17 Surprising Mindset Differences Between the Rich and the Broke

As a general rule, it’s more profitable to leverage your strengths than it is to fix your weaknesses.

This is especially true when we are talking about skills: focus on what you do well, and let someone else do the stuff that you struggle with.

There’s one huge exception to this general rule however: bad mindsets.

A bad mindset is not just any ordinary weakness, it is a critical weakness that will hamstring your effectiveness if you don’t address it.

One example of an unhealthy mindset is the scarcity mindset. The scarcity mindset views things like wealth, success, and fame as something like a pie. There’s only so much to go around and if one person takes too big of a slice, everyone else gets less.

In this worldview, Bill Gates is inherently evil, regardless of how much good that he has done for society, regardless of how much he has helped others, both through his products and through his foundation. He’s evil because he took too big of a slice and didn’t leave enough for the rest of us.

To whatever extent you find yourself resenting rich and successful people, you have a scarcity mindset.

To whatever extent you find it difficult to be truly, genuinely happy for the success of others, you have a scarcity mindset.

The alternative to a scarcity mindset is an abundance mindset. The abundance mindset says that we can create more value for everyone. Instead of viewing wealth and success as a zero-sum game, we can create win-win situations where everyone comes out better than they were before.

If you have a scarcity mindset, you will find it hard to collaborate with others because their gains are your losses. If you have an abundance mindset you will readily collaborate with others because you recognize that you can create more value that way.

That phrase “create value” is crucial to the abundance mindset. Value, and thus wealth, doesn’t just exist, it can be created. We’re not limited to dividing up the pie we currently have. We can make the pie bigger. We can make new pies.

In fact, if you really want to get ahead, the way to do so is not by looking out only for your interests, but the interests of others.

Instead of suspiciously hoarding all you have to offer until you see an opportunity to leverage it for profit, the best strategy is to be generous. Generous with your time, generous with your knowledge, generous with your skills.

If you really think hard about how exactly the people who are making a full-time living online are doing it, the simplest answer is generosity. They pour their time and energy into creating valuable content that helps people and they build a following of true fans — people who trust them and are grateful for their contributions. When they finally release a product, they have legions of eager customers.

I once heard Darren Rowse, the blogger behind Digital Photography School and ProBlogger, describe his first product. It was an ebook called “31 Days to Build a Better Blog.” It wasn’t new material. He had already done a series on his blog called “31 Ways to Build a Better Blog” and just added a few things and repackaged it as an ebook.

Why would anyone want to buy something that was available online for free? One reason might be that they value the efficiency of having it all in one place so they don’t have to search through his archives when they want the info. One reason might be that people just like the thought of owning something.

But a surprising reason was uncovered through several people who emailed him saying that they knew they could get all the info for free, but they bought the ebook anyway because it was the first opportunity they had to thank Darren for everything he had done for them.

Think about that for a second. His product offered little in the way of new value, but customers happily bought because Darren had created such a surplus of value for them.

Counter-intuitiviley, one of the best strategies for getting ahead is to give generously.

The scarcity mindset is forced to always ask “what do I get from this transaction?” The abundance mindset is free to ask “what can I give in this transaction?”

A really interesting book that I read recently was called Secrets of the Millionaire Mind by T. Harv Eker. This book very closely ties your ability to get rich to your mindset. The idea is that your thoughts and your feelings drive your actions, and your actions determine your results.

He says that people have a “financial thermostat.” Just like a house is set for a certain temperature, each person is programmed for a certain level of wealth. Just like the temperature in a house can fluctuate even with the thermostat on (the temperature outside the house might change rapidly or maybe someone leaves a window open), a persons level of wealth can fluctuate based on external circumstances. But as long as the thermostat is set to a certain level, that is where they will default back to in the long run.

The only way to become truly wealthy in his view is to reprogram the thermostat — to change your mindset as it relates to money.

