21 ways rich people think

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compounder
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21 ways rich people think

Post by compounder » Thu Sep 06, 2012 10:16 am

Similar to "The Millionaire Next Door".

From the article:
"Steve Siebold, author of "How Rich People Think," spent nearly three decades interviewing millionaires around the world to find out what separates them from everyone else.

It had little to do with money itself, he told Business Insider. It was about their mentality."

http://finance.yahoo.com/news/21-ways-r ... ently.html

sunnyday
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Re: 21 ways rich people think

Post by sunnyday » Thu Sep 06, 2012 10:27 am

Two things I would like to know are:

How much do IQ and opportunity come into play?

Are rich people happier?

Confused
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Re: 21 ways rich people think

Post by Confused » Thu Sep 06, 2012 10:33 am

From the article:

"7. Average people earn money doing things they don't love. Rich people follow their passion."

That's the one I don't get. Someone recently asked me what I'd do if money was no object. Personally, I'd watch TV, play video games, surf the Internet, hit up the bowling alley, grab my golf bag, visit friends, etc. Then they clarified, "No, what would you do for a job if money was no object?" I wouldn't do a thing. Why would I have a job if I didn't need money?

I don't understand how to align "passion" with "earn money."

detroitbabu
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Re: 21 ways rich people think

Post by detroitbabu » Thu Sep 06, 2012 10:36 am

sunnyday wrote: Are rich people happier?


Watch a documentary called "Happy". It is available on Netflix streaming.

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HomerJ
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Re: 21 ways rich people think

Post by HomerJ » Thu Sep 06, 2012 10:38 am

Confused wrote:From the article:

"7. Average people earn money doing things they don't love. Rich people follow their passion."

That's the one I don't get. Someone recently asked me what I'd do if money was no object. Personally, I'd watch TV, play video games, surf the Internet, hit up the bowling alley, grab my golf bag, visit friends, etc. Then they clarified, "No, what would you do for a job if money was no object?" I wouldn't do a thing. Why would I have a job if I didn't need money?

I don't understand how to align "passion" with "earn money."


Yeah I agree...

Also correlation doesn't equal causation. Following your passion doesn't make you rich. My sister is an artist. It's her passion. She ain't rich. Just because there are some millionaire artists doesn't mean that following your passion makes you rich.

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HomerJ
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Re: 21 ways rich people think

Post by HomerJ » Thu Sep 06, 2012 10:38 am

detroitbabu wrote:
sunnyday wrote: Are rich people happier?


Watch a documentary called "Happy". It is available on Netflix streaming.


Boo. Give us a quick summary!

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Re: 21 ways rich people think

Post by NYBoglehead » Thu Sep 06, 2012 10:39 am

Confused wrote:From the article:

"7. Average people earn money doing things they don't love. Rich people follow their passion."

That's the one I don't get. Someone recently asked me what I'd do if money was no object. Personally, I'd watch TV, play video games, surf the Internet, hit up the bowling alley, grab my golf bag, visit friends, etc. Then they clarified, "No, what would you do for a job if money was no object?" I wouldn't do a thing. Why would I have a job if I didn't need money?

I don't understand how to align "passion" with "earn money."


+1

I know a few investment banker types who are at the office at 8pm on a Saturday night when the rest of the group is watching a college football game over beers. While many people earned their wealth pursuing their passion, I'd argue that few people have an absolute passion for analyzing spreadsheets and putting powerpoint presentations together.

The word "rich" is a subjective term, anyhow. There is no fixed dollar amount or life circumstance that defines rich.
Last edited by NYBoglehead on Thu Sep 06, 2012 11:12 am, edited 1 time in total.

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HomerJ
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Re: 21 ways rich people think

Post by HomerJ » Thu Sep 06, 2012 10:45 am

This Siebold guy is a pretty much a snobby jerk...

This last one made me laugh...

Average people believe they must choose between a great family and being rich. Rich people know you can have it all.

The idea the wealth must come at the expense of family time is nothing but a "cop-out", Siebold says.

"The masses have been brainwashed to believe it's an either/or equation," he writes. "The rich know you can have anything you want if you approach the challenge with a mindset rooted in love and abundance."


What exactly is a "mindset rooted in love and abundance"?

And every biography I've ever read of the very rich includes divorce (usually multiple) and kids who never saw their father.

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Re: 21 ways rich people think

Post by Gauntlet » Thu Sep 06, 2012 10:52 am

Confused wrote:From the article:

"7. Average people earn money doing things they don't love. Rich people follow their passion."

That's the one I don't get. Someone recently asked me what I'd do if money was no object. Personally, I'd watch TV, play video games, surf the Internet, hit up the bowling alley, grab my golf bag, visit friends, etc. Then they clarified, "No, what would you do for a job if money was no object?" I wouldn't do a thing. Why would I have a job if I didn't need money?

I don't understand how to align "passion" with "earn money."


This made me chuckle. I agree with you. Maybe I would add some volunteer work. In fact, sometimes I think I'm so into personal finance because I love doing nothing. I want to try to figure out how I can afford to do nothing.

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Re: 21 ways rich people think

Post by Rob5TCP » Thu Sep 06, 2012 11:03 am

HomerJ wrote:
detroitbabu wrote:
sunnyday wrote: Are rich people happier?


Watch a documentary called "Happy". It is available on Netflix streaming.


Boo. Give us a quick summary!



