The Rich Mentality vs the Middle Class Way of Thinking

The mentality of the rich is completely different than the way the middle class thinks. Even very high-income people are still tied to their jobs where the rich mentality ensures not only Financial Independence but also Financial Safety and Stability.

The Rich Mentality and Why It’s Different than Middle-Class Thinking

Recently I was having a conversation with someone. They were explaining the school program they were in, the job they wanted to get, and their career goals.

I looked at him and said: “So your goal is to work?”

He wasn’t really sure how to respond. I continued “Well, it seems like you have a very detailed plan and you are talented and intelligent. I think you are doing a great job accomplishing your goals.”

Confused by my words and tone, he asked: “What’s your goal?”

“My goal is to not have to work” – Eric Bowlin

I’m focused on being financially independent.

Rich is Not a Number, it’s a Mentality

How much money makes you rich? Do you define it as cash in the bank, or income?

What about debts or mortgages, how do you account for those? Is the lawyer making $400k per year better off than the retired person making $100k passively from investments?

I bet you can’t really answer those questions.

It’s because being rich is in your head. You have a vision of what “rich” is, so if you change the image in your head, then the definition of “rich” changes. You cannot define rich as a number.

Instead, can you tell me who has the rich lifestyle:

1. A person who works 40-60 hours a week, drives expensive cars and lives in a McMansion. He often misses his children’s games and recitals because of work, but he makes up for it by taking the family on a 2 week vacation every year to a nice place in a 4 or 5 star hotel.
2. A person who works 2 hours per week, if at all. He drives a normal car and lives in a decent, but modest home. He can travel the world with his family, can stay at home. He has plenty of free time so he often works a side job, or donates his time to a local charity. He spends every day with his children, watching them grow up, teaching them, and helping to raise them (instead of leaving that up to a nanny).

Some readers may opt for #1, but the majority of people would prefer life #2. Obviously, there are hundreds of variations of each lifestyle, but the concept is the same – being rich is a mentality, not a number.

The person who is free from the requirement of working can lead a more meaningful life, be it through work, charity, family, or something else.

The person who needs to work can lead a meaningful life, but it would always be an improvement to be financially free.

So, if you adopt the mentality of the rich, you also can achieve the goal of being “rich,” if you so choose.

Rich mentality #1 – Have the Right Goals

Maybe I’m an optimist, but I believe intelligent and capable people tend to achieve most of their goals. Perhaps they fall a little short, but are far better off than before, right?

The problem is that most people set the wrong goals.

If your goal is to work for 40 years and retire, you probably will achieve that goal.

You know what, if you set your goal to stop working at age 30, you can probably achieve that goal too.

Rich Mentality #2 – Understand that Assets Pay You and You Pay for Liabilities

The biggest problem with the middle class mentality is the constant spending on liabilities instead of assets.

It’s really simple, if you pay each month, it’s a liability. If it pays you, it’s an asset.

The middle-class invest in “homes” and “nice things” with some savings stashed in wall street.

The rich mentality is to invest in things that pay you – businesses, ideas, real estate, and more.

Many wealthy people have very small stock portfolios as a percent of their total wealth. The exception may be the ultra rich which use stocks to take over businesses (think about Warren Buffet) which just makes it a different way of taking ownership of business.

Rich Mentality #3 – Diversify Income, not Stocks

The rich focus on creating multiple streams of income.

The middle class are focused on just one stream of income and save a fraction by buying multiple mutual funds (stocks underperform real estate anyhow).

The rich have business income, rental income, referral fees, affiliate payments, website advertising, and business income among other things.

The middle class have a job.

Which would you rather be?

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