You need to ditch the ways of thinking that are holding you back and embrace the ways of thinking that can move you forward.

Here are his 17 “Wealth Files” which lay out the differences between how the rich and the poor approach money, as well as my commentary:

1) Rich people believe “I create my life.” Poor people believe “Life happens to me.”

Do you really believe you can control what direction your life goes?

Hopefully most of you will say that you do, but do your actions back it up?

If you really believe that you can control the direction of your life, you’ll take action to get where you want to go. If you don’t, you won’t. Instead, you will believe that you are just a victim of your circumstances.

It’s easier to believe that life happens to you because it lets you off the hook. It’s not your fault that you’re poor. Or overweight. Or unable to find a good spouse. Those were all the result of bad breaks that came your way. You’re just playing the hand you were dealt.

The reality is that everyone will have their fair share of bad breaks, but if you are proactively in control of your life instead of reactively responding, the bad breaks don’t break you.

The very first step in any journey of self-improvement is to admit to yourself that you can makes things better, and are responsible for doing so.

2) Rich people play the money game to win. Poor people play the money game to not lose.

If you put your money in the stock market, you might lose it. If you put it in real estate, you might lose it. If you invest it in starting a business, you might lose it.

All of that is true.

However, the stock market, real estate, and starting a business are the best ways to supercharge your accumulation of wealth. They are what let your money start working hard for you instead of you needing to work hard for your money.

If you’re playing not to lose, you’ll avoid all three. You’ll avoid the losses that you were scared of, but unfortunately you will suffer a worse loss, the loss of opportunity. Your reward won’t be safety, but regret.

And regret is brutal.

3) Rich people are committed to being rich. Poor people want to be rich.

Everyone wants to be rich. Given the choice between being poor and being rich, very few people would say that they would rather be struggling to get by.

If you want to actually become rich, you need to be committed to it. You need to be willing to take the next step forward whether you feel ready or not. You need to put in the work. You need to take the risks.

Commitment might mean getting up earlier. It might mean reading a book that will improve your mind instead of catching up on Netflix. Whatever form it takes in your life, there should be tangible signs of your commitment that you can point to. Desire can be all talk, commitment takes action.

4) Rich people think big. Poor people think small.

I have a friend who has started to dabble in the world of making money online. I regularly talk to him and try to encourage him to keep moving forward. The other day I was talking to him and he said that maybe if he stuck with it long enough, he could eventually replace his $35k salary with his online income.

Thirty-five thousand dollars?

For him that must have seemed like the highest he could possibly push the number without me getting on his case for being unrealistic.

What actually happened was that I got on his case for setting the bar so low.

There are several reasons why you need a big vision. First of all, a big vision is more motivating. If you think that you will need to agonize through years of toiling away at your project just to get to the point of making $35,000/year, you’re going to spend a lot of time wondering if it’s worth it. If, on the other hand, you shoot for, let’s just say ten times that amount, you no longer need to justify the work you are putting in. The work is going to pay off in a big way.

Another reason is that thinking big helps you think outside the box. Instead of thinking “what would I need to do to get someone to buy my $5 e-book?” you are thinking “what would I need to do to get someone to buy a $500 online course?” (or a $5,000 online course. Or a $50,000 online course).

Finally, thinking big stretches you. Instead of becoming complacent, you are always looking onward and upward.

Are you thinking big or small right now?

We’re coming up on the deadline for a goal that I set myself and I’m going to be way short. In one sense I’m upset, but in a deeper sense I’m super grateful that I set such a lofty goal. I’m way closer to achieving what I want than I would be if I didn’t set the bar high.

Dream big. Even if you fall short, you’ll end up way beyond where you would have been otherwise.

5) Rich people focus on opportunities. Poor people focus on obstacles.

Have you ever heard someone claim that they had the idea for Uber before Uber? Then why didn’t they do anything about it? If I had to pick one explanation, this might be it: they were stuck in a mindset that recognized obstacles, not opportunities.

