How to think like a rich guy …

Steve Siebold, author of “How Rich People Think,” spent nearly three decades interviewing millionaires around the world to find out what separates them from everyone else.

“It had little to do with money itself, he told Business Insider. It was about their mentality.”

Here are my favorites from his 21 Ways that Rich People Think Differently:

3. Average people have a lottery mentality. Rich people have an action mentality.

“While the masses are waiting to pick the right numbers and praying for prosperity, the great ones are solving problems”

4. Average people think the road to riches is paved with formal education. Rich people believe in acquiring specific knowledge.

“Many world-class performers have little formal education, and have amassed their wealth through the acquisition and subsequent sale of specific knowledge.”

5. Average people long for the good old days. Rich people dream of the future.

“People who believe their best days are behind them rarely get rich, and often struggle with unhappiness and depression.”

7. Average people earn money doing things they don’t love. Rich people follow their passion.

“To the average person, it looks like the rich are working all the time … But one of the smartest strategies of the world class is doing what you love and finding a way to get paid for it.”

8. Average people set low expectations so they’re never disappointed. Rich people are up for the challenge.

“No one would ever strike it rich and live their dreams without huge expectations.”

12. Average people live beyond their means. Rich people live below theirs.

“The rich live below their means, not because they’re so savvy” … but because they can … and they do!

15. Average people would rather be entertained than educated. Rich people would rather be educated than entertained.

“The rich appreciate the power of learning long after college is over … Walk into a wealthy person’s home and one of the first things you’ll see is an extensive library of books they’ve used to educate themselves on how to become more successful … The middle class reads novels, tabloids and entertainment magazines.”

click for the full list

Thanks to CH for feeding the lead

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Outliers’ KFS … find a satisfying job

This is one of several posts extracting some key points from the book Outliers: The Story of Success by Malcolm Gladwell, Little Brown, 2008

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Gladwell’s Observation

The ingredients to a satisfying job:

Autonomy … “a long leash”, “room to roam”

Complexity … varied experiences, sufficiently challenging

[Meritocracy] … strong connection between effort and reward

The more you like your job, the more likely you are to succeed at it. [No kidding, Malcolm]

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Outliers’ KFS … Speak up if the plane is going to crash

This is one of several posts extracting some key points from the book Outliers: The Story of Success by Malcolm Gladwell, Little Brown, 2008

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Gladwell’s Observation

Historically (until recently), Korean airlines have had a disproportionate number of major commercial plane crashes.

Gladwell says that it’s because flight crew members are too deferential to the captains and downplay or sugar coat information that they give them.  It’s called “mitigated speech” — a result of a culturally high PDI (power distance index). 

When a culture’s PDI is high, deference to authority figures is high.  So, subordinates are reluctant to speak up — even in a crisis.

So, instead of yelling “pull up we’re too damn  low”, a co-pilot might ask “are we on the glideslope, sir?”.  So, critical information is either not conveyed, is conveyed casually, or requires an extra analytical step (or two) for its importance to be decoded.  Valuable time is lost in the process — sometimes fatally.

The countries with the highest PDI are: Brazil, Korea, Morocco, and Mexico.

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Important Note: the air lines in high PDI countries are aware of this dynamic (now) and train their flight crews accordingly.  So, not to worry.

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Outliers’ KFS … Spend your time off wisely

This is one of several posts extracting some key points from the book Outliers: The Story of Success by Malcolm Gladwell, Little Brown, 2008

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Gladwell’s Observation

Generally, people conclude that U.S. schools fail miserably.  That’s probably true, but Gladwell found an interesting twist. 

Some Baltimore elementary schools gave students a battery of standardized tests in September to set a baseline and June — to measure accumulative school year achievement.

The general conclusion: roughly equal progression (from different baselines) for all students — regardless of their family’s income level.

The twist: researchers looked at changes from the June scores to the September scores — to measure retention or development during the summer vacation period.

What they found: at best, low income kids scored the same in Sept as they did in June — suggested limited development during the summer.  In general, higher income kids scored higher in September than they did in June — suggesting that their summer activities (reading, camps, classes, family trips, etc.) were constructively developmental.

Bottom line: students from lower income families would do better with a longer school year or more structured summer activities

Takeaway: Don’t waste your time off … think of it as valuable development time.

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Outliers’ KFS … be smart, but not too smart

This is one of several posts extracting some key points from the book Outliers: The Story of Success by Malcolm Gladwell, Little Brown, 2008

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Gladwell’s Observation

Success requires intelligence plus personality plus ambition.  But, intelligence and achievement are far from perfectly correlated.  That is, high intellect doesn’t always translate into a greater likelihood of success.

Why?

First, because “general intelligence” does not assure “practical intelligence” … think book smart versus street smart.

[Often, people with high intellects tend to become linear logic specialists ... that is, they may have vision, but not peripheral vision ... they can connect the dots (convergence) but not think out of the box (divergence).]

Below a certain level of intellect, success is very unlikely.  But, there’s a “threshold effect” … if a person is just smart enough or talented enough to pass the qualifying threshold, then success is more a function of personality and ambition, moreso than incremental intellect.

Example cited: affirmative action law schools … some students may not have as high an intellect as others do, but they do well because they are “smart enough” to succeed.

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Outliers’ KFS … the 10,000 hours rule

This is one of several posts extracting some key points from the book Outliers: The Story of Success by Malcolm Gladwell, Little Brown, 2008

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Gladwell’s Observation

Mastery of a complex skill doesn’t come easy orfast.  Given an adequate amount of talent, the magic number is 10,000 hours.  That’s how long it takes the brain to assimilate the necessary knowledge and habitualize a complex set of relevant tasks.

Examples cited: Bill Gates and his mastery of PC software; elite classical musicians; the Beatles (before becoming overnight sensations).

Note: a typical work year is 2,000 hours (8 hours per day times 5 days times 50 weeks) … So, it takes 5 years of dedicated full-time effort to become success proficient.

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Ken’s Question: Tell me again how much relevant experience Obama had before becoming President ?

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Outliers’ KFS (Key Factors for Success) … Check your ‘born on’ date

This is the first of several posts extracting some key points from the book Outliers: The Story of Success by Malcolm Gladwell, Little Brown, 2008

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Gladwell’s Observation

When you’re born significantly impacts the likelihood that you’ll be successful.

On a macro level, outliers reach maturity in the early stages of a “transformational era”.  For example, Bill Gates was wildly successful, in part, because he caught the early wave of PCs.

On a more micro level, your specific birthdate matters because of “relative age”.  Many schools and sports have cut-off dates for admitting annual cohort groups.  For example, little league baseball leagues typically place kids in age brackets that run from Aug.1 to July 31.  Schools may require that a student turn 6 by a certain date (say, Sept.1)

Kids born right after a cut-off date have an advantage — they’re older.  At young ages, there’s a big  proportional maturity difference (physical & intellectual) between the oldest and youngest members of the cohort.  So, the oldest tend to outperform the youngest by a big margin.

And, the advantage tends to be an accumulative because early high achievers are often “steamed” or “tracked” — think fast reading groups and competitive travel teams — with their sub-cohorts getting more attention, more resources, and better teaching & coaching.

Generally speaking people born on the right date are beneficiaries of  more and more specialized opportunities to succeed.

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