Here is a good summary from IMDB

http://www.imdb.com/title/tt1613092/

chaz
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Re: 21 ways rich people think

Post by chaz » Thu Sep 06, 2012 11:05 am

What separates them from everyone else is their money.
Chaz | | “Money is better than poverty, if only for financial reasons." Woody Allen | | http://www.bogleheads.org/wiki/index.php/Main_Page

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Re: 21 ways rich people think

Post by XtremeSki2001 » Thu Sep 06, 2012 11:18 am

NYBoglehead wrote:
Confused wrote:From the article:

"7. Average people earn money doing things they don't love. Rich people follow their passion."

That's the one I don't get. Someone recently asked me what I'd do if money was no object. Personally, I'd watch TV, play video games, surf the Internet, hit up the bowling alley, grab my golf bag, visit friends, etc. Then they clarified, "No, what would you do for a job if money was no object?" I wouldn't do a thing. Why would I have a job if I didn't need money?

I don't understand how to align "passion" with "earn money."


+1

I know a few investment banker types who are at the office at 8pm on a Saturday night when the rest of the group is watching a college football game over beers. While many people earned their wealth pursuing their passion, I'd argue that few people have an absolute passion for analyzing spreadsheets and putting powerpoint presentations together.

The word "rich" is a subjective term, anyhow. There is no fixed dollar amount or life circumstance that defines rich.


In this case, I think some love to be competitive and beating everyone else drives them to be good at what they do.
A box of rain will ease the pain and love will see you through

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Re: 21 ways rich people think

Post by Grt2bOutdoors » Thu Sep 06, 2012 11:30 am

XtremeSki2001 wrote:
NYBoglehead wrote:
Confused wrote:From the article:

"7. Average people earn money doing things they don't love. Rich people follow their passion."

That's the one I don't get. Someone recently asked me what I'd do if money was no object. Personally, I'd watch TV, play video games, surf the Internet, hit up the bowling alley, grab my golf bag, visit friends, etc. Then they clarified, "No, what would you do for a job if money was no object?" I wouldn't do a thing. Why would I have a job if I didn't need money?

I don't understand how to align "passion" with "earn money."


+1

I know a few investment banker types who are at the office at 8pm on a Saturday night when the rest of the group is watching a college football game over beers. While many people earned their wealth pursuing their passion, I'd argue that few people have an absolute passion for analyzing spreadsheets and putting powerpoint presentations together.

The word "rich" is a subjective term, anyhow. There is no fixed dollar amount or life circumstance that defines rich.


In this case, I think some love to be competitive and beating everyone else drives them to be good at what they do.


Beating? A funny sort of way to describe it. Many rich people like to think they earned their money fair and square, but let's be realistic quite a few of the noveau rich got there by less than honorable means.
"One should invest based on their need, ability and willingness to take risk - Larry Swedroe" Asking Portfolio Questions

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Re: 21 ways rich people think

Post by Dave76 » Thu Sep 06, 2012 11:44 am

4. Average people think the road to riches is paved with formal education. Rich people believe in acquiring specific knowledge.

"Many world-class performers have little formal education, and have amassed their wealth through the acquisition and subsequent sale of specific knowledge," he writes.

"Meanwhile, the masses are convinced that master's degrees and doctorates are the way to wealth, mostly because they are trapped in the linear line of thought that holds them back from higher levels of consciousness...The wealthy aren't interested in the means, only the end."

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Re: 21 ways rich people think

Post by NYBoglehead » Thu Sep 06, 2012 11:48 am

GRT2BOUTDOORS wrote:
XtremeSki2001 wrote:
NYBoglehead wrote:
Confused wrote:From the article:

"7. Average people earn money doing things they don't love. Rich people follow their passion."

That's the one I don't get. Someone recently asked me what I'd do if money was no object. Personally, I'd watch TV, play video games, surf the Internet, hit up the bowling alley, grab my golf bag, visit friends, etc. Then they clarified, "No, what would you do for a job if money was no object?" I wouldn't do a thing. Why would I have a job if I didn't need money?

I don't understand how to align "passion" with "earn money."


+1

I know a few investment banker types who are at the office at 8pm on a Saturday night when the rest of the group is watching a college football game over beers. While many people earned their wealth pursuing their passion, I'd argue that few people have an absolute passion for analyzing spreadsheets and putting powerpoint presentations together.

The word "rich" is a subjective term, anyhow. There is no fixed dollar amount or life circumstance that defines rich.


In this case, I think some love to be competitive and beating everyone else drives them to be good at what they do.


Beating? A funny sort of way to describe it. Many rich people like to think they earned their money fair and square, but let's be realistic quite a few of the noveau rich got there by less than honorable means.


Why so negative today? Some people get rich screwing over other people, for sure. This will never change. Most wealthy people earned their money putting in an honest day's work. I've never harbored any resentment for those that are rich and do not consider myself a victim of their success by not being wealthy myself. I save enough now and will continue to throughout my working life to provide for a stable, happy retirement. Just because others might have more toys than me does not mean they are dishonorable people.

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Re: 21 ways rich people think

Post by SeattleCPA » Thu Sep 06, 2012 11:49 am

In my CPA practice, which is located in Redmond, WA home to Microsoft, I've had the chance to work with a number of wealthy and very wealthy individuals over the decades.

My own, admittedly anecdotal, sense is that little of the information and analysis presented in the "ways rich people think" stuff rings true.

