What is the Difference Between the Rich and The Poor?

It’s a touchy subject, talking about money, but for the sake of helping a few us, lets take some time to discuss what is the difference between rich people and poor people. Full disclosure; when we talk about rich and poor here, we are talking about finances. Lets all remember that health is 1000x more important than money (try to enjoy life when you are paralyzed and come back to me), and that money really will not make you happy, so stop reading now if that is your end goal. However, for those of you that want an interesting background on these points then lets dive in.

Definitions

First of all, what is rich and what is poor? We have discussed this in the past on this website, but from a financial standpoint, lets keep it simple and say $2 million is rich. For this example, we will say that poor is little to no net worth, and a salary of $25,000 per year. These are broad terms, but in general I think these are reasonable.

Who is who?

Now lets do an interesting experiment; what are some words that come to mind when you think of the characteristics of someone who is rich? How about someone who is poor? For me I would think a rich person is intelligent, hard working, and maybe a little lucky, and I would think a poor person is the opposite of those things? Now you can see why it is a lot more difficult to determine these points than you would think. There are no obvious answers.

The Truth

Can it simply be that rich people are lucky and poor people are not? That is plausible but does not seem likely that it can be the cause; otherwise people would constantly be trying to get lucky and strike it rich. Hmm, I got it. The number one thing that separates them apart is this; the rich knew they wanted to be rich and they came up with a way to do so. It is really simple. While the poor, they very well may have the talents, work ethic, ideas and abilities that the rich have; for whatever reason they lack the necessary education on why it would even be good to be rich in the first place.

Knowledge

There we go, knowledge is a massive part of the divide. Knowledge of all things can be categorized here, but there are two main pieces of knowledge that are more helpful than the rest; the knowledge that a person’s life might be better off with financial wealth, and second the knowledge of how that might usually be done. Do you ever watch someone working for an hourly rate, say perhaps a doorman, or taxi driver and he or she are quite old? I have respect for people in this capacity (they are working hard, which I will always respect), but I also acknowledge the fact that never figured “it” out. They continued to work and pay the bills just getting by for the majority of their life. Now there is nothing wrong with this to be honest, and everyone has different goals and aspirations. For instance, if your goal is to be an amazing parent, the being rich might not be a priority, and would probably draw away from your other goal.

Recognition of Talents

A large piece of becoming rich is recognizing that you might have a strong knack for something. Part of this is luck (you need to try many things first, the sooner you try more the thing, the luckier you are) but it can make a difference, a major difference. For example, I’l bet good money there is someone out there with an extremely talented voice, that does not see the value of it, and therefore remains poor, while someone like The Weeknd (singer) recognized this talent, acted on it, and made over $50 million last year. Are we getting the picture?

Ownership

Another important piece is ownership. Most people that are wealthy started a business that they owned. They recognized that being an owner is far better (for sure riskier) than being an employee. A simple example, Time Inc Magazine was just sold for $1.8 billion; if you own 50% of Time Inc you just made $900 million through the sale; let me know when you see someone sell their employment contract for $900 million and I will rest my case.

In the end there are a million ways to get rich, but they all start with hard work, recognition of talents, recognition that being rich is in fact a real tangible thing, and, a bit of luck.

And…Good luck!

 

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