There are many thrifty, very rich people

How the rich got rich

Yesterday I read the following recommendation from a fund manager in Capital: 'Listen to the advice of rich people ‘. That sounds plausible. But many of us probably don't know rich people (which should be changed quickly). Still, there is another thing you can do to learn from rich people: imitate. Sounds plausible too, doesn't it? Copying and imitating ways of thinking, behaviors, strategies. But you have to know how the rich got rich.

1. Most millionaires got rich as entrepreneurs

Rainer Zitelmann writes in his book “Getting rich and staying: Your guide to financial freedom* “That 98 percent of the 100 richest Germans, and of the 100 richest people in the world 95.2 percent entrepreneurs are. In fact, there is hardly any wealth through dependent employment. Wolfgang Lauterbach, wealth researcher at the University of Potsdam even goes as far as to say: "Entrepreneurship is necessary to become extraordinarily wealthy."

What about freelancers? At least better than with employees: Freelance self-employed (doctors, lawyers, tax consultants, etc.) are more than 3.5 times more likely than employees to be wealthy instead of “just” earning an above-average income. However, freelancers cannot approach entrepreneurs.

Why is that? Employees and self-employed are paid according to time units. For example, per month or per hour. Unfortunately, time cannot be scaled. The day only has 24 hours, the year only 12 months. Entrepreneurs, on the other hand, are not paid per unit of time but per product. My favorite example: I advertise my ebook and 1,000 prospects want to buy it. What should I do? Nothing. You click 3 times and have the ebook. And I've made money 1,000 times. What does a masseuse do with 1,000 prospective customers at the door? She has to send them back home because the day doesn't have enough hours to serve everyone. She hasn't earned any money 1,000 times.

Plus: Return comes from risk. The risk of failure with a company and the associated consequences are higher than for employees.

2. Rich people are more open

Studies show: Rich people are more open to new ideas while the middle class prefers to hold onto what already exists. Coupled with the significantly higher willingness to take risks, this results in a well-rounded picture. Entrepreneurs are constantly on the lookout for new opportunities, gaps in the market, innovations and then take smart risks to take advantage of new opportunities. Another wealth study shows that entrepreneurs are less 'agreeable' than people in the middle class. Successful employees, however, are said to be very agreeable. Means: In order to have a career as an employee, you have to be adaptable and socially acceptable to a greater degree than the average, while for entrepreneurs the ability to deal with conflict is the more important quality.

Plus: millionaires just think differently. You can find out more about this in my article on the book “This is how millionaires think”.

3. Rich people change jobs

We now know that rich people are more open to new ideas and more willing to take risks. So it's not surprising that rich people tend to change jobs. Not just the employer, but the entire job! Two thirds of the rich, in the study cited by Zitelmann, have changed jobs at least once in the course of their working lives. The chance of advancement to prosperity increases sixfold if the occupation has been changed in the course of working life. Again: Rich people seek and see change and seize opportunities instead of hoping that everything stays the way it is.

4. Millionaires are damn frugal

For the book "Millionaire Next Door: The Surprising Secrets of America’s Wealthy* “The authors asked 1,000 millionaires about their savings and consumption behavior. Among other things, the result was the following:

  • 50 percent of millionaires have never spent more than $ 140 on a pair of shoes.
  • Fifty percent of millionaires have never spent more than $ 29,000 on a car in their lifetime, and 95 percent have never spent more than $ 69,000.
  • 90 percent pay no more than $ 26 for a bottle of wine.
  • 70 percent said they had shoes repaired instead of replacing them with new ones.

Thrift, rather than high earnings, is the main reason most millionaires are wealthy. Whoever wants to get rich has to live under his financial means. Because it doesn't matter how much you earn, but how much of it you keep, invest and thus increase.

Conclusion

Rich people are open-minded, frugal entrepreneurs who are willing to take risks. So should you start your own business? If you want to get rich you should, yes. But slowly. Quitting your job and opening a yoga school in Kreuzberg because you love yoga so much is definitely the wrong approach. Think about what you can do, what you like and (most people forget that) whether there is a market. When you've found a niche, you build your business on the side and switch over when the first sales start flowing. You can find out more about this and how I build up my company in my seminar.

Photo above: Pexels