We are the products of our habits and our scope of knowledge, and we pass those down through generations. According to Tom Corley, an author, CPA and financial planner, wealthy people have vastly different habits than poor ones. Corley’s new book co-authored with Michael Yardney, “Rich Habits, Poor Habits,” will come out in the United States in October.
Corley says that the main difference is that rich people have a “growth” mindset, and they pass that along to their kids.
Corley conducted a survey by interviewing 233 wealthy people who make $160,000 or more in annual income and hold at least $3.2 million in net liquid assets and 128 poor people who make less than $35,000 per year and have less than $5,000 in assets.
Over five years, Corley posed 144 questions in 20 categories to each person and saw distinct patterns emerge.
Here’s one caveat about Corley’s study: It’s much easier to create wealth when you have family resources, connections and know-how.
For many people, it’s nearly impossible to break out of the poverty cycle—especially when you add in systemic biases that keep women, people of color, LGBTQ and other marginalized people from making less and having fewer opportunities.
“Pursuing success, particularly when you're poor, you have to bust through so many hurdles—so many more hurdles than say somebody who's in the upper-middle class would have to break through,” Corley said.
“This idea of persistence, this relentless persistence to single minded focus on what your end is, your vision.”
He says that anyone trying to break through a glass ceiling might need to find a mentor of similar demographics who has gone before if the family isn’t helpful.
“That's the whole idea about the rich habits, is that you just duplicate what somebody else is doing in terms of their habits,” he said, “They're going to have certain habits, certain behaviors, certain thinking that you don't have. Then you can just emulate them. Plus, it's part of the associating with other like-minded people. You want to associate with other people who are doing what you're trying to do. … If you build relationships with them, they'll help you by opening up the doors, sharing information with you, mentoring you.”
Corley says his research revealed that wealthy people cultivate the following habits, and pass them to their children:
Reading: Corley found that 88% of the rich folks in his study spent 30 minutes or more every day reading to learn , whether it was about money, how to succeed in their industry, self-help, biographies of successful people and history.
“The rich people were reading all sorts of things that help them understand to be more successful in life.
The poor just weren't doing that,” he said. But before you jump to the conclusion that poor people don’t have time to read because of work, childcare or other issues, the study also found that poor people watch way more television than the wealthy. Children who grow up to be successful were also encouraged to read, even if their parents were uneducated.
Cultivating relationships: “You want to associate with those people that typically upbeat, optimistic, enthusiastic, positive types.” Corley said.
If you’re not in a circle that meets that criteria, volunteering at a community nonprofit is a good way to find them.
“They're usually the successful people in the community. These people can open up a lot of doors for others,” he said.
“I was on four different boards at one time, or four different nonprofits, and eventually I rose to become one of the board members. I've gotten so much business from it. I've also helped people get jobs through these nonprofits.”
He also spoke about the value of the lost art of a well-timed phone call to recognize a birthday, condolence, graduation, promotion or simple hello in this Facebook “likes” age.
“Now you can take these phone call habits and separate yourself from the herd by the competition by just making a phone call.”
Exercising: Corley said he was surprised to learn that so many wealthy people had exercise in common, but when he dug deeper, he saw the obviousness of it. Because exercise improves brain performance by increasing the amount of oxygen and helping the health of the neurons, people who exercise think faster and have better memories—which make you more competitive in the workplace.
Managing anger: It’s normal to feel anger and frustration, but how you express it can make or break your success. “Anger, I found in research, was one of the most costly emotions. No matter how many good habits you had, if you didn't have control over your emotions, you literally wipe out all the good that you do, because you damage relationships with people who would otherwise want to help you in life,” he said. In his study, he found that the successful people chose their words carefully.
Exploring talents: When kids are little, they get to do a lot of activities such as art, music, theater and sports. But as they get older, they focus on just one or two.
“That's such a big mistake, because unless you're exposing your kids to a broad range of activities, how on earth are you going to find out where their inner talent lies? I think it's important that parents understand they need to expose their kids to numerous activities during a single year, and then change those activities up.”
Keeping an abundance mindset: Of all the habits, this is the most significant that plays out in every aspect of our lives.
Our brains are wired to emulate our parents from the start. “We're picking up the habits, the behaviors, the thinking and the emotions of our parents subconsciously without us even knowing it,” Corley said.
That includes bad habits such as addiction to drugs, alcohol, TV, gambling, social media, etc. He knows this one firsthand as one of eight children in a family that had money, and then lost it. His mother, a religious woman, would frequently quote the Bible’s Mark 10:25—it is easier for a camel to go through the eye of a needle, than for a rich man to enter into the kingdom of God.
“So I grew up thinking that rich was bad, pursing wealth was bad,” Corley said. “If you're teaching your kids that, you're disincentivizing them from pursing success.”
Dream-setting: “This is one of the most important things that wealthy people do. So dream-setting is a process. It's basically visualizing what your ideal perfect life would be,” Corely said.
The self-made millionaires in his study would map out what their dreams are at least 10 years into the future, and then build goals around the dream to make it a reality.
“I think this is where the goal setting process fails so many people, is they set goals, but the goals are not necessarily built around dreams, so it's not a process, it's just random things, like most people do it on January first. You want to actually build an infrastructure, a blueprint for your life. How do you do that? Well you do the scripting process, you paint a picture with words of your ideal perfect life, you bullet point each one of the dreams that are in that script, and then you attack each dream like it's a rung on the ladder.”
