Why are there only a small percentage of rich people?
Why are so many people poor?
The experts are quick to point the finger of blame at a variety of causes: a low wages, America’s shrinking manufacturing base, U.S. companies moving oversees, China stealing our jobs, illegal immigrants stealing our jobs, poor education, the rich exploiting the poor, insufficient taxation of the rich, etc.
But none of these pundits ever address the real cause of this disparity – parenting.
America’s growing wealth gap, the great divide between the rich and poor, is a reflection of how America’s have’s and have-not’s were raised by their parents.
How do I know?
I spent 5 years interviewing 177 self-made millionaires and 128 poor people and documented what I learned in something that I call my Rich Habits Study.
What I learned from my five year study was that habits are contagious.
Almost all of these self-made millionaires picked up specific habits from their parents that gave them a leg up and enabled them to accumulate millions of dollars.
Nicolas Christakis, a Yale University professor and leading researcher on socially contagious behaviors supports my findings in his own research.
He also found that habits are contagious; passed from parents to children, good or bad.
Here are some of the discoveries he made from his studies regarding habits:
- Habits spread like a virus through your social networks.
- Parents pass good and bad habits down to their children.
- If your family is obese, your risk of obesity increases by 25%.
- If your family smokes cigarettes, you are more likely to smoke.
- If your family exercises, you are more likely to exercise.
- If your family does not value education, you will too.
- If your family has a negative outlook, you are more likely to be negative.
- The habits you learn from your parents shapes the life you lead.
What were some of the habits the self-made millionaires in my study picked up from their parents?
- You Create Your Life – Self-made’s were taught that they were the architects of their lives. You and you alone create the circumstances that make you rich or poor.
- Individual Responsibility – Self-made’s were not allowed to play the victim. They were taught to take personal responsibility for the good and bad in life and were not allowed to blame anyone but themselves when things went wrong. because things always go wrong in life.
- Respect for the Law – They learned from their parents to respect police and law enforcement officials. If they broke the law their parents punished them severely.
- Pursue Your Main Purpose – They were exposed to numerous novel activities. The purpose of this was to help their kids discover their in-born talents. 93% either liked or loved their jobs. When you find and use your innate talents to make money, that leads to happiness and financial success because you will want to devote more time to anything you love doing. When you can make money doing what you love this leads you to your true calling in life. Most parents don’t do this. Most lock their kids into one or two activities for ten years or more. As a result, kids never have an opportunity to explore different activities. There’s just not enough time to learn something new when you spend most of that time on travel teams.
- Pursue Dreams and Goals – 61% were required to Dream-Set. Dream-Setting is the process of writing out a script of your ideal perfect life. This script them became a blueprint for their lives. 80% were taught to focus on one stretch goal (long-term goal) until they achieved it. 97% were taught a very different definition of a goal, which is: all goals require physical action and all goals must be 100% achievable, meaning you have the knowledge and skills to pursue the goal. Most fail at achieving goals because they were taught the wrong definition of a goal, which is: goals are broad objectives, like making $100,000 a year. That’s a dream, not a goal. Goals and dreams are not the same thing. You create goals around each dream and when you realize all of the goals, you realize your dream.
- Pursuing Wealth is a Good Thing – 97% were taught that wealthy people were good, honest and hardworking. They were not evil or greedy.
- Hard Work Ethic – The self-made’s were not given things by their parents. They were required to work for the things they wanted. At an early age (nine or ten) the had to work to buy things they wanted. 55% were forced to work 10 or more hours per month, at a minimum.
- Respect Property of Others – They were taught by their parents to respect the hard earned property of others.
- Daily Self-Improvement – 88% were required to read educational books a minimum of 30 minutes or more every day. 54% were required to learn new words to expand their vocabulary. 68% were programmed for college – they were indoctrinated with the idea at an early age that they would be going to college.
- Use Time Productively – They don’t allow their kids to waste time on TV, video games, social media, Internet, etc.
I also studied the poor and found some common habits that poor people picked up from their parents:
- Dependence on Government and Other – They were taught to rely on government benefits and the handouts from others. This created a dependency mindset that stayed with them their entire adult lives.
- Defiant of the Law – They were taught that because the cards were stacked against them, the police and law enforcement were their enemies and were intent to keep them down and out. This mindset puts many of the poor in prison, which only keeps them poor.
- Resent the Rich – They were taught to despise those who were successful because the rich were evil, greedy and responsible for poverty because they paid low wages.
- Poor Work Ethic – They were taught, by example, to seek out free government benefits in order to help them survive. Dependency results in a poor work ethic. Why work if you can get what you need without working?
- Entitlement Thinking – They instilled in their kids the belief that the poor were unfairly persecuted and taken advantage of by the rich. Therefore, they were entitled to the property of rich people. 87% of the poor believed rich people should be taxed more so that government would have more money to give back to poor people.
- Gambling – They learned from their parents that gambling was one of the only ways out of poverty. As a result, 77% of the poor gambled on the lottery every week.
- Drugs – They learned by watching their parents that drugs were their only escape from their hellish existence. 60% of the poor admitted to getting drunk frequently.
- Over Eating – They picked up the bad eating habits of their parents. 66% of the poor were 30 pounds or more overweight.
- Waste Time – They watched their parents spend hours in front of a TV and that habit became contagious. 77% admitted that they watched more than an hour of TV every night. 78% admitted to watching a lot of reality TV. This time wasting habit infected their own kids. The poor in my study said that their own kids spend many hours every day watching TV, playing video games or spending their time on social media, the Internet, etc.
The buck stops with parents.
Children pick up the habits of their parents.
Parents are the only shot most have at a mentor in life.
When parents are poor mentors, their kids suffer and this often leads to poverty; a cycle of poverty that extends to multiple generations.
SUBSCRIBE & DON'T MISS A SINGLE EPISODE OF MICHAEL YARDNEY'S PODCAST
Hear Michael & a select panel of guest experts discuss property investment, success & money related topics. Subscribe now, whether you're on an Apple or Android handset.
PREFER TO SUBSCRIBE VIA EMAIL?
Join Michael Yardney's inner circle of daily subscribers and get into the head of Australia's best property investment advisor and a wide team of leading property researchers and commentators.