There are plenty of obstacles with Uber:

  • Why would someone just trust an unlicensed stranger to pick them up? (I even know people who won’t use Uber due to safety concerns)
  • How do you expect to compete with the well-established taxi business?
  • What about the fact that so many consumers are older and struggle with apps and technology?

Plus there are all the obstacles inherent in running a business: where are you going to get funding, what is your business model going to look like, etc.

If all you can see are obstacles, you’ll never seize on an opportunity even if it is staring you right in the face.

You need to be able to look for opportunities and have the courage to tackle them despite their obstacles.

6) Rich people admire other rich and successful people. Poor people resent rich and successful people.

This quote is a good illustration of one of the deepest worldview divides between the rich and poor: the abundance mindset vs. the scarcity mindset.

The abundance mindset recognizes that if you want to be successful, you will have to help a lot of other people. As the great Zig Ziglar was famous for saying:

“You can have everything in life you want, if you will just help other people get what they want.”

So if you become a self-made millionaire, it means that your actions have benefited a great many people and that everyone has won. You think of wealth and success like a candle: if I share some of what I have with you there’s more for everyone.

On the other hand, if you have a scarcity mindset, you see wealth and success like a pie. If someone takes a bigger slice than everyone else, there’s less left to go around. If you have a scarcity mentality then you greatly resents people like Oprah, Mark Zuckerberg and Bill Gates because they were greedy and took too big of a slice.

If you have an abundance mentality, you admire those people and seek to emulate them. You also acknowledge the value they have brought to the world through both their actual work as well as their charitable donations.

Even as I’ve begun to develop an abundance mindset, I can occasionally find myself resenting rich people due to envy. This is something that I am fighting by practicing gratitude and reminding myself that it’s not fair to compare where someone( who has been at this game for decades) is to where I am on my journey (plus comparisons are normally bad news anyway, unless you are comparing yourself to your former self).

7) Rich people associate with positive, successful people. Poor people associate with negative or unsuccessful people.

Here’s where things get real. It has often been said that “your network is your net worth.” It has also been observed that “you are the average of the five people you spend the most time with.”

So who are you spending your time with?

Are they making you better, or dragging you down?

Do they invigorate you with their positive vibes, or suffocate you with their negativity?

The brutal truth is that if you want to be successful there is no room for negative vibes.

That friend that’s always complaining: they need to either stop or find someone else to complain to.

There’s enough negativity in the world. If you want to be successful, you should take a page from entrepreneur extraordinaire Gary Vaynerchuk’s book: “positive vibes only.”

8) Rich people are willing to promote themselves and their value. Poor people think negatively about selling and promotion.

If you want anyone to ever hear about you, you need to promote yourself and what you have to offer. It will be awkward and uncomfortable, but it’s the best (only) way to move forward.

There’s really nowhere that you can escape the need to promote yourself. Even if you don’t try to start your own business and go instead for climbing the corporate ladder, you’ll need to promote yourself to get hired, you’ll need to promote yourself to get a promotion, etc.

I’m definitely not saying that you should become arrogant or cocky, but if you have something good to offer, for your own sake let people know about it.

A fear of selling and promotion can do nothing but hold you back.

9) Rich people are bigger than their problems. Poor people are smaller than their problems.

Have you ever heard someone who isn’t successful trying to justify why they aren’t successful? They will have a string of excuses as long as their arm, and all of them shift the blame to someone or something else. It’s the government’s fault. It was their old boss’s fault. The industry is in decline. The market is bad. Their co-workers don’t do their job, etc. etc. etc.

The way they talk about their problems make you think that they will never succeed, their problems are bigger than they are.

Successful people realize that their problems are obstacles that are going to need to be overcome for them to continue succeeding. In their mind, they are bigger than their problems.

You can choose which one of these mindsets you will adopt.

10) Rich people are excellent receivers. Poor people are poor receivers.

