example, if you buy a painting by one of the great artists of the century, it may be worth double the money 50 years from now. If you are just starting out with building your wealth, you probably want to focus on short-term investments. Once you are debt-free and have some money to spare, you can set money aside for future generations.
1. Their Network is Their Safety Net
Have you ever wondered how some highly successful people can completely fail at something, and yet a few weeks later they have recovered? Even with today’s vicious “Cancel Culture,” some of these scandals are temporary in that person’s overall career. This is because they have made so many connections throughout their career, they can bounce back from failures. This doesn’t just happen to celebrities, either. For example, if you’re a freelancer who has worked with dozens of clients, it doesn’t matter if one opportunity falls through. You can reach out to your network to see if anyone has any new opportunities available.
Evaluate your own professional network. If you were to lose your job, how long would it take to find a new opportunity? Many people in the lower classes are terrified of losing their job because they don’t have this kind of professional safety net. But it’s possible to build one, no matter where you are in life. The power of networking might take you places you never expected to go.