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How the Wealthy Think About Money Differently Than Everyone Else

Money Basics • Beginner Investing • 6 min

What this lesson is about

It's not a secret list of stock tips. Wealthy households consistently make a handful of different decisions about assets, income, and time that most paychecks never get pointed toward.

2 parts · a quick check after each · then the quiz

Part 1 of 2

Ask, someone, who's, built, real, wealth, how, they, think, about, a, large, purchase,, and, you'll, often, hear, a, very, different, question, than, "can, I, afford, the, monthly, payment"., You'll, hear, something, closer, to, "does, this, put, money, in, my, pocket,, or, take, money, out, of, it,, every, month, for, years, to, come.", That's, the, core, of, the, assets-vs-liabilities, framing, popularized, by, personal, finance, books, like, Robert, Kiyosaki's, "Rich, Dad, Poor, Dad", (1997):, an, asset, is, something, that, generates, income, over, time,, while, a, liability, is, something, that, costs, money, to, own, and, maintain,, regardless, of, how, impressive, it, looks.

A, second, common, habit, is, "paying, yourself, first",, automatically, routing, a, portion, of, every, paycheck, into, savings, or, investments, before, any, discretionary, spending, happens,, rather, than, hoping, something, is, left, over, at, the, end, of, the, month.

Compound growthChange the amount, the rate and the years. The curve is the point.

Quick check

In the popular "assets vs. liabilities" framing of personal finance, what is an asset?

Part 2 of 2

Insider, Angle:, the, deeper, mindset, shift, is, about, time:, a, single, paycheck, is, capped, by, the, hours, in, a, day,, but, income-producing, assets., Rental, property,, dividend-paying, investments,, a, scalable, business., Can, keep, generating, money, without, a, constant, 1-to-1, trade, of, personal, time, for, dollars., This, is, a, real,, learnable, shift, in, how, to, evaluate, financial, decisions,, not, a, secret, reserved, for, people, who, are, already, rich., It, also, explains, why, high, income, alone, doesn't, guarantee, wealth:, someone, earning, a, large, salary, who, spends, all, of, it, on, liabilities, (cars,, clothes,, a, bigger, house, than, needed), can, build, zero, net, worth,, while, someone, earning, far, less, who, consistently, redirects, money, toward, income-producing, assets, can, build, real,, lasting, wealth, over, time.
Try, This:, Look, at, your, last, major, purchase,, or, one, you're, considering., Using, the, assets-vs-liabilities, framing,, would, you, classify, it, as, something, that, could, eventually, put, money, back, in, your, pocket,, or, something, that, only, takes, money, out?, Be, honest, about, which, one, it, is.

Quick check

What does "pay yourself first" generally mean as a financial habit?

Quiz

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