the difference between rich and middle class thinking

• the rich think about investing and saving
• they have brokerage accounts ( for mutual funds, index funds, shares)
• they have a business , which they own entirely or have a stake
• save more than 50% of their income and re-invest
• live like the poor – bare essentials , no frills , a frugal life
• drive 10 year old cars , live in modest homes ( it’s all stealth wealth )
• they have a very good idea of their money flow – income , expenses , savings
• They have a NET WORTH mentality – Income minus liabilities = assets
• They speak financial terms – very well versed with all the legal terms for finance
• The rich network, read daily, do something to be better today than yesterday
• They limit their social media and other screen time, avoid binge watching Netflix
• They re-invest 50 % or more of their income back into the business
• They find new ways of learning, attend webinars, seminars to increase their knowledge.
• The pool their money and lend it into peer to peer platforms
• They use the credit cards to get free travel rewards, cash back and hotel rewards because they fully pay off their credit cards before the end of the month.
• The rich are known to invest in alternate investments – art and fine wines
• Expensive Collectible Art has outperformed the stock market returns over the last 50 years (a few names like Ravi Varma , MF Hussain , Monet , Rembrandt , Van Gogh ,Picasso , just to name a few )

the middle class thinking is all about consumerism

as soon as the salary hits the account , they go shopping – for clothes , for phones , the latest television – you get the picture ( pun unintended ).

the middle class

• has a lot of debt – typically credit cards , home mortgage , car loans
• has no idea where their money is going
• don’t budget their money or follow a budget
• result .. there is too much month left at the end of money
• live pay-cheque (pay-check) – to pay-cheque (pay-check) , have no emergency fund reserves
• have no clue about the financial terms , no idea what is the difference between interest rate and APR ( Annual Percentage Rate )
• have no plan of getting out of debt
• love spending time on social media , binge watching netflix