The difference between the Rich and Average mindset is due to their Financial Education. The main problem is that Financial Education is not taught in schools. As said by Robert Kiyosaki, the average people don’t get rich because they lack financial education. They get trapped into the Rat Race. No matter how much they earn, they always find ways to spend it all instead of investing in accumulating assets.
Here are 13 difference between Rich and Average Mindset
1. Fixed Mentality Vs Growth Mentality
Average people have a Fixed Mentality whereas the Rich have a Growth Mentality. The rich explore new ways to boost their earnings while the average is pretty much convinced that only winning a lottery ticket can make them rich.
2. Degrees Vs Knowledge
Average people believe that the more Degrees and Doctorates they have, the more intelligent they are and the wealthier they will be. Whereas the Rich are well aware of the fact that Knowledge is more important than Degrees and doctorates. While the average people focus more and more on gaining multiple degrees and doctorates, the rich focus on gaining the right Knowledge. Ultimately the average end up working for the rich who is mostly less qualified than them in terms of Degrees.10 Ways To Change Your Mindset Instantly
3. Saving Vs Earning
Average people are always concentrating towards saving money. They save for buying Car, for buying luxury items, for their children’s education, for a trip etc. Whereas the Rich concentrate towards multiplying their earnings in order fulfill all their desires. An average mind spends more time on finding ways to save 500 bucks while a rich mind spends the same time finding ways to earn 500000 bucks.
4. Surviving Vs Living
Average people teach their kids to survive, they program their mind to play it safe, get a good education (Degrees or Doctorates) and never to take any risk. They plant a roadmap in their mind with Milestones such as a Master Degree, Job, Marriage, Kids, Car, House, and Savings for Retirement. Whereas the rich teach their children to live a full-fledged life, they teach them to create and handle business, create business strategies, build business contacts, Decision making etc. In short, they financially educate their children.
5. Finding Job Vs Creating Job
Average people are always obsessed with finding a good 9 to 5 Job in order to earn money. While few work for the same company until they retire, others switch companies in order to get increment. They feel a person’s life is secure if he/she works for an MNC. Whereas the Rich are obsessed with creating new businesses in order to earn money. In short, the average people depend on the Rich for jobs and the Rich depend on the Average for getting their work done. This way the Rich grow Richer while the Average stays Average.
6. Dependent Vs Independent
Average people are always dependent upon one or the other for various reasons. They are dependent upon the Rich or the Government for a job, dependent on their Boss for Promotion, Increment or even Leave, dependent on the Banks for Educational, Personal, House, Vehicle Loan etc. Whereas the Rich are Independent of all the above, they have earned the liberty to be free.
7. Active Income Vs Passive Income
Active income is the income which requires material participation is required such as a job, freelancing etc. Passive income is income resulting from cash flow received on a regular basis, requiring minimal to no effort by the recipient to maintain it.
The primary source of income for the average people is their Active income, which will stop if the person stops working. Whereas the Rich always prefer passive revenue streams, they don’t depend on active revenue streams because they know that active income is not always reliable.
8. Playing Safe Vs Taking Risks
The average people are too scared to take risks. They never risk their money by investing in ideas. Whereas the Rich know that they cannot excel if they won’t take risks, they always look for opportunities to invest their money even after knowing the fact that they might lose it all.
9. Pass Time Vs Save time
Average people are more interested in passing time. They either wait for the evening so that they can go home or wait for the weekend. They waste a majority of their free time watching TV or YouTube, Sleeping, Playing etc. Whereas the Rich realize the importance of time, they know that it is the most valuable Resource. The Rich always focus on saving their time by hiring average people for getting their work done. The Average people waste most of the time while the Rich use it wisely.
10. Liability Vs Assets
A majority of people confuse Liability for Asset. Please read my article on Is It Really An Asset Or Liability for better understanding the difference between them, it will definitely change your view towards the things which you are planning to buy and most definitely reduce your future expenses and boost your income.
Average people are attracted more towards liabilities. Their expenses are directly proportional to their earnings, they raise their expenses as soon as they get a salary hike. They are more prone towards buying liabilities such as Car, Costly Gadgets, luxury items etc even if they don’t have enough money to pay for it. They will buy it on EMI. Whereas the Rich know the difference between Assets and Liabilities, they buy assets more than Liabilities.
11. Climbing Corporate Ladder Vs Owning Corporate Ladder
Average people are always obsessed with Climbing the Corporate Ladder, they work hard, Put in some extra hours to impress their boss just for the hope of getting promoted. Whereas the Rich are obsessed with owning more and more Businesses.
12. Taking Orders Vs Giving Orders
Average people are good in taking orders, they depend on their Boss for making the important decisions. Whereas the rich have a problem in taking orders from others, they don’t depend on others for decisions. They make their own decisions.
13. Single source of income Vs Multiple sources of income
Average people do not concentrate on multiple sources of income. They mostly rely on their single income source for everything. As their needs increases, they concentrate on ways to get a Hike instead of creating few more passive income sources. This is the main reason they get devastated during company lays offs. The Rich never depend on just one revenue source, they invest into multiple businesses which create multiple revenue sources.