I recently came across an interesting book about why rich people “are rich,” and I thought I should share some of the contents with you while waiting for stock market leads.
The book is entitled “How Rich People Think” and written by Steve Siebold, a “self-made multimillionaire who has interviewed 1,200 of the world’s wealthiest people during the past 30 years.”
Siebold was once deep in debt. He and his wife had to live with his parents to save money. Like the average person, he was confounded as to why the good life was elusive. He said the world seemed to only favor those who were born to be rich or, worse, to those who resort to deceit and dishonesty.
He later realized that regardless of one’s current situation, there was no reason for him or her to be poor. Money is not that difficult to earn, he said. The streets are practically paved with gold, he added.
He said the rich concentrates on earning or making money while the average individual relies on saving to build wealth. This simple difference is all that separates the rich people from the average individuals.
Siebold found out that ordinary people “put too much emphasis on saving.” Doing so, “they start to neglect earning, in the first place.”
Rich people, in contrast, “reject the nickel-and-dime thinking of the masses and focus their mental energy where it belongs: on the big money.” Nevertheless, rich people don’t abandon the practice of saving, for the act of saving is still part of building wealth.
Another difference is the use of leveraging or what is defined as “the use of ‘something’ to maximum advantage.” The rich strategically make use of their contacts, credibility and resources to maximize results.
Rich people also think about money in non-linear terms. Unlike ordinary people, rich people do not regard money as a direct result of time.
Ordinary people, on the other hand, believe that “the only way to earn more money—with the exception of raises and bonuses—is to work more hours.”
Rich people know big money requires thinking outside the box—and they already have the mastery over this. This brings back memories of the Internet boom. Fortunes were created overnight “with the right idea at the right time.”
Rich people are also able to make money through the use of logic.
Average individuals, meanwhile, are ruled by emotions. Unfortunately, these emotions come out strong due to our extensive and intensive exposure to “middle-class values and beliefs” that were ingrained into our minds early in life.
In order to become rich, therefore, he advised that “you stop thinking about money through the eyes of emotion and be free of the psychological chains [that] bind you to it—and be free to earn all you can.”
A good compromise between the use of emotion and logic is to use the latter to dictate your financial strategies and the former to motivate yourself to stick to it.
Lastly, rich people “believe being rich is a right.” This is exactly the opposite of what average individuals believe—that “being rich is a privilege awarded only to lucky people.”
Rich people particularly think they have the right to be rich when they create value for others. They believe that when they make life better and easier for others, it’s only fair that they have the right to be rich.
This thinking may cast rich people “as materialistic, self-absorbed and greedy.” But, this is a right they believe must come along when they bring about productivity and/or create value.
Bottom line spin
Siebold advised we stop believing self-made millionaires are plain lucky.
Also, regardless of our education level, IQ score, or performance in school, he said that we have everything it takes to become a millionaire.
Once more, we are advised to stop thinking about money out of fear and/or scarcity. They limit our productivity and ability to earn more.
So, if you are already rich, Siebold has this to say: “Keep thinking the way you are thinking now, if not, maybe it’s time to change the way you think about money.”
(The writer is a licensed stockbroker of Eagle Equities, Inc. You may reach the Market Rider at marketrider@inquirer.com.ph, densomera@msn.com or at www.kapitaltek.com)