Three Qualities to Become Wealthy (And Three More to Become Poor)
The power of vision, gratification, and compounding to make or break your dreams
Whenever I travel around the world speaking and teaching, I always run into the same question, "What's the secret to becoming wealthy?" I've found there is no secret. Instead, it is a way of being. And this requires constant growth and reorientation.
A number of years ago, there was a study done of rich and poor all around the world to find out how people born into poverty eventually became wealthy.
Three qualities of the wealthy
The study found that these people, regardless of where they live, possess three qualities.
1. They maintain a long-term vision and plan
The study found that these people thought and planned for the long term and knew that they would ultimately achieve financial success by holding to a dream or vision.
2. They believe in delayed gratification
Rather than get everything they wanted right now, these people were willing to make short-term sacrifices to gain long-term success, which is the basis of delayed gratification.
3. They use the power of compounding in their favor
Albert Einstein was amazed at how money could multiply just by the power of compounding. He considered the compounding of money to be one of the most amazing inventions. This study took compounding beyond just money, however, and found that knowledge and learning gained from each baby step, each little success and failure, also compounded over the years. People who took no steps at all did not have the leverage of a magnified accumulation of knowledge and experience that comes from compounding.
Three qualities of the poor
The study also found what caused people to go from wealthy to poor. There are many rich families who lost most of their wealth after only three generations. Not surprisingly, the study found that these people possess the following three qualities.
1. They have short-term vision
Today, I meet people who get frustrated with me because they want me to tell them how they can make more money immediately. They don't like the idea of thinking long-term.
2. They have a desire for immediate gratification
Many are desperately seeking short-term answers because they have money problems today caused by consumer debt and lack of investments due to their uncontrolled desire for immediate gratification. They have the lifestyle of, "Eat, drink, and be merry."
3. They abuse the power of compounding
Much like the good habits and learning that happens for those who become wealthy by using compounding, those who have bad life and financial habits compound those habits over time. This abuses the power of compounding and leads to long-term debt instead of long-term wealth.
I find these types of people want the quick answer. They want me to tell them what to do to acquire great wealth, but they need to understand who they must become first. In other words, too many people are fixated on the get-rich-quick philosophy of life. I wish these people luck. They're going to need it.
Rich Dad is not about get rich quick
One of the biggest mistakes critics make about Rich Dad is that we're about getting rich quick. Nothing could be farther from the truth. Since our beginning, we've been about small steps leading to great wealth over time—and about changing who you are so that you can become who you want to be.
This is why we always advocate for investing for cash flow rather than flipping to try to make a profit. It’s why we encourage long-term thinking like good tax planning and the proper corporate structures to protect your money. It’s why we show people how to be rather than what to do.
Ultimately, our goal is, and has always been, to help you become successful. So, how's it going for you?