BTW, two of the things that I only become more and more confident about are (1) that high incomes, windfalls and the wealth that may result are very random and luck-related. I thought this long before Malcolm Gladwell discussed this in his book "Outliers" because I so often see people financially succeed due to good luck. BTW, this is not to say that a millionaire or billionaire isn't smart or doesn't work hard. IMHO, she or he probably is smart and probably does work hard. But there are actually lots of people who are smart and work hard... (2) Very high income and even substantial wealth tend to be surprisingly transitory. The Federal Reserve has had some studies about this including this one, http://www.federalreserve.gov/pubs/feds ... 1pap.pdf... and I'll say that I've also noticed again and again this weirdness... wealth seems to evaporate.

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Re: 21 ways rich people think

Post by staythecourse » Thu Sep 06, 2012 11:53 am

Confused wrote:From the article:

"7. Average people earn money doing things they don't love. Rich people follow their passion."

That's the one I don't get. Someone recently asked me what I'd do if money was no object. Personally, I'd watch TV, play video games, surf the Internet, hit up the bowling alley, grab my golf bag, visit friends, etc. Then they clarified, "No, what would you do for a job if money was no object?" I wouldn't do a thing. Why would I have a job if I didn't need money?

I don't understand how to align "passion" with "earn money."


I'm not saying a I agree, but most would say this is the EXACT reason some are more succesful then others. The "passion" is about doing something constructive and not something slothful. A "rich" person is more likely to see how to build something and get enjoyment from that and NOT from just sitting around and watchin t.v.

I would consider myself succesful, but to empathize that if I had a chance I would rather relax and do nothing.

Good luck.
"The stock market [fluctuation], therefore, is noise. A giant distraction from the business of investing.” | -Jack Bogle

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Re: 21 ways rich people think

Post by Confused » Thu Sep 06, 2012 12:00 pm

staythecourse wrote: if I had a chance I would rather relax and do nothing.


Exactly. Wouldn't most people?

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Re: 21 ways rich people think

Post by letsgobobby » Thu Sep 06, 2012 12:03 pm

SeattleCPA wrote:In my CPA practice, which is located in Redmond, WA home to Microsoft, I've had the chance to work with a number of wealthy and very wealthy individuals over the decades.

My own, admittedly anecdotal, sense is that little of the information and analysis presented in the "ways rich people think" stuff rings true.

BTW, two of the things that I only become more and more confident about are (1) that high incomes, windfalls and the wealth that may result are very random and luck-related. I thought this long before Malcolm Gladwell discussed this in his book "Outliers" because I so often see people financially succeed due to good luck. BTW, this is not to say that a millionaire or billionaire isn't smart or doesn't work hard. IMHO, she or he probably is smart and probably does work hard. But there are actually lots of people who are smart and work hard... (2) Very high income and even substantial wealth tend to be surprisingly transitory. The Federal Reserve has had some studies about this including this one, http://www.federalreserve.gov/pubs/feds ... 1pap.pdf... and I'll say that I've also noticed again and again this weirdness... wealth seems to evaporate.

It's funny, you and I have opposite anecdotal experiences. In my work as a psychiatrist in community mental health, I meet a lot of poor people and their families. I get to know them over many years. I would say I am floored *regularly* by the way my patients and their families think about money. It is absolutely 180 degrees from the way I was raised (middle class).

A typically sad example: a disabled woman and her laid-off husband struggle to get by on food stamps, a small amount of SS disability, and the generosity of neighbors. Their monthly expenses are probably under $1000 for 2 of them. Mom dies, leaving nearly $100,000 of inheritance. During the next 12 months, husband stops looking for work, they take a couple of trips, they make a lot of comments about how "we can afford this" and "now we can afford that." In the 13th month... it is all gone. And not a thing to show for it, except credit card bills. Lots of complaints about how various agencies, societal structures, etc., are unfair and out to get them (no, she wasn't schizophrenic :D ).

It's like they were afraid of money. Afraid to hold it. I see this so commonly. Since I am not a financial advisor I do not make recommendations other than, "You really ought to talk to a fee-only financial advisor." Not one of my poor patients with a windfall has yet done that.

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Re: 21 ways rich people think

Post by norookie » Thu Sep 06, 2012 12:12 pm

Confused wrote:
staythecourse wrote: if I had a chance I would rather relax and do nothing.


Exactly. Wouldn't most people?
I doubt it. Sitting on your as :wink: is not rewarding. Although it seems to be for my sisters kids, and many youth. I'm not talking about rewarding with cash either. JMO.
" Wealth usually leads to excess " Cicero 55 b.c

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Re: 21 ways rich people think

Post by Grt2bOutdoors » Thu Sep 06, 2012 12:30 pm

NYBoglehead wrote:
GRT2BOUTDOORS wrote:Beating? A funny sort of way to describe it. Many rich people like to think they earned their money fair and square, but let's be realistic quite a few of the noveau rich got there by less than honorable means.


Why so negative today? Some people get rich screwing over other people, for sure. This will never change. Most wealthy people earned their money putting in an honest day's work. I've never harbored any resentment for those that are rich and do not consider myself a victim of their success by not being wealthy myself. I save enough now and will continue to throughout my working life to provide for a stable, happy retirement. Just because others might have more toys than me does not mean they are dishonorable people.


