Wealth Mindset vs. Poverty Mindset: How Can You Develop a Wealth Mentality? From Daily Finances

Understandably, we all have a lot of worry and anxiety around money. 

We get so many questions from our readers about the world of personal finance, wealth mindsets, financial motivation, etc. Which makes a lot of sense, considering that your mental health and personal development can be incredibly influenced by how you feel about, work with and experience money and wealth.

Today we're trying something a little different.

Considering how much we focus on the topic of mindset, we thought we would share one of our most popular articles on Wealth Mindset vs. Poverty Mindset from our sister site, Daily Finances. 

Let us know if you find it helpful, and you'd like to see more! 

Wealth Mindset vs. Poverty Mindset & How Can You Develop a Wealth Mentality? From DailyFinances.site

Wealth and poverty are a mix of work ethic, education, opportunity, chance, and so, so much more. It is a very complex topic. 

However, since Robert Kiyosaki’s hit book “Rich Dad Poor Dad”, a lot of attention has been paid to the “wealth mentality” and its dreaded counterpart, the “poverty mentality”, or “rich mindset” vs “poor mindset”.

In this article, we will focus on financial mentalities and make sense of these concepts.

Photo by Vincent Gerbouin

What Causes Wealth and Poverty?

Wealth and poverty are complex issues.

When it comes to poverty, in particular, there are many factors that are simply beyond individual decision-making. That’s true regardless of where you are studying poverty.

Wealth, on the other hand, requires deliberate action to be built up. Apart from getting an inheritance, wealth is typically built up over time, with some level of hard work, but always with a sense of mission.

If you’re wondering how this works and the “rich mindset” purported to promote wealth growth, read on.

Read this next: Do You Have a Negative Money Mindset? Overcome it & Reach to Financial Freedom

Can I Control My Financial Future?

To some extent, the answer is always yes. However, there are several factors that might exist in your current financial reality that can hinder that process:

• Too much debt
• Inability to earn an adequate income (disabilities, injuries, etc.)
• Dependent financial responsibilities
• Many other factors

However, if you are in a position to earn a middle-class income and aren’t bogged down by debt or other financial stresses, you are already a candidate for becoming a millionaire.

So, what does it take to embrace a “wealth mentality” and start getting rich?

According to Tom Corley’s research, there are a few key things most millionaires share in common:

• Coming from a middle-class income and either:

Earning a six-figure salary relatively early in your career or living very frugally.

• Maintaining a low cost of living and saving instead of spending lavishly
• Saving at least 20% of their income
• Beginning to invest and save early in life and continuing to do so (**pay close attention to this one, this is a key component of “wealth mindset”.)

What is a Poverty Mindset?

The “poverty mindset” describes the set of attitudes and beliefs that keep those who could potentially become rich in the middle or lower classes.

The poverty mentality is essentially defined by pessimism, which in turn is caused by fear and non-prudent decision-making. One of the worst ways this can be manifested is by rationalizing poor financial decisions.

For example, “Why should I invest now? It’s not like I’ll get rich. I might as well make sure I just enjoy my life and live in the moment.”

Most people will not get rich.

But that is no reason to ignore tested, practical financial logic. You will probably not become the next Warren Buffett.

So what? That is no reason to spend lavishly, not work hard, not save money, and not invest.

What is a Wealth Mindset?

The wealth mentality describes the opposite of the poverty mentality.

It is defined by optimism and prudent, wise financial decision-making.

If you subscribe to the “wealth mentality”, you:

• Believe you will one day be wealthy due to your hard work and sound financial decisions
• Understand that you will need to make the effort to save and then invest
• Appreciate the power of compounding interest
• Believe that improving your financial standing is the right thing to do and that it’s possible
• Want to test yourself and see what you’re made of

Having a “wealth mindset” does not mean believing in fairy tales or stroking your ego with unearned optimism. It’s quite the opposite, actually. It simply means that you believe in:

• The potential to improve your financial standing
• Taking a tested, practical approach to building wealth
• Self-discipline
• Delayed gratification

In real terms, to subscribe to the “wealth mentality” is a completely practical pursuit. Of course, the world will put many roadblocks in your way and building wealth will be extraordinarily challenging in some ways.

But with hard work and respect for financially sound decision-making, you will at least do the best you can and build far more wealth than you would have been able to if you subscribed to the poverty mentality.

How Do You Escape the Poverty Mentality?

It is important to see the poverty mindset for what it is: a mindset. So, the first step is to change your mindset...

Complete the Article on Daily Finances!

Want to read more? You can find the rest of this article on our Daily Finances site, including How to Escape a Poverty Mentality and How to Develop a Wealth Mentality.

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Photo by Karolina Grabowska