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10 Differences Between Middle Class And Rich People

10 Differences Between Middle Class And Rich People

According to Forbes, the 400 wealthiest Americans have more wealth than the bottom 150 million Americans combined. But what about the people in between? The middle class? You may be considered middle class. You’re not poor, but you’re not rich…yet. The middle class seems to be shrinking, according to the data revealed over the last couple decades. That means you’re going to be less likely to be middle class in the future. You’ll more likely be poor or rich. Which side do you want to be on?

If you want to be on the side with the rich, you’ve got to start thinking like the rich. Here are 10 differences between middle class and rich people for you to learn from…

1. The middle class live comfortably, the rich embrace being uncomfortable

“Be willing to be uncomfortable. Be comfortable being uncomfortable. It may get tough, but it’s a small price to pay for living a dream.”
-Peter McWilliams

middle class and rich differences

    “In investing, what is comfortable is rarely profitable.”
    – Robert Arnott

    It’s comfortable to work a “safe” job. It’s comfortable to work for someone else. The middle class think being comfortable means being happy, but the rich realize that extraordinary things happen when we put ourselves in uncomfortable situations. Starting your own business is a risk and risks can be uncomfortable, but a little risk is what it takes to create wealth and achieve superior results.

    Step out of your comfort zone. Look at all your options. You will have to be at least a little uncomfortable if you want to become rich. You might even have to fail and that’s great, because if you’re not failing, you’re not doing much.

    2. The middle class live above their means, the rich live below

    “There is no dignity quite so impressive, and no one independence quite so important, as living within your means.”
    -Calvin Coolidge

    rich and middle class

      You won’t catch the average millionaire in a $100,000 car or a multi-million dollar home. The rich don’t spend their money on depreciating liabilities, they spend their money on appreciating assets and they live below their means. On average, the rich drive cars that are a few years old and they don’t buy them new, according to studies done in the book “The Millionaire Next Door.” Even if they can “afford” that fancy new Escalade, they usually don’t buy it.

      Remember, if you earn $1,000,000/year and you spend $1,000,000/year, you’re still broke.

      3. The middle class climb the corporate ladder, the rich own the ladder

      “The richest people in the world look for and build networks; everyone else looks for work.”
      -Robert Kiyosaki

      Middle class corporate

        The middle class tend to work for someone else. They have a job. A career. Upper middle class tend to be self-employed. They own a job. The rich tend to own the business. They own that corporate ladder that the middle class are busy working up. The rich understand that they need more people working for them to earn more money. The rich understand the power of passive income.

        4. The middle class are friends with everyone, the rich choose wisely

        “It’s better to hang out with people better than you. Pick out associates whose behavior is better than yours and you’ll drift in that direction.”
        -Warren Buffett

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        rich and middle class friends

          The rich understand that when you surround yourself with successful people, your own success will follow. Likewise, surrounding yourself with unsuccessful people tends to have the anticipated effect. Your income is usually the average of the incomes of your three closest friends. If you want to earn more, hang around people who earn more. It’s all about aligning your mindset with the mindset of successful people. If you want to be rich, you have to think rich.

          5. The middle class work to earn, the rich work to learn

          “When you are young, work to learn, not to earn.”
          -Robert Kiyosaki

          work to learn, not to earn

            The middle class are easily persuaded to change jobs when someone offers more money. The rich understand that working isn’t about the money, especially in the early years. It’s about developing the skills and traits you need to develop to become rich. That may mean working a sales job to better understand the world of selling. Or it could mean you work at a bank to better understand accounting. If you want to be rich, you should be working to learn the skills you need to become rich. Most rich people didn’t get there by earning a high salary.

            6. The middle class have things, the rich have money

            “Too many people spend money they haven’t earned, to buy things they don’t want, to impress people that they don’t like.”
            ― Will Rogers

            middle class and rich difference

              Back to the fancy cars and big houses. That’s where much of the middle class spend their money. Drive through a middle class neighborhood and you will usually see brand new cars, expensive landscaping and high-dollar homes. The rich understand that to become wealthy, you have to want money more than you want things. If you keep buying things, your money will keep going with them. It’s funny how that works. For example, Warren Buffett still lives in the same home he bought in 1958. And he only paid $31,500 for it.

              Stop buying things and start focusing on keeping, saving and investing the money you earn. If you are a shopaholic, start shopping for assets. Become interested in investing, then look for bargains on stocks and businesses instead of shoes and electronics. That being said, it’s not all about saving your money.

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              7. The middle class focus on saving, the rich focus on earning

              “Your greatest asset is your earning ability. Your greatest resource is your time.”
              -Brian Tracy

              middle class and rich people

                “If you would be wealthy, think of saving as well as getting.”
                -Benjamin Franklin

                Saving is important. Investing may be more important, but earning is the foundation of both. You understand that you need to save and invest, but to really achieve extravagant goals with them, you need to earn more. The rich understand this and work on creating more avenues to earn and earning more with the avenues they have. If you really want to become rich, work on your earning ability, not your saving ability.