I've known folks who've litterally gone from rags to riches - they put in an honest days work and then some. I've also known folks born with the golden spoon in their mouth and those who as you say "screw people over". I prefer the former over the latter. From experience, those who work to obtain wealth/assets/security tend to appreciate themselves and others more than those who don't.
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staythecourse
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Re: 21 ways rich people think

Post by staythecourse » Thu Sep 06, 2012 12:33 pm

Dave76 wrote:4. Average people think the road to riches is paved with formal education. Rich people believe in acquiring specific knowledge.

"Many world-class performers have little formal education, and have amassed their wealth through the acquisition and subsequent sale of specific knowledge," he writes.

"Meanwhile, the masses are convinced that master's degrees and doctorates are the way to wealth, mostly because they are trapped in the linear line of thought that holds them back from higher levels of consciousness...The wealthy aren't interested in the means, only the end."


That is an interesting point. It is the same mistake that Stanley makes in his famous books on the rich. The same qualities that make one rich (>2 S.D. on the right side of the curve) are the same that make many poor (<2 S.D on the left side). These writers only look at one end of the spectrum.

I would agree someone who "goes for it" may end up like Bill Gates or Zuckerburg, but also may end up losing his seed money with no education to fall back on and working a low level job.

Folks who write these books need to interview on the entrepeneurs who started small business and failed and tell that story as well.

Good luck.
"The stock market [fluctuation], therefore, is noise. A giant distraction from the business of investing.” | -Jack Bogle

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Re: 21 ways rich people think

Post by Grt2bOutdoors » Thu Sep 06, 2012 12:33 pm

letsgobobby wrote:[It's funny, you and I have opposite anecdotal experiences. In my work as a psychiatrist in community mental health, I meet a lot of poor people and their families. I get to know them over many years. I would say I am floored *regularly* by the way my patients and their families think about money. It is absolutely 180 degrees from the way I was raised (middle class).

A typically sad example: a disabled woman and her laid-off husband struggle to get by on food stamps, a small amount of SS disability, and the generosity of neighbors. Their monthly expenses are probably under $1000 for 2 of them. Mom dies, leaving nearly $100,000 of inheritance. During the next 12 months, husband stops looking for work, they take a couple of trips, they make a lot of comments about how "we can afford this" and "now we can afford that." In the 13th month... it is all gone. And not a thing to show for it, except credit card bills. Lots of complaints about how various agencies, societal structures, etc., are unfair and out to get them (no, she wasn't schizophrenic :D ).

It's like they were afraid of money. Afraid to hold it. I see this so commonly. Since I am not a financial advisor I do not make recommendations other than, "You really ought to talk to a fee-only financial advisor." Not one of my poor patients with a windfall has yet done that.


I'm surprised they were still receiving SNAP benefits, I believe there is an asset cut-off for such assistance.
"One should invest based on their need, ability and willingness to take risk - Larry Swedroe" Asking Portfolio Questions

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Re: 21 ways rich people think

Post by hicabob » Thu Sep 06, 2012 12:44 pm

Having recently discovered what an incredible writer Ernest Hemingway was this quote from Cannery Row comes to mind ...

“It has always seemed strange to me...The things we admire in men, kindness and generosity, openness, honesty, understanding and feeling, are the concomitants of failure in our system. And those traits we detest, sharpness, greed, acquisitiveness, meanness, egotism and self-interest, are the traits of success. And while men admire the quality of the first they love the produce of the second.”

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Re: 21 ways rich people think

Post by Confused » Thu Sep 06, 2012 1:04 pm

norookie wrote:
Confused wrote:
staythecourse wrote: if I had a chance I would rather relax and do nothing.


Exactly. Wouldn't most people?
I doubt it. Sitting on your as :wink: is not rewarding. Although it seems to be for my sisters kids, and many youth. I'm not talking about rewarding with cash either. JMO.


And work is "rewarding"? I don't go home from work thinking, "Woo hoo, I programmed some software!" Instead it's, "I'm going home!" I took a six month haitus once from university. Just sat around playing video games and watching The Price is Right. It was awesome. I'd far rather have my time than money. I can always get more money; I can never get more time. I've been called inhuman for my lack of ambition, I'd just rather hang out. Work is: go there, think about what to type, type it, get paid, go home. The only benefit to work is money. Maybe I'm part of that "many youth", but I'm in my mid- to late-20s.

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Re: 21 ways rich people think

Post by downshiftme » Thu Sep 06, 2012 1:11 pm

So much of this article is made up generalizations. I know many rich people who think some of these things and who do not think some of these things. Likewise, I know poor people who do think some of these things, but not all of these things. It doesn't appear that there is any survey or study behind this to assert that rich people are more likely to think any these things. This is just conjecture. But it's getting attention and getting people to read it. I guess that was the objective.

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Re: 21 ways rich people think

Post by FabLab » Thu Sep 06, 2012 1:11 pm

chaz wrote:What separates them from everyone else is their money.


Spot on!

For the most part, the article strikes me as just so much babble.
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Re: 21 ways rich people think

Post by AnimalCrackers » Thu Sep 06, 2012 1:15 pm

Confused wrote:Someone recently asked me what I'd do if money was no object. Personally, I'd watch TV, play video games, surf the Internet, hit up the bowling alley, grab my golf bag, visit friends, etc. Then they clarified, "No, what would you do for a job if money was no object?" I wouldn't do a thing. Why would I have a job if I didn't need money?


You nailed it.