You need help.

Yes, I believe that you are capable of achieving your dreams, but you need help. If your pride doesn’t let you receive help, it’s holding you back and needs to be put in check.

A hidden benefit of receiving is the effect of the strengthening of a relationship. If you struggle with receiving, your perception is likely the opposite of reality: you probably think that accepting something from someone “puts you in their debt” but really it just makes you closer with them. If you deny the help of others, you pass up a free opportunity to build a relationship.

One thing that I need to mention is that when I said you need to keep your pride in check, I didn’t mean you should start practicing false humility.

False humility is just as bad as pride and blocks you from another important form of receiving, the receiving of compliments and recognition.

When someone compliments you you shouldn’t hang your head low and mutter about how it really wasn’t that big of a deal and you don’t want to take too much credit. That’s not humility, that’s posturing. It’s worthless to you and it’s actually insulting to them since you are implying that their praise was somehow misdirected.

When you are complimented you should look the other person in the eyes and very sincerely tell them, “thank you, I’m honored that you would give me that complement.” This might be harder than the head down approach, but it takes real humility to accept a compliment, and humility is hard.

11) Rich people choose to get paid based on results. Poor people choose to get paid based on time.

I say this all the time (pun intended): time is your most precious resource. If you invest your time into creating something that you can sell instead of time, you can make money while freeing up time. If you trade time for money you just get money and lose time.

Trading time for money doesn’t scale well since every person only has the same 16 or so waking hours in a day and presumably you want to use as many of those as possible to spend with the people you care about.

The thing is, the alternative to being paid for your time is to be paid based on results and that is a scary thought for a lot of people. That means you might fail. You might not succeed in making the kind of money you need to make (and to add insult to injury, that would mean your work wasn’t good enough, a demoralizing thought).

Of course “it might not work” implies “it might work” and if it does work the results will be beyond anything you could imagine if you stayed stuck trading time for money.

12) Rich people think “both”. Poor people think “either/or”

This goes back to the abundance mindset vs. the scarcity mindset. Do you honestly think we can both win or do I have to lose so that you can win? Can we both get what we want or is it going to be one or the other? Can we collaborate to build each other up or are we destined to fight to tear each other down?

This can apply not just to areas of competition or cooperation, but to the way you manage your time and resources as well.

Should you focus on the present or the future? Both.

Should you focus on quantity or quality? Both.

It may seem like an either/or and it may be hard to find a way to do both, but there are people who are doing it.

Sometimes you might really have to choose either/or, but your first thought should always be to ask how you can choose both.

I would add the caveat that doesn’t mean that you will never have to make a trade-off. You definitely will. This means that if you start looking for opportunities for “both” you’ll start finding them.

13) Rich people focus on their net worth. Poor people focus on their working income.

Don’t get me wrong, I want a high income, but the problem with only focusing on a high income is that your own effort becomes the only method of making money. When you take a step back and look at your net worth, you can let your money start doing some of the work. You can use your money to make money.

A high income isn’t so great if your expenses are higher. Ideally you would live below your means and invest part of your income into building your net worth, using your money to make money.

14) Rich people manage their money well. Poor people mismanage their money well.

One of the biggest illustrations of this is consumer debt in the United States. I remember reading an article from USA Today that said according to a recent study, the people with the lowest net worth have the highest credit card debt as a group.

There are times when debt is okay. My rule of thumb is you should “only borrow to build,” meaning you should expect to get a return that outweighs the cost of borrowing. The majority of credit debt is not like this. What happens is that you delay the need to pay, and you pay a premium for the ability to do that (i.e. interest). This means that when you go to work you are working to earn money that you’ve already spent. That’s about as bad a job as you can do of managing your money.

There are other, more subtle, ways where this dichotomy can be seen. I truly believe that rich people are orders of magnitude more likely to invest in themselves than poor people are. They spend money on books and courses to give them the knowledge and skills needed to succeed. They invest money into starting a business. The invest money into growing their business. Those who truly manage their money well understand that one of the wisest uses of money is to use it to improve yourself.

