21 Ways Rich People Think Differently Than Average People

[Mr. Fabulous]

Anyone can achieve this,

No actually, they can't. Investing is a zero sum game, since money is finite. Not to mention the many factors that are completely out of our control, that factor into success.Obviously, we need to do something in order to achieve success financially, but there is a portion of luck that goes along with it as well.

There are many people who started out on the investment track and got pushed off somewhere along the line, due to *whatever*. You assertion that 'anyone can do this' assumes that we have complete control over the paths we choose and decisions we make, however this is not the case.

 

[Ace in the Hole]

No actually, they can't. Investing is a zero sum game, since money is finite. Not to mention the many factors that are completely out of our control, that factor into success.Obviously, we need to do something in order to achieve success financially, but there is a portion of luck that goes along with it as well.

There are many people who started out on the investment track and got pushed off somewhere along the line, due to *whatever*. You assertion that 'anyone can do this' assumes that we have complete control over the paths we choose and decisions we make, however this is not the case.

The point I was making was simply, that most don't even try.
Sure, bad luck can happen to anybody and certain things are out of our control.
Although I'm not sure why everybody would not have complete control over their own decisions?
You may have to suffer the consequences at times, but you still own your own decisions.

 

[Rolf Latham]

I am talking about purely passive income wherein you go to the ATM and just withdraw cash without ever doing any sort of work.

I much prefer the term "recurring" income

True passive income in nature as you describe is possible, but generally in my experience from centrelink.

recurring income comes from something you have built or invested in

By that definition, a large chunk of Australia has passive income

ta

rolf

 

[Rolf Latham]

Anyone can achieve this, but most are simply content to be comfortable, so don't feel the need to persue any further.

My take over a few years and a few clients across a couple of different business idealogies is more along the lines of folks arent willing to get "uncomfortable" for a little while.

In more common speak, at the root Humans are fearful.

nothing wrong with that.

How do I know ? I know coz Im there too, I expect most of us are..........imagine what you could achieve if you knew that you could not fail !

ta
rolf

 

[nhg]

I much prefer the term "recurring" income

True passive income in nature as you describe is possible, but generally in my experience from centrelink.

rolf

Lies. You have to fill out a form. All good things take hard work.

 

[BayView]

1mil per year passive income would require a nest egg of 20 mil considering a 5% return p.a. This means most of us in Australia and the planet can never be rich and have to be content to be average middle class. That, I find, sad.

Why is it sad?

I was talking about $1mill in gross income actually. If it is through a business, the nett could still be very high.

Many folk make a $1mill income (recurring as Geoff said) with very few tangible assets. A songwriter with royalties, a book writer with royalties, an inventor with royalties, a sports star with a sponsorship contract, a business with income and dividends from profits, and so on.

Doesn't mean we can't continue to strive towards that end, and it's the old saying;

"Aim for the stars, and you will probably hit the treetops"

I am talking about purely passive income wherein you go to the ATM and just withdraw cash without ever doing any sort of work. Where you can just write out 500k cheques without much concerns.

This is dreamworld stuff and would only be happening for a minute percentage of the word's population.

Believe it or not China, based on your figures you have given us over the past months, I class you as very close to the rich level in Aus.

 

[china]

Yep; it is sad, but reality.

I was talking about $1mill in gross income actually. If it is through a business, the nett could still be very high.

1 mil gross cannot achieve the things that you have previously described as "rich" in your previous post.

"Rich" to me; they never really need to work, have cool doodads and a great house/s, possibly a chauffeur and maid, and go to the Caribbean in winter, fly a plane, etc.

 

[china]

Believe it or not China, based on your figures you have given us over the past months, I class you as very close to the rich level in Aus.

If there is a consensus on this thread that "rich" is based on passive income above 250k per year, then I am unfortunately far, far away from being rich.

 

[china]

By that definition, a large chunk of Australia has passive income

ta

rolf

But not enough to be "rich". To be rich means to be way above average and that cannot be possible by the definition of average for the majority of people.

 

[BayView]

1 mil gross cannot achieve the things that you have previously described as "rich" in your previous post.

"Rich" to me; they never really need to work, have cool doodads and a great house/s, possibly a chauffeur and maid, and go to the Caribbean in winter, fly a plane, etc.

I can assure you, if I had $1 mill gross per year as of right now, I would never need to work again.

Neither would you; you already have a paid-off PPoR, shares and cash in the Bank.

The level of our richness will be different to others, but still there.

Having a maid, a cool PPoR and flying north for the winter is totally do-able at the base level rich....middle class folk even do it!!

But not enough to be "rich". To be rich means to be way above average and that cannot be possible by the definition of average for the majority of people.

If "average" is say; $200k gross income per year per household (I doubt that it is that much but let's use it for the argument) and if the average mortgage is say; $350k....

Someone on a nett income of $200k, with a fully paid off car/s and PPoR - is way above the average.

 

[nhg]

I can assure you, if I had $1 mill gross per year as of right now, I would never need to work again.