My list of "pursuits" would be only slighly different.
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Re: 21 ways rich people think

Post by interplanetjanet » Thu Sep 06, 2012 1:26 pm

Confused wrote:That's the one I don't get. Someone recently asked me what I'd do if money was no object. Personally, I'd watch TV, play video games, surf the Internet, hit up the bowling alley, grab my golf bag, visit friends, etc. Then they clarified, "No, what would you do for a job if money was no object?" I wouldn't do a thing. Why would I have a job if I didn't need money?

To create something amazing, to change the world...or just a little piece of it.

I don't know about you, but I have probably half a dozen business ideas circling around my head that I would absolutely love to try - one of them has been a hope of mine since before I was a teenager. After my last startup failed I resigned myself to working for someone else at least until my children got old enough to stand on their own two feet. If money wasn't a concern, I'd probably take a month or two off to decompress and relax, but then after that I'd absolutely be trying some of my own projects again, hiring on friends with skills if I had any real chance of success...it's just what I'd want to do.

I would rather be ashes than dust. I shall use my time.

-janet

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Re: 21 ways rich people think

Post by menlo » Thu Sep 06, 2012 1:28 pm

hicabob wrote:Having recently discovered what an incredible writer Ernest Hemingway was this quote from Cannery Row comes to mind ...

“It has always seemed strange to me...The things we admire in men, kindness and generosity, openness, honesty, understanding and feeling, are the concomitants of failure in our system. And those traits we detest, sharpness, greed, acquisitiveness, meanness, egotism and self-interest, are the traits of success. And while men admire the quality of the first they love the produce of the second.”


A nice quote. But John Steinbeck - not Hemingway - wrote Cannery Row.

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Re: 21 ways rich people think

Post by mikem » Thu Sep 06, 2012 1:31 pm

I have a great wife, 3 responsible adult children and 6 grandkids. When I look around, I consider myself "rich". It is not defined by money but by those attributes that were passed to me by my parents and seeing those same attributes in my children.

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Re: 21 ways rich people think

Post by mackstann » Thu Sep 06, 2012 1:34 pm

Confused wrote:
And work is "rewarding"? I don't go home from work thinking, "Woo hoo, I programmed some software!" Instead it's, "I'm going home!" I took a six month haitus once from university. Just sat around playing video games and watching The Price is Right. It was awesome. I'd far rather have my time than money. I can always get more money; I can never get more time. I've been called inhuman for my lack of ambition, I'd just rather hang out. Work is: go there, think about what to type, type it, get paid, go home. The only benefit to work is money. Maybe I'm part of that "many youth", but I'm in my mid- to late-20s.

It really depends on the person. Some people are driven to be industrious, and they become unhappy and dysfunctional if they aren't. Other people are not this way and enjoy mostly leisurely pursuits. Seems pretty simple to me. Different people are different... not exactly earth-shattering news.
It does not matter how slowly you go so long as you do not stop.

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Re: 21 ways rich people think

Post by hicabob » Thu Sep 06, 2012 1:38 pm

menlo wrote:
hicabob wrote:Having recently discovered what an incredible writer Ernest Hemingway was this quote from Cannery Row comes to mind ...

“It has always seemed strange to me...The things we admire in men, kindness and generosity, openness, honesty, understanding and feeling, are the concomitants of failure in our system. And those traits we detest, sharpness, greed, acquisitiveness, meanness, egotism and self-interest, are the traits of success. And while men admire the quality of the first they love the produce of the second.”


A nice quote. But John Steinbeck - not Hemingway - wrote Cannery Row.

right you are - and I just finished it on the plane a week ago! - but as an excuse, names were never my strong point.

freebeer
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Re: 21 ways rich people think

Post by freebeer » Thu Sep 06, 2012 1:52 pm

NYBoglehead wrote:...I'd argue that few people have an absolute passion for analyzing spreadsheets and putting powerpoint presentations together
'

As someone who does a lot of spreadsheets and even more presentations, my passion is not for using the tools but it is for accomplishing results. Excel and Powerpoint are just tools that business leaders use to plan and model, and track and persuade and evangelize.

If you are just analyzing spreadsheets and putting together presentation materials for other people that's another story. I think it's like whether you're a builder or a construction worker. Both use tools but only one has a good chance of having passion about what they do. The same one that, perhaps, could get rich.

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Re: 21 ways rich people think

Post by dziuniek » Thu Sep 06, 2012 2:08 pm

I agree with whoever said that they wouldn't work if they didn't need the money. That's the case for me as well. I don't need a career, a succession of jobs will suffice. I'm there for the paycheck and that's about it.

As long as I can sock away enough into 401K to retire early, I'll be happy.

Maybe that's why people at work keep telling me that I must have many friends outside of work. (so true) - I detest the notion of making someone richer, while being not rich myself :)

I really need to open shop myself. Maybe that will motivate me more.

:D

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Re: 21 ways rich people think

Post by SeattleCPA » Thu Sep 06, 2012 2:12 pm

staythecourse wrote:Folks who write these books need to interview on the entrepeneurs who started small business and failed and tell that story as well.


That would be a total failure for the publisher because no one would want to read the book... but the book would also be valuable and incredibly honest because it'd show what usually happens.

