It’s official: Australia’s rich are getting richer and there’s no such luck for those on the other end.
But the rich can’t keep getting richer than the average Australian forever – can they?
The richest tenth of households owns almost half Australia’s private wealth followed by a “comfortable middle” of 30 per cent owning 38 per cent, leaving the lowest 60 per cent – who tend to be younger – with 16 per cent of household wealth.
And COVID has only caused the gap to widen.
The report shows the average net worth of the richest ten per cent reached $4.75 million in 2017-18 and owns 46 per cent of household wealth which is underpinned by property assets, superannuation, shares and business investments.
Now we know that “true wealth” has nothing to do with how much money you have or how many properties you own, but if you’d like to join the ranks of the rich Steve Siebold gives some clues in his book How Rich People Think, which was the culmination of many years of study.
So before the wealth gap gets too wide for you to bridge, here are 11 ways Siebold says rich people soar above mediocrity, and the best part is, you can do it too.
Remember this is definitely not a judgment of people, just a statement of some facts, because Siebold found rich people…
1. Believe poverty is the root of all evil
Most of us are conditioned to think that money is the cause of all that’s unjust in the world.
But money is simply a commodity, it’s only as good or bad as the perception we have of it.
While the middle classes see shame in personal fortune, the rich recognise that although wealth can’t buy happiness, it can make life a whole lot easier.
2. Think selfishness is a virtue
It’s interesting that many who focus entirely on selfless acts always seem to struggle to make ends meet.
Siebold suggests this is because “if you’re not taking care of you, you’re not in a position to help anyone else. You can’t give what you don’t have”.
The rich see it as their obligation to earn more so they can contribute more.
3. Take action instead of relying on luck
While ‘average Jo’ waits for his lotto numbers to come up and prays for prosperity, those who aspire to greatness are busy solving problems.
There’s more money to be made coming up with answers to life’s challenges than waiting to be bailed out.
Rich people don’t expect Lady Luck to pay them a visit; instead they’re aggressive and fearless in their pursuit of wealth.
4. Value self-education
You might be surprised to know that many who top the world’s wealthiest list never completed high school.
They focused on acquiring specific knowledge that they could then ‘sell’, as an expert in their chosen field.
The rich keep their sights set firmly on the end destination, instead of getting caught up in the route taken to get there.
5. Dream of the future
Rich people don’t waste time on ‘what ifs’, or reminiscing about the ‘good old days’, like the working classes are wont to do.
"Self made millionaires get rich because they’re willing to bet on themselves and project their dreams, goals and ideas into an unknown future," says Siebold.
6. Apply the right balance of logic and emotion
People who fear losing money allow negative emotions to cloud their judgment, making financial decisions based on a deficit mentality instead of abundance.
Whereas the rich use emotions as the foundation for their actions, then apply logic and reasoning to the decisions they make in order to build a substantial asset base.
7. Follow their passion and love what they do
The rich work because they enjoy it, not because they must.
Through self-education they’ve uncovered their life’s passion and then they do what they love and make money as a result.
8. Use other people’s money
The rich are not scared to take on debt recognising leveraging other people’s money is one of the fastest and most successful ways to grow your wealth.
9. Believe in being something, not doing something
Most people get by in a constant state of ‘doing’, moving blindly from one task to the next without much thought for where each step is eventually going to lead them.
The world’s rich and powerful however, learn and grow from every experience – be it success or failure.
They don’t become consumed with the here and now, but remain focused on the bigger picture.
10. Understand human nature
Wealthy people know the markets are driven by fear and greed and play them accordingly.
They recognise that behavioural bias and human nature influence cyclical movements, while others are too busy looking for logic where there is none.
11. Know you can have it all
Most people believe that in order to gain something, you must sacrifice something else.
Or you must choose health or happiness, love or money, but you can’t have both.
This limitation mindset comes from years of being programmed to think with an either/or mentality, says Siebold.
On the other hand, "The rich know you can have anything you want if you approach the challenge with a mindset rooted in love and abundance."
So now that you have a greater understanding of what sets the very rich apart from the rest of the world’s population, the choice is yours.
Michael Yardney is a director of which creates wealth for its clients through independent, unbiased property advice and advocacy. He is a best-selling author, one of Australia's leading experts in wealth creation through property and writes the blog.