                8. The middle class are emotional with money, the rich are logical

                “Only when you combine sound intellect with emotional discipline do you get rational behavior.”
                -Warren Buffett

                middle class and rich money

                  Steve Siebold interviewed over 1,200 of the world’s wealthiest people over the past 30 years for his book “How Rich People Think”, and according to him there are more than 100 differences in how rich people look at money compared to the middle class. One of the key differences he found was that the middle class see money through the eyes of emotion, but the rich see money through the eyes of logic. Making emotional financial decisions will ruin your finances. Warren Buffett explains that investing has much more to do with controlling your emotions, than it has to do with money. Emotions are what cause people to buy high and sell low. Emotions create dangerous business deals. Leave emotions out of this and turn to logic.

                  9. The middle class underestimate their potential, the rich set huge goals

                  “Set your goals high, and don’t stop till you get there.”
                  -Bo Jackson

                  middle class and rich goals

                    The middle class set goals. Sometimes. It’s the capacity of the goals that differ from the middle class to the rich. The middle class set safe goals that are easily obtainable. The rich set goals that seem impossible, difficult or crazy. But they know they are achievable. It all comes back to having the proper mindset.

                    When you’re setting your goals, ask yourself if they could be bigger. Ask yourself if that’s really all you can do or if you can do more. I think you can do more.

                    10. The middle class believe in hard work, the rich believe in leverage

                    “It is much easier to put existing resources to better use than to develop resources where they do not exist.”
                    -George Soros

                    rich and middle class workers

                      Hard work is a necessity. For all of us. If you want to reach the top (whatever that may be for you), you’ve got to put in the work. The problem is that hard work alone will rarely make you rich. You can’t become rich by doing it all yourself. You have to use leverage to truly become rich and stay that way. Leverage works in many ways, from outsourcing to investing. The more leverage you can incorporate, the more time you will free up to work on the things that really matter in your business and your life.

                      Some differences between the middle class and the rich are vast, while others may seem simple and minor. The fact is that if you want to become rich, you have to think like the rich and do the things the rich do.

                      Featured photo credit: Dude Walkin/Alejandro Escamilla via unsplash.com

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                      Published on January 15, 2020

                      9 Millionaire Success Habits That Will Inspire Your Life

                      9 Millionaire Success Habits That Will Inspire Your Life

                      As technology evolves and information becomes more accessible, it has also become more challenging to define success. A lot of people are trapped in the rat race while trying to discover the actual formula for success.

                      You could become overwhelmed with what tools, techniques or philosophies to imbibe while trying to get tips over the internet. At every click and turn, there are ‘how-tos and quick-fix’ on how to become successful overnight. You will find several courses, articles, videos and books on how to achieve financial success.

                      But what if I tell you it doesn’t have to be complicated as people made it out to be? What if you could achieve success by merely following these 9 millionaire success habits?

                      1. Read for Personal Development

                      A daily habit I have discovered millionaire share in common is reading. For instance, if you are an entrepreneur, you need to read to become an efficient leader and a productive business owner. Reading helps you to grow and learn without going to a business school.

                      A research conducted by Thomas Crowley indicates about 85% of self-made millionaires read at least two or more books each month. [1] Warren Buffett is one of these examples. He spends 80% of his day reading. In the early days of his investment career, he would read 600 to 1000 pages in a single day.

                      While millionaires sometimes read for pleasure, they also learn to improve themselves. They read topics on leadership, how-tos, self-help, biographies, lifehacks and also follow current events.

                      2. Establish Multiple Sources of Income

                      Another success habit I noticed about success is that they don’t depend on a single income source. Every millionaire possesses multiple sources of income. This helps them to manage economic challenges and also make more money.

                      They are passive income addicts. They earn interests from loans, rental income from real estate, royalties from intellectual properties, dividends from investments. They also launch a side business or run a website or sell information products.

                      How income is made either passively or actively is what separates the successful from the wannabes. They are always learning ways to build multiple streams of income.

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                      3. Live on a Stipulated Monthly Budget

                      An average millionaire does not believe in luck and jackpot. They take the time to understand cashflow-income and expenses. Based on this, they establish a monthly budget and religiously stick to it.

                      The essence of the budget is to minimize unnecessary expenses. This will help you gain complete control of your financial life. Budgeting helps you to avoid overspending to achieve your financial goals. Here’re some tips to help you stuck to your budget: 32 Hacks for Sticking to Your Budget

                      4. Manage and Maximize Money

                      The most significant education for a millionaire is financial intelligence. Nobody attains financial freedom without gaining financial intelligence. This is the more reason millionaire regardless of their income update their knowledge about tax strategies.

                      They always seek to reduce their tax bills. One approach they employ is by living or incorporating their business in states with no income tax.

                      Do you know that about 60 companies paid $0 legally in the 2018 tax year? Some of these companies that ‘avoided'(note: not evaded) federal income tax include Chevron, Amazon, Halliburton, General Motors, Delta. The total income. Their total US income was totaled at $79 billion with an effective tax rate of -5%.

                      What’s the deal? They got a tax refund. How do they accomplish these?

