9 Ways the Rich Are Different From the Poor [Observations From an Actual Millionaire]

In 1926, F. Scott Fitzgerald wrote that the rich are different from you and me.  Ernest Hemingway famously replied, yes, they have more money.

I love this exchange because it captures perfectly the two competing views on money and those who have it.  There are those who believe that the rich have some innate quality that separates them from the rest of us, while the more cynical view the rich as mere beneficiaries of good luck or advantaged upbringing.  

Obviously, if you inherited your wealth and did nothing to amplify what you received, then you fall into the latter camp.  But if someone started with nothing and built their wealth, that doesn’t happen by standing still.  There are things they did that catapulted them to that status.  

The vast majority of millionaires fall into this category.  According to a study conducted by Fidelity Investments 88% of millionaires are self-made.  

Some people will look at that statistic and be angered by it because it casts a harsh spotlight on them if they haven’t achieved that milestone, but I look at it the opposite way.  That statistic says to me that you don’t need a silver spoon in your mouth to make it.  

It certainly was the case for me.  I am an immigrant and grew up in a very low income area of New York City.  In my early twenties, I was bad at managing money and was in six figure debt, but climbed my way out and am not a multi-millionaire.

So I have been poor and I have been rich.  I can personally see what differences in my mindset and actions led me from poverty to affluence.  That’s what I am going to share in this article.  Let’s get into it.

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Number 1: The Rich Believe They Are Not Ordinary

No one is going to move up the economic ladder if they believe they are destined to stay where they are.  Your mindset is going to dictate your actions.  If you have a negative mindset where you believe you are incapable of achieving financial success or you are just happy to stay where you are, then you will never become rich.

So you need to believe you are not ordinary. You need to understand that if you follow the pack, you will get no further than that pack.  You need to have unshakable confidence that you are destined for more.  These are table stakes.  

Number 2: The Rich Do Not Trade Money For Time

When I was younger, I did not fully understand the value of time.  It seemed limitless, but now that I have grown older, I realize that time is the single biggest restraint that we face in life.  Everything is subservient in value to time.  

And if you are trading your time for money, you are going to be naturally limited in how much you can make.  For example, if you get paid $20 per hour and work an 8 hour day, then the most you can make in a day is $160.  Even if you work 365 days a year, you will only make $58,400.  

But if you own a business, you can make far more than that because the sky’s the limit.  If you strike on the right idea and offer a great product or service, your sales from that product can generate millions.  This is called scalability and the rich understand that this is how you make real money.  

Number 3: The Rich Believe That Only Actions Lead To Results

The rich understand that wealth is generally achieved only through action.  They do not believe in luck.  They believe in preparation, planning and persistence.

So if you are waiting for the lottery to hit or dream of becoming wealthy but are not taking concrete steps to get there, you will always be dreaming and waiting.

Number 4: The Rich Do Not Make Excuses

Everyone fails.  Any meaningful goal, especially one that is as valuable and difficult to achieve as becoming rich is going to have set backs and failures along the way.

The rich understand this and they do not make excuses when failure happens.  Instead, they learn not to repeat the mistake that caused the failure.  But if you are constantly looking for excuses, you will never get anywhere because an excuse places the blame on someone or something that is outside your control.  

Excuses make you weak and put you in a position of powerlessness.  The rich understand that no one gets rich by blaming others.  Instead, take full responsibility for your failures, learn from your mistakes and start blasting through obstacles as they come.  

Number 5: The Rich Take Measured Risks 

You’ve all heard the old saying, nothing ventured, nothing gained.  It’s a cliche, but it absolutely rings true when it comes to building wealth.  The rich know that returns and risk go hand in hand and they understand that some level of risk has to be accepted if you want to make money.

That being said, you cannot be reckless in your investments or you will lose your shirt.  So you need to understand what risks are involved in an investment or business enterprise and find ways to manage that risk down to an acceptable level.  

This could include diversifying your investments, finding experienced and capable managers to oversee your business interests, or connecting with mentors who can expertly guide you through rough patches.  

Number 6: The Rich Understand How Money Works

The rich are often obsessed about learning how money works.  To be clear, the rich have diverse interests just like everyone else, such as sports, music, movies, and so on.

But self-made millionaires all tend to have a common thread when it comes to learning about money.  That’s because they understand that better knowledge leads to greater wealth, especially in this fast-paced information age.  

Whether it is learning about money making strategies, finding ways to intelligently control expenses, or understanding taxes and estate planning, the wealthy are committed to constantly educating themselves on ways to maximize and strengthen their financial position.

Number 7: The Rich Take the Long View

I have a relative that seems to always be making poor decisions and this has led to a gradual downward spiral in their life.  What’s sad is that they are smart, kind and a wonderful person overall.  But they always seem to be reacting to life and making decisions based on solving short term issues.

But this is a recipe for financial disaster.  The wealthy take a longer term view.  They may sacrifice in the short term by living below their means and investing the money into good investments.  They know that in 10 or 15 years, their long term view will pay off.

Here’s a perfect example of what I am talking about.  I know of one finance executive who took a pay cut to take on a role that they felt was needed to fill in a gap in their resume.  It seemed counterintuitive and definitely carried short term penalties.  

But they had the long view in mind.  That executive eventually became CFO of the company because they had a complete skillset and body of experience, which would not have been the case if they hadn’t taken on that role.

Number 8: The Rich Use Leverage

In the financial world, leverage is the use of other people’s money to amplify returns.  In most cases, this means debt, although it could come in other forms.

How does this work?  Let’s take real estate as a simple example.  If you buy a $100,000 house with case and rent it out for $1,000 per month, you will generate a 12% return in one year just on the cash flow.  

If the property goes up in value by 3% or $3,000 over that same year, you will have a combined return of 15%.  Of course, I am oversimplifying here, because there will be additional costs associated with operating a rental property like property taxes and repairs, but let’s use these numbers for the sake of simplicity.

Now if you buy that same house with an 80% mortgage, you only put down $20,000.  If you rent it out for $1,000 and pay $800 in mortgage payments, you will have $2,400 in cash flow.  You will still have the $3,000 increase in value as in the prior example, but instead of a 15% return, you have a 27% return because you only put $20,000 down.  

That’s the power of leverage.

Number 9: The Rich Do Not Care What Others Think

When I first started my wealth journey, I made a lot of mistakes.  I could tell that some people secretly celebrated when I failed.  When I told people about the things I was trying, many subtly rolled their eyes or made demeaning comments like, let me know how that works out for you.

But I really didn’t care.  I guess it goes back to the first point I made around believing that you are destined for more.  I knew these same people would be in the exact same place 20 years from now.  I knew I wouldn’t.

The rich don’t care what others think because they don’t want or need the approval of people they know they will surpass in time.  

Now I know that sounds arrogant, but you need to have this type of confidence if you are going to go anywhere.


So there you have it.  Nine ways that the rich are different from the poor and some tips on how you can use this knowledge to achieve financial success.  Hope this has been helpful and best of luck on your financial journey!