Sort of related... I always think about fact that something like 50,000 businesses are incorporated each month... So that's 500 1% IQ people. Figure another 1% of these people are also super-hardworking and super-compulsive, etc... so it sort of seems like we should get around five new Microsofts or Googles or Facebooks a month... but we don't. :(

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Re: 21 ways rich people think

Post by interplanetjanet » Thu Sep 06, 2012 3:06 pm

letsgobobby wrote:In the 13th month... it is all gone. And not a thing to show for it, except credit card bills. Lots of complaints about how various agencies, societal structures, etc., are unfair and out to get them (no, she wasn't schizophrenic :D ).

It's like they were afraid of money. Afraid to hold it.

I used to do outreach and volunteer work with inner-city families. This story is far too familiar - it really does happen, I saw it myself several times. "Found money", especially, seems to fare poorly with this group.

-janet

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Re: 21 ways rich people think

Post by FafnerMorell » Thu Sep 06, 2012 3:42 pm

One big problem I have with this article is it uses "rich" and "average" without any regard to definition. There's a casual comment that the writer has "studied millionaires", but if that's just someone with more than $1,000,000 in net worth, then that's probably a good chunk of "average" Bogleheads.

Even if the "rich" get narrowed down to something like ">$10,000,000 net worth and a yearly income of >$500,000" there's probably huge variation from someone lucky enough to inherit a fortune from someone like Sam Walton, vs someone who started a company by maxing out their credit card and growing it from a garage to a Fortune 100 giant.

That said, I suspect for a lot of the "self-made" rich (like Steve Jobs or Warren Buffet or J.K. Rowling), the money is far less important to them than accomplishing what is they want to do. As a hypothetical case, imagine a writer who gave away their novel as a free download on Amazon, and managed to attract thousands of fans - they've probably got far more in common with J. K. Rowling than someone who won $50 million in a lottery - despite the monetary difference between them.

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Re: 21 ways rich people think

Post by ryuns » Thu Sep 06, 2012 4:01 pm

hicabob wrote:Having recently discovered what an incredible writer Ernest Hemingway was this quote from Cannery Row comes to mind ...

“It has always seemed strange to me...The things we admire in men, kindness and generosity, openness, honesty, understanding and feeling, are the concomitants of failure in our system. And those traits we detest, sharpness, greed, acquisitiveness, meanness, egotism and self-interest, are the traits of success. And while men admire the quality of the first they love the produce of the second.”


Great quote, even if it is by Steinbeck. Though I didn't read it myself, it seems to describe the feeling that many people had after reading the Steve Jobs's biography. An amazingly successful person who would not, in most people's minds, had more traits in the latter than the former category.
An inconvenience is only an adventure wrongly considered; an adventure is an inconvenience rightly considered. -- GK Chesterton

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norookie
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Re: 21 ways rich people think

Post by norookie » Thu Sep 06, 2012 4:37 pm

Confused wrote:
norookie wrote:
Confused wrote:
staythecourse wrote: if I had a chance I would rather relax and do nothing.


Exactly. Wouldn't most people?
I doubt it. Sitting on your as :wink: is not rewarding. Although it seems to be for my sisters kids, and many youth. I'm not talking about rewarding with cash either. JMO.


And work is "rewarding"? I don't go home from work thinking, "Woo hoo, I programmed some software!" Instead it's, "I'm going home!" I took a six month haitus once from university. Just sat around playing video games and watching The Price is Right. It was awesome. I'd far rather have my time than money. I can always get more money; I can never get more time. I've been called inhuman for my lack of ambition, I'd just rather hang out. Work is: go there, think about what to type, type it, get paid, go home. The only benefit to work is money. Maybe I'm part of that "many youth", but I'm in my mid- to late-20s.
:D I consider under 30 todays youth. I'm certainly not disagreeing with you. You cannot by time, no matter the cost. When I was in my mid to late 20's I'd felt similar. However, by 30 I owned 2 businesses, been working close to FT since 15, and was still irresponsible as I see it now. Yet making more money than I knew what to do with, Really. In hindsight, I could be sitting on 25M to 50M. I still would rather be "productive" than not. Sitting on your as :wink: watching price is right, golfing , gets old real fast! Plus theres the concept set forward here so often. Save "EARLY", and "often", compounding is like magic!
" Wealth usually leads to excess " Cicero 55 b.c

ThatGuy
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Re: 21 ways rich people think

Post by ThatGuy » Thu Sep 06, 2012 5:44 pm

interplanetjanet wrote:
letsgobobby wrote:In the 13th month... it is all gone. And not a thing to show for it, except credit card bills. Lots of complaints about how various agencies, societal structures, etc., are unfair and out to get them (no, she wasn't schizophrenic :D ).

It's like they were afraid of money. Afraid to hold it.

I used to do outreach and volunteer work with inner-city families. This story is far too familiar - it really does happen, I saw it myself several times. "Found money", especially, seems to fare poorly with this group.

-janet


To this day, the females in my life make fun of me for that month when I found a $20 bill, and a $10 bill, and deposited them directly into savings.
Work is the curse of the drinking class - Oscar Wilde

calcium
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Re: 21 ways rich people think

Post by calcium » Thu Sep 06, 2012 6:37 pm

letsgobobby wrote:
SeattleCPA wrote:It's funny, you and I have opposite anecdotal experiences. In my work as a psychiatrist in community mental health, I meet a lot of poor people and their families. I get to know them over many years. I would say I am floored *regularly* by the way my patients and their families think about money. It is absolutely 180 degrees from the way I was raised (middle class).

