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Do Wealthy People Really Have ‘Rich Genes’?

Do Wealthy People Really Have ‘Rich Genes’?

What is it that the rich have that the rest of us don’t? Is coming from a wealthy family a pre-requisite? What kind of role does education play? Or does the accumulation of wealth happen because of certain personality traits?

One controversial theory is that some people actually have ‘rich genes,’ and that those who are rich were born to be. While this may sound far-fetched, there are still some who believe that ‘rich genes’ exist. So exactly what role do genes play, and what can we do to increase our chances of becoming wealthy? When Australian newspaper, the Herald Sun, last year reported the alleged findings of a study on the relationship between wealth and genetics, it certainly caused a lot of controversy. The Australian government’s top policy research report titled Deep and Persistent Disadvantage in Australia, was quoted by the newspaper, saying: “Rich kids do better at school while poor children struggle due to genetic ‘inherited abilities.’”

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What Do Rich People Think About Rich Genes?

This quote turned out to be a misrepresentation of what the report actually concluded (i.e. that environment played the biggest role). In the meantime, however, the argument gathered support, mostly among the wealthy. Whereas those of the lower social classes tended to believe that they didn’t deserve to be disadvantaged. This is hardly surprising when you consider another study by Kraus and Keltner from the University of California, Berkeley, which showed that individuals who perceived themselves as higher in social class rank tended to believe that differences in social standing can be explained by natural or inherent factors, rather than the social-situation context.

In What Degree Do The Genes Affect Our Wealth?

But before we dismiss the idea of rich genes completely, we should consider that some studies suggest that income, educational attainment, and occupational status are at least partially determined by genetics. Researchers at Edinbrough University, for example, claim that genes determine how persistent we are and how much self-control we have, both of which play a large role in success.

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What Else Determine Our Wealth?

A more recent study by CNN Money, in which wealth psychologists such as James Gottfurcht, who runs Los Angeles-based Psychology of Money Consultants, participated reveals that certain personality traits are responsible for the creation of high net worth individuals. Not surprisingly, nearly all individuals with a net worth of over $5 million were entrepreneurs. The ability to go into business for yourself rather than rely on the security of a salary was something nearly all of these people had in common. And according to the study, that requires certain personality and behavioral traits. These include high-energy levels and the ability to work up to 70-80 hours a week. These people often reported sleeping less than others, and frequently took working holidays. Vision and self-confidence were other traits that were essential to accumulating vast amounts of wealth.

Kristen Armstrong, a strategic wealth coach at Ascent Private Capital Management described many of her clients as “force of nature” people, who “have a really great ability to envision possible futures … [and] an amazing ability to focus their efforts and energy once they see a possibility.” High net worth individuals also tend to be tolerant of certain levels of risk. They understand that risk is an essential part of profit, but they are never impulsive and tend to take a long-term view of risk.

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Despite a number of narcissists in the group, psychologists reported that many of the super-wealthy are surprisingly modest and don’t choose to change their lifestyle to suit their increased wealth, choosing instead to invest their money back into their businesses. The good news is that many of these traits can be learned. Wealth psychologists believe that it is sour deep sub-conscious beliefs about money that determine how much money we have.

If you want to improve your own financial situation, look for a life coach who specializes in wealth and money mindsets, and ask them to give you a few pointers. If you are a struggling business person, or budding entrepreneur, look around for someone successful to mentor you. Most of all believe in yourself, and remember that you don’t need to be born with ‘rich genes’ to be wealthy.

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Featured photo credit: rich genes via madisonmovie.files.wordpress.com

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Published on November 20, 2018

The Best Ways to Save Money Even Impulsive Spenders Can Get Behind

The Best Ways to Save Money Even Impulsive Spenders Can Get Behind

The truth is, there are many “money saving guides” online, but most don’t cover the root issue for not saving.

Once I’d discovered a few key factors that allowed me to save 10k in one year, I realized why most articles couldn’t help me. The problem is that even with the right strategies you can still fail to save money. You need to have the right systems in place and the right mindset.

In this guide, I’ll cover the best ways to save money — practical yet powerful steps you can take to start saving more. It won’t be easy but with hard work, I’m confident you’ll be able to save more money–even if you’re an impulsive spender.

Why Your Past Prevents You from Saving Money

Are you constantly thinking about your financial mistakes?

If so, these thoughts are holding you back from saving.

I get it, you wish you could go back in time to avoid your financial downfalls. But dwelling over your past will only rob you from your future. Instead, reflect on your mistakes and ask yourself what lessons you can learn from them.

It wasn’t easy for me to accept that I had accumulated thousands of dollars in credit card debt. Once I did, I started heading in the right direction. Embrace your past failures and use them as an opportunity to set new financial goals.

For example, after accepting that you’re thousands of dollars in debt create a plan to be debt free in a year or two. This way when you’ll be at peace even when you get negative thoughts about your finances. Now you can focus more time on saving and less on your past financial mistakes.

