Rich People Think Differently

8 Ways Rich People Think Differently


When you think about a rich person, do you picture fancy cars, big houses, and a life of luxury?

When observing truly wealthy people, it turns out they don’t often look like the Hollywood-type wealthy folks we might imagine. Most of the truly wealthy don’t appear in the media – they’re more like “The Millionaire Next Door” types flying beneath the paparazzi radar.

We could check the dictionary to see what the definition of “rich” or “wealthy” is. I’m not going to bother. My home-grown definition is that the rich have more assets than liabilities. The richer have even more assets than they do liabilities, and so on.

So how does one become wealthy? Well, if we look at the habits of wealthy people, we find they do a few things differently than the rest of the general population. They:

  1. Live well below their incomes
  2. Don’t use consumer credit
  3. Track what they spend money on
  4. Likely drive a used car
  5. Believe that financial independence is more important than high social status
  6. Sees status symbols for what they are
  7. Spend their time in ways that promote building wealth
  8. Take time to budget

Let’s talk about these more in depth.

1. Wealthy People Live Below Their Means

A wealthy person might make $50,000 or less. Does that make you rich automatically if you earn more? No way! There are plenty of families that bring in way more than $50,000 that are living paycheck to paycheck. What makes the family with a $50,000 income rich? They live on $40,000 of it.

What good will saving that $10,000 each year possibly do? If they put away $833 ($10,000/12 months) each month into a retirement account, such as a Roth IRA, in 40 years, making an average of 8% per year, they would have $2,909,173. This unrealistically assumes that they never make more than $50,000 per year!

2. Wealthy People Don’t Use Consumer Credit

I’ll bet you actually have a few neighbors who are worth several million dollars, but you would never know. And frankly, they like it that way.

If wealthy people have a credit card, they don’t use it like a credit card. Instead, they use it like a debit card, paying the balance off in full every month and refusing to carry a balance. They see through the trap of debt.

3. Wealthy People Track What They Spend

Truly wealthy people spend a few hours each month looking over their finances. They know where they stand, and if they’re spending less than they earn.

Can you believe that some millionaires even keep their receipts and record every purchase? Many of them do. This is one thing that has enabled them to live within their means. They know where their money goes and how it’s used – and it pays big dividends in the end.

4. Wealthy People Probably Drive Used Cars

For the wealthy person making $50,000 a year, do you think they drove a used car? Living on $40,000 a year, you bet they did. When they’re sitting on almost $3 million, do you think they still drive used cars? Oddly enough, they probably do. Because they understand and appreciate the value of a dollar.

Could they buy a new car if they wanted? Sure. If they put their nest egg into an ultra-conservative investment making just 4% per year, they would be making a passive income of $116,367 every year.

Where did their unbelievable financial ability come from? They lived well below their income.

5. Rich People Think Financial Independence is Better Than Status

Let’s admit it. Social pressure is very, very strong. It’s hard to resist buying name-brand clothes, a new car (newer than the neighbors!), or even a larger house.

A wealthy person has an invaluable perspective when it comes to these social pressures. Rich people think differently about these social pressures. There is no substance behind them. There is no reason to heed them.

The irony about keeping up with the Jones’s is that the Jones family is completely broke. They’re leveraged to the hilt and are enjoying the use of other people’s money. If dad comes home with a bonus, they blow it. They don’t think about possibly putting that windfall towards the principal on their house. They don’t consider paying down the debt they owe on their vehicles. The Jones family is broke! Stop trying to keep up with them!

6. Rich People See Through Status Symbols

The rich see this phenomenon clearly. It’s as if they have financial x-ray vision. What do you see when your colleague (who makes just as much as you do) drives up in a brand new car that is valued at half his annual income? Most people see a very nice car. Most people then see an ad for 0% APR for six months on all new vehicles, with a cash-back bonus of $2,000. And most people would go out and “match” their colleague – or maybe even raise him one. Most people are broke.

The wealthy person, equipped with financial x-ray vision, sees a money pit. They see a ball and chain attached to their colleague’s ankle. They see how this person will stress out over something like a $300 emergency because they can’t afford it: all the money is tied up paying back debts.

With financial x-ray vision a rich person sees things as they really are. A rich person doesn’t have to impress anyone with material goods. They are satisfied with financial peace of mind – not the next fad.

7. Rich People Spend Their Time in Ways That Promote Wealth

Let’s face it. All of us have some spare time. And how much time does the average millionaire spend watching television? Virtually none. Why? Because the millionaire recognizes the value of his or her time and uses it for activities that add value to life: spending time with family, developing new skills, reading informational and uplifting books, managing investments, etc.

On average, millionaires read one non-fiction book per month. When was the last time you read a non-fiction book? For what reason? Millionaires seek knowledge to improve their situation.

I challenge you to read one non-fiction book per month starting now (and want one of my favorites on personal finance? Check out The Richest Man in Babylon: it’s an easy read and it’ll teach you more of the secrets of the wealthy). Seek out new knowledge. Turn off the television an hour earlier and read a good book.

8. Wealthy People Spend Time Budgeting

Do wealthy people spend their valuable time budgeting and planning ahead? Of course they do. Many millionaires are in their great financial position because they budget.

It’s been said that at any given time you’re either poor moving toward rich or rich moving toward poor. With a budget, you know exactly where you stand at any given time. Without one, it’s like you’re just aimlessly wandering in the dark. A budget gives you a clear path ahead and a record of your progress so you know exactly where you’re headed.


Keep these ways rich people think differently in the forefront of your mind. Strive to live on less than you earn, treasure financial security over the fleeting fads of society, and spend your time improving yourself, your family, and your financial future. You won’t regret it.

Want to take an essential first step in building wealth from the ground up? The first step is to know if you’re living within your means. Make the process easy with the help of You Need a Budget: your transactions can automatically import and our powerful software will tell you exactly where you stand at the end of each month.