A typically sad example: a disabled woman and her laid-off husband struggle to get by on food stamps, a small amount of SS disability, and the generosity of neighbors. Their monthly expenses are probably under $1000 for 2 of them. Mom dies, leaving nearly $100,000 of inheritance. During the next 12 months, husband stops looking for work, they take a couple of trips, they make a lot of comments about how "we can afford this" and "now we can afford that." In the 13th month... it is all gone. And not a thing to show for it, except credit card bills. Lots of complaints about how various agencies, societal structures, etc., are unfair and out to get them (no, she wasn't schizophrenic :D ).

It's like they were afraid of money. Afraid to hold it. I see this so commonly. Since I am not a financial advisor I do not make recommendations other than, "You really ought to talk to a fee-only financial advisor." Not one of my poor patients with a windfall has yet done that.

Despite how cracked.com appears on its face, they have some really good articles. One of them described the mindset of those who are poor and grow up with no money and how they react when older and finally having money. It's an interesting read. Point #4 is probably most relevant to your post.

Warning, profanity throughout.
http://www.cracked.com/blog/the-5-stupi ... g-up-poor/

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Re: 21 ways rich people think

Post by bertilak » Thu Sep 06, 2012 6:46 pm

Overall, this is a very depressing thread.

I am not one of those go-get-em entrepreneurs (although I did work long and hard for what I have) but I know some people who are.

The ONLY thing in common between them all is that none of them worked for a salary (except perhaps at the beginning). They worked for themselves. I guess there are a couple of corollaries to that: they worked hard and they worked smart. I guess I can also add that they had confidence in themselves.

They *earned* their money. They are the hardest working people I know. And they seem to have enjoyed their work (despite some rough spots). They are of retirement age now and mufti-millionaires but continue to do their thing.

Best I can tell, they are some of the happiest people I know. Not happy in a jolly-ho-ho way but in a comfortable and satisfied way.

I cannot picture them sitting around playing video games or watching Oprah.
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Re: 21 ways rich people think

Post by lws6772 » Thu Sep 06, 2012 6:56 pm

interplanetjanet wrote:
letsgobobby wrote:In the 13th month... it is all gone. And not a thing to show for it, except credit card bills. Lots of complaints about how various agencies, societal structures, etc., are unfair and out to get them (no, she wasn't schizophrenic :D ).

It's like they were afraid of money. Afraid to hold it.

I used to do outreach and volunteer work with inner-city families. This story is far too familiar - it really does happen, I saw it myself several times. "Found money", especially, seems to fare poorly with this group.

-janet
Hence the phrase, "money" doesn't solve "money problems".

maitrina
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Re: 21 ways rich people think

Post by maitrina » Thu Sep 06, 2012 8:08 pm

"The rich are different from us." - F. Scott Fitzgerald

"Yes, they have more money." - Ernest Hemingway, replying to F. Scott Fitzgerald
"I'd like to live like a poor man with lots of money." - Pablo Picasso

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Mrs.Feeley
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Re: 21 ways rich people think

Post by Mrs.Feeley » Thu Sep 06, 2012 9:53 pm

letsgobobby wrote:It's funny, you and I have opposite anecdotal experiences. In my work as a psychiatrist in community mental health, I meet a lot of poor people and their families. I get to know them over many years. I would say I am floored *regularly* by the way my patients and their families think about money. It is absolutely 180 degrees from the way I was raised (middle class).

A typically sad example: a disabled woman and her laid-off husband struggle to get by on food stamps, a small amount of SS disability, and the generosity of neighbors. Their monthly expenses are probably under $1000 for 2 of them. Mom dies, leaving nearly $100,000 of inheritance. During the next 12 months, husband stops looking for work, they take a couple of trips, they make a lot of comments about how "we can afford this" and "now we can afford that." In the 13th month... it is all gone. And not a thing to show for it, except credit card bills. Lots of complaints about how various agencies, societal structures, etc., are unfair and out to get them (no, she wasn't schizophrenic :D ).

It's like they were afraid of money. Afraid to hold it. I see this so commonly. Since I am not a financial advisor I do not make recommendations other than, "You really ought to talk to a fee-only financial advisor." Not one of my poor patients with a windfall has yet done that.


Do we know the same people? I've seen the phenomenon you describe, but I've seen it in all classes and income categories. Which causes one to wonder whether there's some genetic switch in the brain that relates to the ability to delay gratification, and with that to set out long-term plans and goals and stick to them. And maybe that switch is or isn't activated by upbringing.

For instance I know a couple just like the one you describe. Both were raised by incredibly frugal Depression babies/immigrants who certainly taught all their children how to save and prepare for the future. For most of their working lives they earned far more than my husband and I, although they were strangely always short of money, always in trouble with the IRS, always getting booted from their bank. Then in their 50s physical adversity hit and they are the couple you describe. Their frugal siblings and parents can't make any sense of it. Their plight certainly isn't due to any deficiencies in upbringing.

I always hate articles on "how the rich think" because there are the random-luck factors that aren't always sufficiently taken into account. Many are simply lucky to have the delayed-gratification switch in their brains and with that the ability to plan for the future--and of course the parents who taught you how to make the most of that. Not everyone has that ability and those gifts.

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Re: 21 ways rich people think

Post by Jerilynn » Thu Sep 06, 2012 10:51 pm

sunnyday wrote:Two things I would like to know are:

How much do IQ and opportunity come into play?

Are rich people happier?


There exists some dollar value (I forget the exact definition something to do with % of poverty level) where if you live on less than that, you are probably not happy. Once you are above that threshold, it doesn't matter if you are a few dollars or a few billion dollars above that as far as happiness is concerned.

