The United States is certainly a land divided between the rich and poor. The economic gap has never been wider in this country. While the great recession changed the way money works in the US, personal money management skills go a long way towards making your money work for you.
I’m a low-income earner and becoming well versed in financial literacy has changed my financial outlook for the better. Detailed attention, dedication, and a belief that I could fight tooth and nail to change my financial picture (as well as some built-in privileges) helped make a difference between staying broke and building wealth for me.
What is the real difference between the rich and poor? What is in an individuals control when it comes to building wealth?
I’m not the first person to wonder what the difference between the rich and poor is. Two authors and speakers, in particular, come to mind when it comes to that very thing: Tom Corley and T. Harv Eker.
Tom Corely is the author of Rich Habits – The Daily Success Habits of Wealthy Individuals and a speaker. T. Harv Eker is the author of ‘Secrets of the Millionaire Mind’ and also a motivational speaker.
Both men have studied rich people’s habits, both financial and personal. Both have written and spoken extensively about the mindsets and habits that separate the rich from the poor. So what do these two men have to say about it?
Tom Corley spent five years studying and profiling rich people (people who made more than $160,000) and poor people (people who made $35,000 or less) to come up with his list. Tom takes a holistic approach to rich habits. It’s not just about financial decisions, but everyday decisions that affect your bigger picture. For example, a rich habit that he identifies is reading. Continuing to learn and spending less time in front of the tv is a rich habit.
Tom also identifies exercise, emotional control, networking and listening as rich habits. On the money side, spending less than you earn, not gambling, and tracking expenses are rich habits.
Eker believes that everyone possesses a “financial blueprint,” or an internal script that controls our relationship with money. That includes earning it, spending it, and saving it. Our blueprints are created through absorbing the money messages in our lives- how people around us (like parents and friends) behave around money influences our relationship with money.
For Eker, there are 17 ‘wealth files’ to a rich financial blueprint than a poor financial footprint.
- Rich people believe: “I create my life.” Poor people believe: “Life happens to me.”
- Rich people play the money game to win. Poor people play the money game to not lose.
- Rich people are committed to being rich. Poor people want to be rich.
- Rich people think big. Poor people think small.
- Rich people focus on opportunities. Poor people focus on obstacles.
- Rich people admire other rich and successful people. Poor people resent rich and successful people.
- Rich people associate with positive, successful people. Poor people associate with negative or unsuccessful people.
- Rich people are willing to promote themselves and their value. Poor people think negatively about selling and promotion.
- Rich people are bigger than their problems. Poor people are smaller than their problems.
- Rich people are excellent receivers. Poor people are poor receivers.
- Rich people choose to get paid based on results. Poor people choose to get paid based on time.
- Rich people think “both.” Poor people think “either/or.”
- Rich people focus on their net worth. Poor people focus on their working income.
- Rich people manage their money well. Poor people mismanage their money well.
- Rich people have their money work hard for them. Poor people work hard for their money.
- Rich people act in spite of fear. Poor people let fear stop them.
- Rich people constantly learn and grow. Poor people think they already know.
At face value, I agree with these things. I know that tracking my income allowed me to make monster debt payments. Learning new skills like social media marketing allowed me to barter for higher wages at some jobs. Focusing on what kind of value I was able to offer to a company helped shift my mindset, and helped me negotiate more as well as feel better overall.
These habits work. That can’t be denied. Self-motivation and persistence are both hugely powerful tools to changing your circumstances. If you do cut expenses, learn valuable skills, save and invest smartly, and generally act deliberately with your money and life, you will see an improvement in your fortune. (Literally and figuratively.
However, neither of these men do a very good job of talking about the broken system that we live in, the privileges that some people have and others do not, and ways to survive if you’re not already in a solid money place.
We still tout college as a must-do, when the reality is that it often burdens people with tens of thousands of dollars of debt and does not guarantee anyone a job. The wage gap between men and women isn’t expected to close for 170 years around the world. When you’re already not making money, a change in mindset can definitely be a good thing
When you’re already not making money, a change in mindset can definitely be a good thing. But it might not be the only thing to change your circumstances. And that’s worth talking about.
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Kara Perez is the original founder of From Frugal To Free. She is a money expert, speaker and founder of Bravely Go, a feminist financial education company. Her work has been featured on NPR, Business Insider, Forbes, and Elite Daily.