May 25, 2016

The mentality of the rich is completely different than the way the middle class thinks. Even very high-income people are still tied to their jobs where the rich mentality ensures not only Financial Independence but also Financial Safety and Stability.

The Rich Mentality and Why It’s Different than Middle-Class Thinking

Recently I was having a conversation with someone. They were explaining the school program they were in, the job they wanted to get, and their career goals.

I looked at him and said: “So your goal is to work?”

He wasn’t really sure how to respond. I continued “Well, it seems like you have a very detailed plan and you are talented and intelligent. I think you are doing a great job accomplishing your goals.”

Confused by my words and tone, he asked: “What’s your goal?”

“My goal is to not have to work” – Eric Bowlin

I’m focused on being financially independent.

Rich is Not a Number, it’s a Mentality

How much money makes you rich? Do you define it as cash in the bank, or income?

What about debts or mortgages, how do you account for those? Is the lawyer making $400k per year better off than the retired person making $100k passively from investments?

I bet you can’t really answer those questions.

It’s because being rich is in your head. You have a vision of what “rich” is, so if you change the image in your head, then the definition of “rich” changes. You cannot define rich as a number.

Instead, can you tell me who has the rich lifestyle:

  1. A person who works 40-60 hours a week, drives expensive cars and lives in a McMansion. He often misses his children’s games and recitals because of work, but he makes up for it by taking the family on a 2 week vacation every year to a nice place in a 4 or 5 star hotel.
  2. A person who works 2 hours per week, if at all. He drives a normal car and lives in a decent, but modest home. He can travel the world with his family, can stay at home. He has plenty of free time so he often works a side job, or donates his time to a local charity. He spends every day with his children, watching them grow up, teaching them, and helping to raise them (instead of leaving that up to a nanny).

Some readers may opt for #1, but the majority of people would prefer life #2. Obviously, there are hundreds of variations of each lifestyle, but the concept is the same – being rich is a mentality, not a number.

The person who is free from the requirement of working can lead a more meaningful life, be it through work, charity, family, or something else.

The person who needs to work can lead a meaningful life, but it would always be an improvement to be financially free.

So, if you adopt the mentality of the rich, you also can achieve the goal of being “rich,” if you so choose.

Rich mentality #1 – Have the Right Goals

Maybe I’m an optimist, but I believe intelligent and capable people tend to achieve most of their goals. Perhaps they fall a little short, but are far better off than before, right?

The problem is that most people set the wrong goals.

If your goal is to work for 40 years and retire, you probably will achieve that goal.

You know what, if you set your goal to stop working at age 30, you can probably achieve that goal too.

Rich Mentality #2 – Understand that Assets Pay You and You Pay for Liabilities

The biggest problem with the middle class mentality is the constant spending on liabilities instead of assets.

It’s really simple, if you pay each month, it’s a liability. If it pays you, it’s an asset.

The middle-class invest in “homes” and “nice things” with some savings stashed in wall street.

The rich mentality is to invest in things that pay you – businesses, ideas, real estate, and more.

Many wealthy people have very small stock portfolios as a percent of their total wealth. The exception may be the ultra rich which use stocks to take over businesses (think about Warren Buffet) which just makes it a different way of taking ownership of business.

Rich Mentality #3 – Diversify Income, not Stocks

The rich focus on creating multiple streams of income.

The middle class are focused on just one stream of income and save a fraction by buying multiple mutual funds (stocks under perform real estate anyhow).

The rich have business income, rental income, referral fees, affiliate payments, website advertising, and business income among other things.

The middle class have a job.

Which would you rather be?

Sign up to learn more about Financial Independence. Follow the rich mindset and give up on the idea of being middle class.

About the author 

Eric Bowlin

Eric is an investor that achieved financial independence at the age of 30. He started in 2009 with the purchase of his first triplex and now owns over 470 rental units. He spends his time with his family, growing his businesses, diversifying his income, and teaching others how to achieve financial independence through real estate. Eric has been seen on Forbes, Trulia, WiseBread, TheStreet, Yahoo Finance and other financial publications. You can contact Eric by emailing him at [email protected] or with this contact form

  • This is a great concept article – and the infograph that goes along with it describes the concept beautifully! I’ll definitely have to share this.

    I generally refer to this concept as "wealthy" rather than "rich". In other words, I view "rich" as having a high net worth. Meanwhile, I view "wealth" as the ability to sustain your livelihood without working. Therefore, someone worth $100k living in Thailand isn’t necessarily rich, but they could be living off of just 4% (very frugally) and then they would be wealthy.

    Finally, I really like your second point — if it pays you it’s an asset, if you pay for it, it’s a liability. This is a very simple concept that many people miss. It also explains why people "invest" in bigger houses, newer cars, and "valuable" jewelry – rather than worthwhile investments.

    Great blog and I look forward to reading more!

    • Hey Rob,

      I really appreciate the compliment! It was actually my first try at an infographic so I’m glad to hear it worked out.

      I think there is definitely a difference between rich and wealthy. People probably go back and forth on this one all the time. Honestly, I just like the way "Rich Mentality" sounds better than "Wealthy Mentality."

      Realistically, it should be "Investor Mentality" because I believe most wealthy/rich people are actually investors. They work to improve their business or real estate holdings, but they don’t work as an employee. People search for things like ‘get rich’ or ‘how to be rich’ etc… So I tailored the article toward that crowd.

  • Hey Eric,

    This article is so awesome and so true.

    When I was single, I was working 70 hours per week to build my wealth as quickly as possible. No Martinis or crappy network lifestyle…

    Now at the age of 34, I can spend everyday time with my new born baby. It’s priceless.

    I’m going to start a weekly "Great Read" page, and this article will be published next week. It’s so great that must be share.

    Enjoy your trip.

    • Inspirational!

      "Now at the age of 34, I can spend everyday time with my new born baby. It’s priceless."

      That’s the whole point of financial independence. I love to hear stories like yours.

      Thanks for the compliment. I’m glad you enjoyed the read.

  • Awesome infographic! I am definitely set on the #2 way of thinking, just need to keep doing what I am doing and eventually I will be financially free. 🙂

    • Thank you for the compliment!

      Great to hear! I think nearly everyone can make it if that is the goal the work toward every day.

    • Thank you for the compliment!

      Great to hear!That’s the whole point of the "rich mentality" infographic…. Make it your goal to work toward every day and you’ll get there.

  • So true about the difference between the rich & middle class, but I also think you could take it one step further between middle & poor. One of the key difference with poor would be 99% of income is focused on paying the bills (in my opinion).

    The rich see income opportunities where others only see expenses.

    • I think that is true… But a lot (not all) people grow their debt until it takes up most of their income, then they can’t save.

  • Great infographic. I see many people who don’t know the different between assets and liabilities and say that they’re "investing" in something which is not an investment at all. Not sure if I agree completely with your take on the stock market. I think you can invest in stocks as well real estate, business, etc.

    • I did say stocks are investments. Stocks, business, ideas, other passive income are all investments.

      What I was saying is that buying a lot of different stocks is not truly diversifying. People should have multiple streams of income. Dividends are just one potential stream of income.

  • Excellent info-graphic Eric. It comes to basic definition of Assets vs. Expenses. Most people don’t get that distinction right and call wrong things as ‘assets’ just because they like owning them or paying for them. I cover this in my article on being Sensibly Frugal. Thanks, Ten Factorial Rocks (

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