                      An ITEP report indicated that they have the culture of throwing huge sums at tax experts who assist them in discovering creative, as well as convoluted means of paying little tax as much as possible. [2]

                      5. Avoid Debt

                      Another habit that separates the millionaires from the rest of the world is how they manage debt.

                      They don’t live an extravagant lifestyle and only buy what they need and can pay for. They do not book hotels and flights by using their credit cards to pay for them.

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                      They are conscious of the interest rates even when they use credits cards or take loans. They use those facilities for their advantage or pay with cash because of its zero percent interest rate.

                      6. Set Daily Goals

                      It does not matter if they are setting business, career, or financial projections; they have the success habit of setting short term goals. They plan daily and weekly to generate momentum in achieving their long-term goals.

                      Ensure you prioritize when setting daily goals. This will help you to achieve the most important to-dos on your list.

                      Setting priorities will help you to focus on highly rewarding activities. If you desire financial freedom, it is wise to pursue activities that earn you thousands of dollars than hundreds of dollars.

                      7. Don’t Act Rich

                      The goal is not to act rich but to be productive. Interestingly, Thomas Stanley buttressed this in his book that the most prestige brands of cars, about 86% percent are toys of the non-millionaires. People with huge fortunes tend to drive exotic cars but in reality, the largest consumers of pricey cars are aspirational. [3]

                      According to findings by Experian Automotive Researchers, 61% of individuals who earn $250,000 or more rarely buy luxury brands. Instead, they buy Hondas, Toyotas, and Fords like the rest of the world. The reason is they are not ready to spend money on premium cars that tend to drop in value in a couple of years as it would cost money. Millionaires invest in assets that appreciate. [4]

                      8. Own or Buy Businesses

                      In Robert Kiyosaki’s cashflow quadrant, he divided how you earn income into four quadrants. The E and the S quadrants take the left position while the B and the I are on the right side. According to Robert, it is possible to be on all quadrants, but the millionaires are not.[5]

                      • E stands for employee – they work for others
                      • S stands for self-employed – they work for themselves
                      • B stands for a Business owner- employees work for them (500 or more employees)
                      • I stand for Investors – Money work for them like Warren Buffet.

                      Your goal is to move from the left quadrant to the right quadrants where you own big businesses or make money work for you.

                      It is possible to become financially successful by pursuing what you love. For instance, if you love writing, aspire to be the best seller. Wealth and passion work together.

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                      9. Avoid Get-Rick-Quick Scheme

                      A millionaire holds patience as an essential virtue. It takes patience to become successful, not only in finance but in every aspect of life. While it is possible to become financially successful at an early age, most millionaires hit it at age 50. They live a moderate life, invest in their future and retire rich.

                      Bonus: How Can You Develop the Millionaire Success Habits?

                      Having learned these habits, the next question is,

                      How can I develop the Millionaire Success habits?

                      Here are six values you will need to develop:

                      Establish Your Life Vision

                      You need to be clear about what you want in life to set yourself for a life of success. Your vision has to go beyond becoming a millionaire to understanding why you want to become one. Any great entrepreneur you will ever find has a clear vision and an established mission.

                      Understanding why you are doing what you do will drive you to become the kind of successful person you want to be.

                      Make Your Passion a Profession

                      When your passion becomes your profession, work becomes pleasurable. Loving what you do enables money to flow to you and through you.

                      So what’s going to be? Wake up every morning by speaking positive words into your work, love what you do, and focus on the work that brings you joy.

                      Take a look at this article and learn how to make it happen: 5 Steps To Turn Your Passion Into A Career

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                      Focus on Solution

                      Focusing on the solution means establishing the problem that you or your business address. This will help you focus on the solutions when others are faced with challenges.

                      A millionaire has a mindset that is fixed on the solution. He or she knows there’s a way out, and that every problem is an opportunity in disguise.

                      Improve your problem solving skills with these tips: 6 Effective Ways to Enhance Your Problem Solving Skills

                      Develop Your Leadership Skills

                      Leadership skills are an asset that is indispensable if you want to develop a millionaire success habit. The more you hone your leadership skills, the more you will attract leaders who share your values.

                      Be Growth-Focused

                      Millionaire entrepreneurs prioritize self-improvement. Here’s how to achieve it:

                      • Get a coach. Coaching will impact your life, and you will achieve peak performance in life and business when you have a life coach.
                      • Be coachable. It is not enough to have a coach; you must be coachable. Sometimes, you need feedback and counsel to reposition your life and business. A coach has the wisdom and experience to counsel you from a higher perspective. The more you receive feedback and work on yourself, the more you become better at what you do and who you are.

                      Flip Your Thought Pattern From Acting To Being

                      It is not enough to have a millionaire success habit, you must also become a person of positive influence. This is how you can become significant. Bill Gates is not only rich; he is changing lives in Africa and different parts of the world.

                      If you want to become successful, you must first be and think like a successful person. This is how resources you need can flow into your life.

                      Here’s a final thought from me:

                      It is not enough to do something to have something; success is about being someone who possesses what is needed to take positive and inspired actions.

                      More Success Habits

                      Featured photo credit: Austin Distel via unsplash.com

                      Reference

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