Also, money CAN buy happiness, assuming you give it away in a specific manner. http://www.ted.com/talks/michael_norton ... iness.html
Cordially, Jeri . . . 100% all natural asset allocation. (no supernatural methods used)

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Re: 21 ways rich people think

Post by mac808 » Fri Sep 07, 2012 3:11 am

I'm an entrepreneur who became financially independent relatively early in life. I tried to take some time off just to travel, watch tv, golf, and pursue some of the other hobbies mentioned in this thread. During the first month, it was nice to have a break and relax. During the second month, it was still nice, but I started to feel bored. I would catch up with friends who were still working, building innovative products or services. I started to feel jealous (not of money, because I didn't really need any more, but of their pride and excitement). I missed executing at the highest levels of my industry and producing work product that I could be proud of. So after another couple months, I jumped back into work. I have a little more balance now (50 hrs/week instead of 80+ usually) but I am genuinely happier now than I was when I had nothing to do all day.

I agree that luck plays a huge role. Some of the hardest working guys I know were never in the "right place" at the "right time" and therefore never struck it rich. The harder you work, the more chances you have to get lucky.

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Re: 21 ways rich people think

Post by Valuethinker » Fri Sep 07, 2012 4:11 am

compounder wrote:Similar to "The Millionaire Next Door".

From the article:
"Steve Siebold, author of "How Rich People Think," spent nearly three decades interviewing millionaires around the world to find out what separates them from everyone else.

It had little to do with money itself, he told Business Insider. It was about their mentality."

http://finance.yahoo.com/news/21-ways-r ... ently.html


'The rich are different from other people. They have more money'.

You need to understand the statistical problem with most of this data.

It's really important for understanding investment arguments in general.

Take a group of rich people, analyze how they think.

You do not know:

- whether this thinking is different from the population at large

- whether they always had this thinking, even before becoming rich

- whether people who thought the same way did not become rich, ie whether this thinking predicts an ability to come rich


Therefore the entire 'Millionaire Next Door' stuff is basically mythological. It doesn't tell us how to become rich.

To understand how these people became rich we'd need a tracking study from their earliest years to strip out other factors like: inheritance, upbringing, education, intelligence, race, gender, health condition etc. We'd need to follow a group of people of thousands over 60-70 years.

This same problem bedevils studies of longevity.

Taleb ('Fooled by Randomness') takes you through this-- the problem with TMND. From a historical perspective, this is all part of the strong strain of Calvinism/ Puritanism in American history, that the successful/rich are 'more Godly' and somehow different from the 'riff raff'. See 1500s Switzerland.

As de Tocqueville pointed out in his classic study of America in the 1830s, without an inherited aristocracy that was just 'rich' by blood and birthright, and closer to the monarch (who was in turn appointed by God), the new Republic had to create a different mythology to justify the social order. Whereas in Europe we can just assume that someone is appointed by history and God to be Gerald Grosvenor, Duke of Westminster, richest landowner in the country and much richer than his cousin, HM the Queen-- you don't have that kind of justification for your social strata. Your rich have to be 'better'.

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Re: 21 ways rich people think

Post by pincognito » Fri Sep 07, 2012 5:48 am

Valuethinker wrote:
compounder wrote:Similar to "The Millionaire Next Door".

From the article:
"Steve Siebold, author of "How Rich People Think," spent nearly three decades interviewing millionaires around the world to find out what separates them from everyone else.

It had little to do with money itself, he told Business Insider. It was about their mentality."

http://finance.yahoo.com/news/21-ways-r ... ently.html


'The rich are different from other people. They have more money'.

You need to understand the statistical problem with most of this data.

It's really important for understanding investment arguments in general.

Take a group of rich people, analyze how they think.

You do not know:

- whether this thinking is different from the population at large

- whether they always had this thinking, even before becoming rich

- whether people who thought the same way did not become rich, ie whether this thinking predicts an ability to come rich


Therefore the entire 'Millionaire Next Door' stuff is basically mythological. It doesn't tell us how to become rich.

To understand how these people became rich we'd need a tracking study from their earliest years to strip out other factors like: inheritance, upbringing, education, intelligence, race, gender, health condition etc. We'd need to follow a group of people of thousands over 60-70 years.

This same problem bedevils studies of longevity.

Taleb ('Fooled by Randomness') takes you through this-- the problem with TMND. From a historical perspective, this is all part of the strong strain of Calvinism/ Puritanism in American history, that the successful/rich are 'more Godly' and somehow different from the 'riff raff'. See 1500s Switzerland.

As de Tocqueville pointed out in his classic study of America in the 1830s, without an inherited aristocracy that was just 'rich' by blood and birthright, and closer to the monarch (who was in turn appointed by God), the new Republic had to create a different mythology to justify the social order. Whereas in Europe we can just assume that someone is appointed by history and God to be Gerald Grosvenor, Duke of Westminster, richest landowner in the country and much richer than his cousin, HM the Queen-- you don't have that kind of justification for your social strata. Your rich have to be 'better'.


Agreed regarding the vapidness of this kind of analysis. Based on what is summarized in the Yahoo piece, to even suggest that his work is based on what could be called "data" is being generous. A quick Look Inside on Amazon indicates that Siebold has in fact identified 100 differences between the middle class and the "world class," rather than a mere 21 differences.
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