I don’t necessarily like poking fun or making light of the plight of the poor.  They have enough issues already.  Poverty, as I’ve explained before is due in part to circumstances, oppression and in rare cases, lack of effort.  Within the United States however, we make it much easier to rise up the ladder of status having a stable economy, government, and easy access to resources.

In all my years, especially after I really started to accumulate wealth, I started noticing the difference between actions my wealthy peers did and things the poor did.  Some, I think, are fairly easy to fix while others require drastic changes in behavior.  Whether you agree or not doesn’t matter, these are my personal observations and exceptions are everywhere.

1.  Use credit cards for luxuries and necessities.

Consumer debt is extremely prevalent among America’s poor and is only getting worse.  In fact, from what I’ve learned helping people climb out of debt, most people probably won’t see a positive net worth until the hit their 50’s!  Credit card companies understand that giving credit cards to America’s youth before they can gain financial literacy locks them in (sometimes for life).  In addition, purchasing items on a credit card with the “hope” that it’ll get paid off eventually will only exacerbate the problem.  The wealthy pay cash for just about everything.  If they don’t have the cash, they don’t buy it (its that simple).

2.  Pay interest

This goes along with item 1, but the old adage rings true, “Poor people pay interest while rich people collect interest.”  I know some wealthy people so terrified of paying interest (out of principle of course) that they haven’t anything in decades!  On the other hand, the poor finance everything.  They think, “Oh shoot I can afford the monthly payment” when in reality they’re getting swindled into paying sometimes twice the purchasing price.  I’ve seen adds for monthly payment plans for Rolex watches, TVs, mattresses, Disneyland passes, and even clothing.  Remember, if you can’t pay cash you CAN’T afford it.

3.  Play the lottery

We’ve all heard the vast majority of lottery winners go bankrupt within several years after setting themselves up for life.  In fact, statistically you’re better off not winning the lottery at all.  I used to wonder why people, after coming into sometimes millions of dollars, didn’t have the sense to put some away or invest for their future.  I learned later the only the poor purchase lottery tickets.  It’s a scam really, one I wish I thought of first, and because these lottery winners are financially illiterate they blow their fortunes leaving them right where they were.  Also, I’m so sick of hearing “Well you can’t win if you don’t play!” Your not going to win, don’t throw your money away.

4.  Watch TV

Television (you could substitute social media/video games in as well) is the largest time robbing activity on earth.  The act of sitting for hours at a time, consuming show after show is wildly unproductive.  One thing the rich understand very well is how to be productive.  “Time is money” is something the wealthy take very seriously.  Now I’m not saying DON’T watch TV, sometimes it’s entertaining especially if there’s a movie or show the family can watch together.

5.  Swear

This one usually gets me into trouble but if you disagree, I challenge you to test it out.  I had a mentor who was the definition of classy, he was tall dark & handsome and was one of the most well respected builders in Southern California.  I accompanied him to a meeting with several Hollywood executives who were interested in him building a new studio for their production company.  At one point in the meeting, one of the Hollywood executives told an off colored joke and used some vulgar language.  Without hesitation my mentor folded his hands, looked the man straight in the eye, and calmly said “You will NEVER use that language in here again.”  The room went silent and the Hollywood executive was obviously embarrassed and offered a sheepish apology.  Ever since then I’ve noticed the distinct difference between language of those in poverty, and that of the wealthy (with some obvious exceptions).  Could it be education?  Maybe.  Or possibly too old fashioned.  However, the rich understand the importance of image, first impressions, and how they’re perceived.  Bad language gives off the impression your vocabulary isn’t sophisticated enough to property communicate your thoughts.

6.  Don’t continually self-improve.

When I ask low income individuals who ask for help what they do with their free time it typically consists entirely of entertainment.  “I go see a movie” or “I sit down and watch the game” or my personal favorite “Go drinking with friends.”  I ask them to make a personal observation on what activities they do that improves themselves.  Many can’t seem to think of anything so I offer the challenge of finding an activity that teaches a skill, marketable or not.  The wealthy see the value of self-improvement.  It enhances their skills and can provide a higher return on investment.

7.  Have savings

Did you know that if you have at least $1001 in savings you have more money than 62% of Americans?  Amazing right?  The poor spend money as soon as they receive it (and then subsidize with credit cards).  Just saving a few dollars a month is an action that most Americans can’t seem to do.  The rich not only have savings, but have the right amount of savings.  I recommend having at least 3 months of expenses saved for emergencies (6 months if your able).  If you spend 4k a month that means you should have at least 12k saved.

8.  Eat junk food

My family hosted a foreign exchange student from Asia several years ago and after a few months he told me, “In America, the poor look like Asia’s rich.  In Asia, the poor look like Amercia’s rich.”  He was fascinated with the idea that American’s strive to be trim while many of our poor suffer from obesity and other health related issues.  I explained that cheap food in America is full of sugar and fat (something he also couldn’t understand).  In Asia, the poor lived off rice, home grown vegetables, and the occasional meat protein.  Being fit, especially now, is a status symbol now.  America’s wealthy now can differentiate themselves based off their waistlines and wallets.

9.  Shop on Black Friday

It seems like the last decade or so, Black Friday has become increasingly ridiculous.  People have been trampled to death, there have been fights over items and its become quite the joke.  I’ve seen people spend days leading up to Thanksgiving camping outside retail stores to save what? a couple hundred dollars at the most?  If you’re one of those people that participates in the Black Friday mayham, please for the love of God, stop it.  Have some dignity, buy the same items on sale the next couple of weeks or even better, online.  Not surprising the people who decide to spend days camping in tents are the the nations wealthy, and that behavior is not only sad but crazy.

10.  Lose Hope

Lastly, building wealth is playing the long game.  For the vast majority of us, we’ll have to increase our net worth little by little, slowly but surely.  Most of the poor I speak with grow frustrated with the slow progress of building wealth and without any self-discipline, they lose hope.  The wealthy on the other hand, enjoy the chase, and find personal satisfaction with the slow but exciting process of making money.  In the age of instant information and quick fortunes, it’s more important than ever to see things in the long term, and make adjustments that effect us not tomorrow but years to come.