Want to think like the rich? Get over that Protestant mindset that money is the root of all evil.
Rich people do not just live differently than the rest of the population, they think very differently too.
Mitt Romney’s political opponents are having a field day with his recent 47-per-cent debacle, in which the millionaire presidential hopeful was covertly taped telling a well-heeled fund-raising party he would never convince half the American population “they should take personal responsibility and care for their lives.”
Australian billionaire mining magnate Gina Rinehart also recently came under fire for suggesting those without money are “jealous,” and should “spend less time drinking, or smoking and socializing and more time working.”
Arrogant? Out of touch? Pompous? Maybe. Regardless of how you characterize their views, these incidents underscore the disparity.
Few know this better than Steve Siebold, author of How Rich People Think. The Boynton Beach, Fla.-based public speaker has spent nearly three decades interviewing and rubbing shoulders with self-made millionaires and billionaires, and has found that what separates the wealthy and the non-wealthy is how they view themselves, their money and the world around them.
The middle class focuses on saving money, he says; the rich focuses on how to earn it. The middle class worries about money; the rich dreams about it. The middle class has a “lottery mentality,” believing their lives are influenced by luck or other external forces; the rich has an “action mentality,” where they determine their own futures.
“[Rich] people aren’t any smarter than us or better,” Siebold says. “They just think about money and success and wealth differently than the average person.”
As a self-described multimillionaire, Siebold credits his own wealth to the lessons he learned, which helped him change his middle-class mindset. The biggest lesson, he says, was to quit thinking of wealth acquisition as an evil pursuit.
People who are not rich tend to think of money as a bad thing, he says, noting that as long as you have such negative thoughts about money, you will never have it. “There’s no question about it. Very few people become rich without the belief that it’s a good thing and they should be going after it.”
Once he began to alter his views, Siebold immersed himself among the rich, even going so far as to buy the cheapest house on a block where three billionaires lived. Through socializing and attending neighbourhood parties, he says, “I would walk away from those encounters thinking, ‘No wonder I’m broke.They’re looking at possibility and opportunity and I’m worried about paying my bills.’” (Clearly, however, he was sufficiently flush to live in the neighbourhood in the first place.)
Becoming rich (a process he describes as identifying a problem and finding wealthy customers who would pay him to solve it) has further changed the way he thinks. Money has freed him to think about bigger-picture problems, he says, “as opposed to where am I going to get the money to fix the flat tire on my car?”
As Romney himself admitted, his comments were not “elegantly stated.” Nor were Rinehart’s. But research suggests there may be some truth to their generalizations about those less fortunate.
Among the lower classes, “there’s a sense that no matter how hard I work and how much talent I have, the context is so powerful, the politics involved, the inequalities that arise, other peoples’ inheritance and the advantages that they have are going to be the determining factors and not my individual abilities,” says Michael Kraus, assistant professor of psychology at the University of Illinois, Urbana-Champaign.
Psychologists have found that people who are not wealthy are indeed more prone to think that outside forces determine their outcomes, whether those forces are other individuals or the government. They also tend to be more attuned to others’ thoughts and actions and are acutely aware of outside threats and limitations.
For rich people, their wealth offers them greater freedom to pursue their own interests. They are more inclined to assume they are in control of their outcomes, and their individualistic orientation means they tend not to be as empathetic. In individuals like Romney, this mindset can come across as being “blissfully unaware,” Kraus says.
“When Mitt is going through his everyday life, he’ll have a tendency to focus on internal disposition, so he’ll be focusing on how he got where he is, which is hard work and effort and some of his talents. So he will naively assume that other people got there in the same way.”
Studies have shown that low-income and high-income individuals even have different physiological responses to various situations. A 2001 study of American children and teens found that those from poorer families showed increased heart rate and blood pressure in response to ambiguous scenarios that were neither positive nor negative, providing support to the notion that lower-income individuals have heightened perceptions of threat.
A 2011 study, co-authored by Kraus, also found physiological evidence to suggest less privileged individuals are more compassionate. When shown videos of children suffering from cancer, participating university students from lower-income families showed a deceleration in heart rate, while the heart rates of their well-to-do counterparts did not change. Kraus explains that heart-rate deceleration is believed to be an “orienting response,” an indicator of compassion that arises when people feel closer to one another.
All this is not to say that the wealthy are selfish and the non-wealthy are waiting around for the government to take care of them. Rather, the gaps in their thinking may help explain why they have trouble seeing eye to eye.
“It’s not that people who are wealthier have a lower capacity to be generous, to be kind to other people,” Kraus says. “It’s that they sort of go around their lives not thinking about that stuff.”
A WEALTHY FRAME OF MIND
Who: Mitt Romney, U.S. Republican presidential candidate
Net worth: Estimated $250-million
What he said: “There are 47 per cent of the people who will vote for the President [Barack Obama] no matter what…. There are 47 per cent who are with him, who are dependent upon government, who believe that they are victims, who believe that government has a responsibility to care for them, who believe that they are entitled to health care, to food, to housing, to you name it. That that’s an entitlement.”
Who: Georgina (Gina) Rinehart, chairwoman and director of Australia’s Hancock Prospecting Pty Ltd.
Net worth: At least $18-billion
What she said (in an opinion piece in Australian Resources & Investment magazine): “There is no monopoly on becoming a millionaire. If you’re jealous of those with more money, don’t just sit there and complain; do something to make more money yourself – spend less time drinking, or smoking and socializing and more time working.”
Who: Warren Buffett, chairman of Berkshire Hathaway and philanthropist
Net worth: $46-billion
What he said: “Success in investing doesn’t correlate with IQ. What you need is the temperament to control the urges that get other people into trouble in investing.”
Who: Kevin O’Leary, venture capitalist on CBC’s Dragons’ Den and financial analyst on The Lang and O’Leary exchange
Net worth: Not available
What he said (to Forbes): “The only friend you are going to have when you are old and crusty is not your dog, not your kids but cash in the bank that is still going to love you.”
Who: Indra Nooyi, chairwoman and chief executive of PepsiCo
Income: Total compensation in 2011 was $19.6-million
What she said: “I had no safety net. If I failed, I failed. That kept me going.”
Sources: Mother Jones, Forbes, Australian Resource & Investment magazine, Daily News and Analysis