Regular readers of this blog probably get tired of me quoting or referencing Dave Ramsey, but that’s not likely to stop anytime soon. One of the phrases you’ll hear Dave spout quite often is something along the lines of, “If you want to be rich, do what rich people do.”
One of the criticisms that’s often hurled at this idea is that many rich people didn’t have to start from the bottom like most of the rest of us—that rich people are only rich because it was handed to them by someone else, or worse, that they got it through cheating and swindling the “lower classes.” Pervasive is the idea that only the rich get richer while the poor get poorer—as if economics were a zero-sum game.
Some tend to cite esoteric means such as luck or serendipity as the driving factors behind the wealthy becoming more wealthy. Still others hold to the opinion that it’s just easier for some people to get rich due to environmental factors.
The point of the advice is to think about the choices we make with our money. Are we making decisions that drive us deeper into debt? Are we acting foolishly and placing our futures at risk? Are we lazy or possessed by a “little man can’t get ahead” attitude?
If you asked a group of rich people how they became rich, you won’t hear them talk about how they were wise to always get a low APR on their credit cards. You won’t hear stories about how they saved a ton of cash leasing their cars. They won’t regale you with stories of how the latest get-rich-quick scheme paid off for them because they were smarter than everyone else.
So what would you hear?
Where Does Wealth Come From?
The Spectrum Group recently released their quarterly Wealth Segmentation Series Report in which they asked investors with a net worth between $5 and $25 million how they made their money. The results are fairly revealing:
- Hard Work: 96%
- Education: 93%
- Smart Investing: 90%
- Frugality: 81%
- Taking Risks: 72%
- Being in the right place at the right time: 61%
- Luck: 57%
- Decisions made for me by financial advisors: 43%
- Running my own business: 32%
- Inheritance: 29%
- Family Connections: 9%
As you can see, though some of the respondents attributed part of their success in building wealth to serendipity, luck, or inheritance, the reasons overwhelmingly cited as crucial to real success are available to almost everyone.
If you look at the top 5 factors on how these millionaires stated they made their money you’ll discover their success mostly boils down to plain ol’ common sense and work ethic.
No More Excuses
Opportunities still abound. There are bloggers out there who’ve not only generated enough income from their writing that they pull in a full-time income, but they also make enough money to hire a team of employees.
Mom and Pop innovators like Julie and Brian Whiteman can create new products like Groovebook, get an investor like Kevin O’Leary from Sharktank to invest, and then turn around and sell it to Shutterfly for $14.5 million.
Down in Austin you’ll find a group of dumpster divers who comb the city’s discards and resell items on eBay, earning up to six figures per year in the process.
None of this is to say that just anyone who works hard and puts their mind to it will get rich, but it’s certain that the likelihood of becoming rich increases exponentially. Yes, some of us have more obstacles to overcome than others, but we shouldn’t ever let those obstacles be excuses we allow to bar our onward and upward movement.
Learn the lessons from the millionaires surveyed. Hard work tops the list followed closely by education. I would make the argument that education doesn’t mean earning a certain type of degree.
Education is learning what you want and need to know to be successful in your niche or field of interest. A great work ethic and commitment to grow causes you to rise to the top in that field.
Every time I watch Deadliest Catch—one of my favorite TV shoes—I’m reminded that here are these guys that make really good money by busting their butts, all without college degrees.
What Will You Do?
The entrepreneurial spirit runs deep in this list of factors. Successful entrepreneurs work their tails off, have learned their business well, make smart choices with their money, spend frugally, and take calculated risks regularly. Study just about any self-made millionaire’s life and you’ll find these characteristics are common.
So what will you do? Will you continue to make excuses as to why you can’t get ahead, or will you make the decision to “do what rich people do?” The choice is yours.
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