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How to Effortlessly Track Your Spending

Stop manually tracking your spending.

Leverage powerful analytic tools such as Personal Capital and these money management apps to do the work for you. This tool has worked for me and has kept me motivated to why I’m saving in the first place. Once you login to your Personal Capital dashboard, you’re able to view your net worth.

When I’d first signed up with Personal Capital, I had a negative net worth, but this motivated me to save more. With this tool, you can also view your spending patterns, expenses, and how much money you’re saving.

Use your net worth as your north star to saving more. Whenever you experience financial setbacks, view how far you’ve come along. Saving money is only half the battle, being consistent is the other half.

The Truth on Why You Keep Failing

Saving money isn’t sexy. If it was, wouldn’t everyone be doing it?

Some people are natural savers, but most are impulsive spenders. Instead of denying that you’re an impulsive spender, embrace it.

Don’t try to save 60 to 70% of your income if this means you’ll live a miserable life. Saving money isn’t a race but a marathon. You’re saving for retirement and for large purchases.

If you’re currently having a hard time saving, start spending more money on nice things. This may sound counterintuitive but hear me out. Wouldn’t it be better to save $200 each month for 12 months instead of $500 for 3 months?

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Most people run into trouble because they create budgets that set them up for failure. This system won’t work for those who are frugal, but chances are they don’t need help saving. This system is for those who can’t save money and need to be rewarded for their hard work.

Only because you’re buying nice things doesn’t mean that you’ll save less. Here are some rules you should have in place:

  1. Save more than 50% of your available money (after expenses)
  2. Only buy nice things after saving
  3. Automate your savings with automatic bank transfers

These are the same rules that helped me save thousands each year while buying the latest iPhone. Focus only on items that are important to you. Remember, you can afford anything but not everything.

How to Foolproof Yourself out of Debt

Personal finance is a game. On one end, you’re earning money; and on the to other, you’re saving. But what ends up counting in the end isn’t how much you earn but how much you save. Research shows that about 60% of Americans spend more than they save.[1]

So how can you separate yourself from the 60%?

By not accumulating more debt. This way you’ll have more money to save and avoid having more financial obligations. A great way to stop accumulating debt is using cash to pay for all your transactions.

This will be challenging, depending on how reliant you are with your credit card, but it’s worth the effort. Not only will you stop accruing debt, but you’ll also be more conscious with what you buy.

For example, you’ll think twice about purchasing a new $200 headphone despite having the cash to buy them. According to a poll conducted by The CreditCards.com, 5 out of 6 Americans are impulsive spenders.[2]

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Telling yourself that you’ll have the discipline to not buy things won’t cut it. This is equal to having junk food in your fridge while trying to eat healthy–it’s only a matter of time before you slip. By using cash to make your purchases, you’ll spend less and save more.

A Proven Formula to Skyrocket Your Savings

Having proven systems in place to help you save more is important, but they’re not the best way to save money.

You can search for dozens of ways to save money, but there’ll always be a limit. Instead of spending the majority of your effort saving, look for ways to increase your income. The truth is that once you have the right systems in place, saving is easy.

What’s challenging is earning more money. There are many routes you can take to achieve this. For example, you can work long and hard at your current job to earn a raise. But there’s one problem–you’re depending on someone else to give you a raise.

Your company will have to have the budget, and you’ll have to know how to toot your own horn to get this raise. This isn’t to say that earning a raise is impossible, but things are better when you’re in control right? That’s why building a side-hustle is the best way to increase your income.

Think of your side-hustle as a part-time job doing something you enjoy. You can sell items on eBay for a profit, or design websites for small businesses. Building a side-hustle will be on the hardest things you’ll do, be too stubborn to quit.

During the early stages, you won’t be making money and that’s okay. Since you already have a source of income, you won’t be dependent on your side-hustle to pay for your expenses. Depending on how much time you invest in your side-hustle, it can one day replace your current income.

Whatever route you take, focus more on earning and save as much as possible. You have more control than you give yourself credit for.

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Transform Yourself into a Saving Money Machine

Saving money isn’t complicated but it’s one of the hardest things you’ll do.

By learning from your mistakes and rewarding yourself after saving you’ll save more. What would you do with an extra $200 or $500 each month? To some, this is life-changing money that can improve the quality of their lives.

The truth is saving money is an art. Save too much and you’ll quit, but save too little and you’ll pay for the consequences in the future. Saving money takes effort and having the right systems in place.

Imagine if you’d started saving an extra $100 this next month? Or, saved $20K in one year? Although it’s hard to imagine, this can be your reality if you follow the principles covered in this guide.

Take a moment to brainstorm which goals you’d be able to reach if you had extra money each month. Use these goals as motivation to help you stay on track on your journey to saving more. If I was able to save thousands of dollars with little guidance, imagine what you’ll be able to do.

What are you waiting for? Go and start saving money, the sky is your limit.

Featured photo credit: rawpixel via unsplash.com

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