Get out of debt.

Invest in yourself.


15) Rich people have their money work hard for them. Poor people work hard for their money.

Rich people put their money into money-making vehicles. Stocks, real estate, their own business. Their money earns more money. Poor people get into debt and have to work longer hours to pay for money they already spent.

A lot of this comes down to the fact that the things that make the most money in the long run often earn little return in the short run.

We all know that if you invest early you can make a lot of money, but when you actually put away what little you have to spare, you see that you earn hardly anything in the stock market. That’s because that’s how it works. You see almost no results in the beginning… but then it starts to snowball. It’s the same thing with investing in real estate or starting a business. Lots of unpaid hours and uncertainty as to whether it will all be worth it. Then things start to snowball. Those who have faith in the system will be confident enough to let their money work hard for them.

Trust the process.

16) Rich people act in spite of fear. Poor people let fear stop them.

Man oh man, this is a big one.

Listen, if the things you wanted in life could be found in your comfort zone, you would have found them already.

Things like wealth and success require you to take the scary act of stepping out of your comfort zone and executing on the things that will make you successful.

My big recommendation here is to make your dream bigger than your fear. Write it down. Repeat it to yourself. Visualize it as often as you can. Make it something you can’t imagine living without. Facing your fear is painful, but if the pain of staying the same becomes greater than the pain of changing, you have a chance.

17) Rich people constantly learn and grow. Poor people think they already know.

Every one of us has some vision of future success that we hope to achieve.

Here’s the thing, the version of you that exists in your vision doesn’t just have stuff that you want, they know things that you don’t. If you want the stuff, you need to first seek out the knowledge that will get you there.

I still think the best way to do this is through the reading of good books. I’ve heard that a reporter once asked Malcolm X what alma mater was and he simply replied “books.”

I heard Dale Partridge say on the StartupCamp podcast say that if you aren’t reading at least six books a year, you’re not investing enough in your continuing education.

  • In 2018 I read 57 books
  • In 2019 I read 32 books
  • In 2020 I read 79 books
  • This year I’ve “only” read 16

You don’t have to read 50 books a year, but you should be reading something.

If you need a place to start, check out my book reviews.

Final Thoughts

Usually, when someone starts talking about the importance of mindset, the rebuttal is “it can’t be as easy as changing your mind.”

The reality is that there is nothing easy about changing your mind. Look at the list above, many of the characteristics of “poor” people likely represent beliefs and habits that you have that you’ve never even been aware of. Many of them represent deep-seated insecurities that are hard to undo.

Think about the first item on the list: the belief of the rich that they create their life and the belief of the poor that life happens to them. It’s easy to believe that life happens to you because it lets you off the hook. It’s not your fault that you are where you are. It’s your parents and teachers and bosses and all the people who didn’t hire you because they didn’t see your potential. Taking responsibility for your circumstances is way more painful and difficult than it sounds.

In the short term, bad mindsets usually feel much better than good ones. That’s why we default to them.

I’ve had this list of 17 “wealth files” written in a pocket notebook for some time and I revisit it often. I’m making progress toward improving my mindset, but there is still lots of work to be done.

For example, in general I now admire other rich and successful people, but every now and then when I become frustrated with my lack of progress, I catch myself resenting certain people out of jealousy. The ones I occasionally resent are those that had the courage to get started earlier than me. I think to myself: it’s so unfair that they are so far past me, I should have just started earlier. That thought doesn’t do any good however, and I need to fight to get rid of it.

What areas in the above list do you tend to fall in line with “poor” people?

Focus on switching your mindset and then you can work on switching your actions. The results follow from there.

Having a healthy mindset isn’t just critical to the accumulation of wealth, it’s critical to success in virtually every endeavor.

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