Archive for March 24, 2009
I recently downloaded a free copy of Jean Chatzky’s new book, The Difference, How Anyone Can Prosper in Even the Toughest Times from Oprah.com. The basis of the book is a study of 5,000 individuals who were asked specific questions about their personal qualities and characteristics. The goal of the survey was to determine how the wealthy attain and grow their fortunes. The question is not what they did for a living or how they invested their money, but rather what traits and habits provided them with a natural advantage to become wealthy in the first place.
Chatzky defines wealthy individuals as those with investable assets (not including home equity) of nearly $2 million. Knowing that money accumulates over time Chatzky includes an additional breakdown of wealth based on age. The details of her categorization are included below:
- $1 million or more for ages 55 or older
- $750,000 or more for ages 45–54
- $500,000 or more for ages 35–44
- $250,000 or more if under age 35
Based on the survey results Chatzky believes that wealthy individuals exhibit seven common personality traits. Throughout the book she details these qualities and then provides examples of how you can practice them. The seven traits are optimism, resilience, connectedness, drive, curiosity, intuition and confidence.
Many of the traits Chatzky defines overlap one another. For example, optimism is not just the notion that good things will happen, but also the idea that while bad events may occur the good events will outnumber the bad. Resilience is tightly coupled with optimism, as resilience is the confidence to overcome the bad situations as they arise, and confidence stems from the idea that the wealthy believe in their ability to conquer a situation and complete the task before them. Of course, the wealthy also have the drive and desire to succeed and often believe failure is simply not an option.
According to Chatzky the wealthy also have strong intuition. They follow their gut and trust that the friends, colleagues and acquaintances they form relationships with won’t steer them in the wrong direction. Again this sense of intuition is closely coupled with connectedness. The wealthy connect with people they trust in all aspects of life including their work, family and community. Lastly the wealthy have a natural curiosity. A constant, driving desire to learn, not just from formal education, but through reading and learning on the job.
According to Chatzky the study also revealed four natural habits of the wealthy. They include working hard, saving habitually, investing soundly and aggressively and giving back. Wealthy individuals tend to sleep less than others and often mix downtime with work. These individuals are passionate about their work and don’t see extra time outside of the typical 9-5 as a chore. The wealthy save habitually. They view savings as an absolutely essential financial goal and grow their fortunes by investing in stocks, mutual funds and real estate. Lastly the wealthy tend to be grateful for all that they have and give back to the communities and organizations they believe in.
I was quite surprised by how closely the descriptions of the wealthy matched the personality traits of my husband and I. In fact, as I was reading the book I couldn’t help but place mental check marks next to six out of seven traits and four out of four habits of both my husband and I. Perhaps this is why my husband and I fall into Chatzky’s definition of wealthy?