How to think like a rich person | Your Habits will make you financially successful

so what are the habits of the rich so today guys i'm going to revisit a topic that i did last year which is where do the rich store their wealth in this video i'm going to talk about the rich the middle class and the poor and how they're fundamentally different and how you can shift your mindset because honestly and trust me as i say this your habits will make you rich and a lot of times people are set on their mindset their biases the way they think what they learned from the parents what they were told and so what's happening is a lot of people are playing a very small game based on their own internal belief system so as always guys if you like this please hit the like button please hit the subscribe button and of course the notification button because now we're starting to do lives where you send your questions in and i answer them live so now i'm going to talk to you about the three different decisions that people make whether you're poor you're middle class or you're rich and their spending patterns this typically breaks down to just very simple things like where are you spending your money and why so what i did here if you guys haven't realized this is the income statement income minus expenses and of course this is a balance sheet assets and liabilities and so as the rich middle class and poor decide what they're going to do you need to be taking a look at these different things and how money flows in and out of each so the first thing we're going to do is we're going to take a look at how the poor spend most if not all of their income on their expenses and they typically don't own any assets so poor people spend most if not all of their income unfortunately on expenses they typically don't own any assets at all and so what they do is they take their salary that they make and hopefully they're working and they spend it all on the expenses here and then the only money that they have left is anything over and above things like rent or credit cards and oftentimes they rack up their credit card debt and that credit card debt here becomes a real liability and they're in this never-ending loop but more importantly they have no assets and so there's a lot of people in this category and what we're trying to do is educate people to come over to the asset side which we'll talk about next okay so the next category is the middle class right here so the middle class also spends the majority of their money on expenses including taxes and they generally need to seek out a loan for their car and their home and they need to work to pay those kinds of debts back their investments they're typically handled via a money manager who invests in stocks and bonds and most of the time they have something like a 401k or retirement plan through their job so now let's take a look at the spending habits for most of the middle class so generally most of their income is in salary typically a higher paid salary but what they do is they take the salary and they first spend it on liabilities which end up being an expense and then they go out this way so what they're doing essentially is they're taking their income and they're loading it up on things like school debt credit cards or loans for cars they're loading up their liabilities and the only way for them to move forward is to have salary increases or bonuses or things like that or potentially even side hustles but what they do generally is they get nicer cars bigger houses and they just keep loading up the living the jones type lifestyle this is the typical pattern of the middle class they're usually loaded up in some kind of mortgage some student loans they generally put most of their money which they call assets in the stock market so another big factor is generally the middle class and the poor put their money into assets that are depreciating and the rich put their money into assets that are appreciating it's a very big distinction so now let's take a look at the spending habits of the rich the first thing that i want to point out is the rich have income from multiple sources as you know even i have income from over 10 sources so these things can come in in the source of rental income so as you know the rich generally are generating passive income in rental income royalties interest payments on loans and things like that and the poor they're generally trading their time for money that's the biggest difference so now let's take a look at the cash flow patterns of the rich so the rich generally spend their money that they get from passive income and they roll it back into assets in the form of real estate stocks intellectual property bonds businesses notes that generate interest back and so what you're looking at is you're looking at this money going into the assets and back out into the income now of course they still have a mortgage like a house and of course they have loans and credit card debt and all those kinds of things but what they're doing is they're making sure that their income in the form of rental income royalties and expense from interest payments and those kinds of things are significantly higher than any kind of expenses that they would have their excess income is going back into assets and then it's turning back into income this is the primary difference between the rich and the poor and the middle class so regardless of which category you fall into i would urge you all to make educating yourself a priority i don't necessarily mean classes although that can be part of it i mean educating yourself about money wealth real estate or any other topic that will advance your personal goals the more you educate yourself the lower your risk will be with investing one of my very favorite quotes is from jim rohn who as many of you know was an author and entrepreneur and one of tony robbins early mentors jim said formal education will make you a living but self-education will make you a fortune i love this quote because it really crystallizes for me so much when you take the reins of your own financial education it will transform your life thinking of your earning and your investments as part of your education can also allow you to find value in your financial or business setbacks whenever i've earned the most i was learning the least mind you i'm not going to face plant for the purpose of learning but i'm making a point of this so you get out of the mindset that it's the worst thing in the world if something doesn't work out the way you want it is actually part of the wealth mindset in our culture we don't really spotlight the failures of wealth and success but it's impossible to have big success without some missteps along the way so now back to my original question where do the rich store their wealth well to answer this we're going to send you back a link below at the three levels investing on a video that i did before which talks about primary secondary and tertiary so go take a look at that video to help you on your journey even more again thank you for watching

Channel: Ken McElroy

Views: 27,253

Keywords: Rich Dad, Entrepreneurship, Investing, Personal Development, Get Wealthy, Earn Wealth, Ken McElroy, Entrepreneur, Rich Dad Advisor, Success, Business, Self-Help, Coaching, Real Estate, Real Estate Entrepreneur, Real Estate Investing, Freedom, Lifestyle Business, Hustle, smart habits for success, smart habits can give smart life, passive income, passive income 2021, better money habits, better money management, improve financial situation, improve financial management

Id: U1REpEGP5iA

Length: 7min 20sec (440 seconds)

Published: Fri Jul 16 2021