Well there are so many difference between Rich and Middle class. Difference in mentality, thinking, behaviour and Spending habits.
This article is all about this "Difference between Rich & Middle Class"
01)Middle class says that "MY House is an Asset" while Rich people say that "My House is a Liability".SO many personal finance gurus don't agree with this point.In fact so many people around India right now thinking that their house is their Biggest Asset so what they do is they earn whole of their life and at the retirement they build a huge house for them thinking that house is their Biggest Asset because the value of real estate below that house will go up and thus their Net Worth...
But the fact is that, An asset is something which puts money into your pocket. If you buy a House, at the end of month it will not put money into your pocket but instead it will take money away from your pocket.
Of course Rental properties are your Assets but your own home in which you are living is not your Asset.....So house is not an Asset?
Well....see. An asset or Investment is something for which you should not have any emotional attachment. If you have an emotional attachment with that Asset or investment than probably you won't sell that investment for whole of your life. And suppose you sell your home today than in future you may not buy back that home again. But for Stocks,Bonds, Gold and Rental properties you don't have any emotional attachment so you can take your investment decision with your brain and not heart.....
So rich never invest so much money in their home but they invest their money in such assets which they don't have any emotional attachments such as stocks, bonds, gold, rental properties, businesses....etc.....
02)Rich know the difference between two basic financial terminologies and that is the difference between Assets & Liabilities.
According to rich, Asset means today if you stop working than Asset puts money into your pocket and liability takes money from your pocket. The basic difference between rich and middle class is that, middle class people call liabilities assets such as home and this is the main difference between rich and Middle class.
Rich are more sound in Financial Knowledge than Poor.
03)Another difference between rich and middle class mentality is that, when it comes to buy a costly thing, Middle class think that "I can't afford it" while Rich think that "How can i afford it?"
When you think that "I can't afford it", your mind stops working. But Rich never think that I can't afford it, instead they think that "How Can I afford it?"
So when you think that, "How can I afford it?", your mind starts kicking answers......
04)Middle class thinks that "I work for my Money" while Rich thinks that, "My Money works for Me".
Rich people never work for money but their money work for them.......How? Well by Business and Investments........Business means your people working for you while Investments means your Money working for you.
Rich people know since their early life that "Money has the same potential to work in the Economy as you".They know this power of money since childhood so since childhood they had started thinking about how to make their money work for them? While middle class people since their childhood starts thinking that how to find a good job so that i can work for money?
05)Middle Class people learn that "How to write a Successful Job Letter" While Rich people learn since their childhood that "How to write a Successful Business Plan" so that I can raise Capital from Investors to start my own Business.
06) Middle class think that "How can I find a good, safe, secure and high paying job?" While Rich people think that "How can I create Jobs?"
07)Middle class people think that I will give my children higher education so that they can find a high paying job at some Corporation while Rich people think that I will give my Children higher education so that they can higher the people of the same skills at their own Corporation....
08)Middle Class people do a job and struggle to go up in a Corporate Ladder while Rich people thanks of owning their own Corporation.
09)Middle class people think that, More money will solve their Financial Problems while Rich people know the fact that, More money comes with more complex and higher level of Financial Problems. And key to financial success is "Financial Education" So more money you have, more you will have to take Financial Education.......
10)Middle Class think that "I am not interested in Money" and thus they avoid talking about money issues while Rich think that, "Money is Power" so they frankly and openly discuss about money matters and thus they are richer than middle class. Avoiding talking about money matters won't make you rich any more. But talking and discussing about money matters will certainly make you rich.......
11)Middle class owns all the things in their own name. While rich people owns nothing in their name but they own all of the things in their Company's name because of Asset protection, Tax benefits and creations of new wealth.....
See the Short Course - "The Power of the Corporate Structure" on this Blog to know what rich know about the power of corporate structure?
So Basic Difference between Rich & Middle class is their altitude towards Money and thinking about money.
