During the last week, two of my favourite bloggers, and blogging buddies, published articles about the characteristics of millionaires. Dom at Your Finances Simplified published 10 common characteristics of millionaires you can follow and Roshawn at Watson Inc asked why do the rich get richer? Both very interesting and well researched articles pointing to traits like focus, thinking big, learning, investing and leadership and to framework conditions (or outcomes) like no debt, knowledge of the tax system, ability to network and building assets.
These two posts made me think about the difference between attributes, conditions and reasons. Please, stay with me now because this is rather difficult to explain but, in my opinion, well worth it.
Most of the things on Dom’s list of ten are personal attributes or preferences; being a millionaire may be associated with displaying some of these but it is more a matter of correlation than causality. In other words, it is certainly not true that all millionaires love to teach or that they are generous. In fact, I know very few rich people but some of them are not very pleasant and by far not generous; quite the reverse in fact. Conversely, it is not true that all people who love to teach and/or are generous are millionaire. Put simply, whilst there is weak correlation there is no statistical reason to suppose causality. This becomes even more interesting when we think about the combination(s) of these attributed.
Roshawn chose a somewhat different approach discussing some of the structural conditions for being rich – anyway he moves beyond personal attributes. Even the question he asks gives the impression of causality: if not having debt is why the rich get richer then this is the reason, or the cause, for them getting richer. Except that it isn’t. Because, we can claim that A causes B under three conditions:
- A precedes B; in other words lack of debt comes before being rich;
- There is a functional relationship between A and B; and
- There is no third factor C that causes both A and B.
I believe that the third condition is where all ‘factors’ Roshawn lists fail the causality test. Because there is a factor C that ‘causes’ both the lack of debt and being rich and this is our mentality, or the way in which we think.
I was reminded about Secrets of the Millionaire Mind; a book by T. Harv Eker which discusses exactly the mentality side of being wealthy.
The main message of the book is that if you wish to be rich you have to start thinking as rich people think – because thinking is what underpins your actions, standing and approach; it also affects your motivation, persistence and ability to experiment, cope and learn from failure. What’s new you may think? Who doesn’t know that – thinking is important and if we want to change the way we behave we ought to change the way we think.
According to T. Harv Eker this is true but it is not that easy; because we all have a ‘money blueprint’, this is complex and difficult to change without getting to know it and understanding its origins. Put simply, each of us has a blueprint that either makes us rich or poor:
Money is a result, wealth is a result, health is a result, illness is a result,
your weight is a result. We live in a world of cause and effect.
T. Harv Eker’s chain of causality is as follows:
Thoughts lead to feelings.
Feelings lead to actions.
Actions lead to results.
In other words, to change the results we have to change the root cause, or our thinking. It is hard but can be fun; if you want to know how and do it – get this book, read it carefully and do what it says. You won’t regret it!
Here is a selection of the wealth files, or differences in the way rich people and poor people think, that T. Harv Eker identified.
Rich people believe “I create my life.” Poor people believe “Life happens to me.”
Rich people are committed to being rich; poor people want to be rich.
Rich people focus on opportunities; poor people focus on obstacles.
Rich people admire other rich people; poor people resent rich and successful people.
Rich people are bigger than their problems; poor people are smaller than their problems.
Rich people think ‘both’; poor people think ‘either/or’.
Rich people act in spite of fear; poor people let fear stop them
Now, it is time for the verdict; would I recommend this book. Yes, if you wish to have a go at changing your mindset – your blueprint – this book can help. You still need to do the work, though! You still need to correct yourself every time you say that ‘you didn’t get a break’ – you create opportunities, remember?
I’ll leave you with two of my favourite quotes.
The size of the problem is never the issue – what matters is the size of you!
Money will only make you more of what you are!
Are you bigger than your problems? Do you have a millionaire mind?
PS: You may try to find the link between the picture and the post but I don’t think there is any; I took this picture in Washington and kind of like it!