Neither would you; you already have a paid-off PPoR, shares and cash in the Bank.

The level of our richness will be different to others, but still there.

Having a maid, a cool PPoR and flying north for the winter is totally do-able at the base level rich....middle class folk even do it!!

If "average" is say; $200k gross income per year per household (I doubt that it that much but let's use it for the argument) and if the average mortgage is say; $350k....

Someone on a nett income of $200k, with a fully paid off car/s and PPoR - is way above the average.

Average household in come in SYDNEY is like $80k/year before tax from memory. It seems a lot of us on this forum make that after tax, or will in the near future without investments included.

Now does that mean we are satisfied, probably not. I know I don't feel rich. But to run around screaming poor and that we have it bad, is a bit... rich.

Perhaps we should fill the 'void' another way. Income doesn't keep you satisfied, it just helps do things that do. Take up glacier hiking or something.

 

[nhg]

Sydney Income statistics.

Granted median is not middle class, yet Sydney is the most expensive city in Australia, which is one of the most expensive cities in the world. but...

Median weekly household income $1,447
Median monthly mortgage repayments $2,167
Median weekly rent $351

http://www.censusdata.abs.gov.au/census_services/getproduct/census/2011/quickstat/1GSYD

If you're still not satisfied with what can be done with a few million, consider retiring in Ukraine perhaps.

 

[Rolf Latham]

Lies. You have to fill out a form. All good things take hard work.

so true

ta
rolf

 

[BayView]

Average household in come in SYDNEY is like $80k/year before tax from memory. It seems a lot of us on this forum make that after tax, or will in the near future without investments included.

Now does that mean we are satisfied, probably not. I know I don't feel rich. But to run around screaming poor and that we have it bad, is a bit... rich.

Perhaps we should fill the 'void' another way. Income doesn't keep you satisfied, it just helps do things that do. Take up glacier hiking or something.

You're preaching to the converted about all of the above.

My posts are trying to get China to see reality.

 

[nhg]

You're preaching to the converted about all of the above.

My posts are trying to get China to see reality.

Haha, yeah I'm aware. I've met a handful of SS face-to-face, and everyone seems fairly level headed. I was just clarifying to those who come see this in the future, that we aren't all living in a fantasy.

In saying that, I see China as being the one to hit the $100,000M mark seeing as that is where he seems to be most comfortable. (Once he takes a punt).

 

[Mr. Fabulous]

1 mil gross cannot achieve the things that you have previously described as "rich" in your previous post.

"Rich" to me; they never really need to work, have cool doodads and a great house/s, possibly a chauffeur and maid, and go to the Caribbean in winter, fly a plane, etc.

You seriously don't think you could have all of those things with a $1,000,000 p.a. income?

 

[china]

You seriously don't think you could have all of those things with a $1,000,000 p.a. income?

Definitely not. There was a year I had that income and I have none of those things. I know a few people who have had that income for a few years and they had some of those things. Chauffeur and maid are the difficult things to have and you will require much more than 1m p.a. gross income to sustain chauffeurs/maids. Maybe if the 1m income was purely NET passive income, then definitely, yes, you can have all of those things.

 

[Mr. Fabulous]

You're trippin', homie. I googled and found a guy who says they have a chauffeur which is about 50 bucks an hour for 40 hours a week (very few people would need a chauffeur for 40 hours a week). 52 weeks a year, that's $102,000. For a full time maid, the consensus seemed to be $50,000 a year, tops. Let's say you go to the Caribbean for a month with the wallet vacuum, oops, I mean The Missus. Let's say $50,000, all inclusive.

A great house, say 2 mill (yeah I know *you* think that doesn't mean a 'great' house, but the general attitude would be that 3 mill buys a pretty spectacular house). So let's say you borrowed 2.4 mill, 6% interest, so that's $144,000 interest. When you're not living it up in the Bahamas, your lifestyle runs to about $200,000. So all up, that's $546,000.

A $1,000,000 gross income gets you a tax bill of $424,000. That's just the basics, that doesn't take into account deductions, etc. Frankly, if you have a $1,000,000 p.a. income and you're paying the maximum amount of tax, you don't deserve to keep that income. But yeah, you could afford an extra $30,000 p.a. spending on top of all the things Marc listed with a $1,000,000 gross income.

 

[BayView]

Definitely not. There was a year I had that income and I have none of those things. I know a few people who have had that income for a few years and they had some of those things. Chauffeur and maid are the difficult things to have and you will require much more than 1m p.a. gross income to sustain chauffeurs/maids. Maybe if the 1m income was purely NET passive income, then definitely, yes, you can have all of those things.

So, you own your own PPoR - paid cash, have cash in the bank of some fabulous amount, earned 1mill in one year at one time...and still drive a 12 year old corolla......

 

[VYBerlinaV8]

So, you own your own PPoR - paid cash, have cash in the bank of some fabulous amount, earned 1mill in one year at one time...and still drive a 12 year old corolla......

There are definitely some things not adding up here.