It’s been said that the rich are just like us, except they have more money. But these days we can study the habits of the wealthy with scientific precision and, as it turns out, the rich are not like most people—at least when it comes to how they handle money.

Focusing strictly on financial basics, we can learn that the majority of the wealthy earned their money. Only about ten percent of the fabulously rich were born into money and most of them belong to a younger generation. According to the Congressional Budget Office, when we look at income distribution in America, just ten percent of the families own seventy-five percent of total wealth. The bottom twenty-five percent actually have negative wealth numbers. There are some verifiable habits the wealthy have when it comes to money that are worth copying.

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The Essays of Warren Buffett
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They Set Priorities

Higher education is the largest single indicator of wealth and the rich invest in their children’s education. Households headed by an individual with an advanced degree had, on average, four times more wealth than households headed by someone with a high school diploma. Say what you want about common sense and making a living without college, but the research says if you want more wealth, finish college.

They Invest for the Long Term

Only about fifty-five percent of Americans have any money in the stock market. That figure has stayed stubbornly the same during the very years income inequality has gotten even worse. That correlation is not a coincidence. The wealth invest money in education; they also invest in stocks and other areas and do so for the long term. Systematic investing is how the wealthy build their wealth.

They Use Credit Strategically

The wealthy understand that there is no such thing as good debt and therefore use credit strategically. They also understand there’s a huge difference between borrowing money for a mortgage and using credit to leverage the purchase of a multi-family housing unit. One is a more risky use of credit, while the other will generate income and build long-term wealth.

They Invest in Hard Assets

The wealthy are far more likely to invest in farm land, gold and silver coins, timber, income producing machinery and commercial property. The rich understand the value of a dollar stems only from what you can get in exchange when trading it. Cash is not a goal of the wealthy; it’s a tool. Cash is the tool that one uses to build wealth and wealth is not found in paper. Wealth is held, and preserved, in tangible assets.

They Invest in Building a Business

Three quarters of the wealthy equate their success in life with their success building a business. The wealthy understand that working for wages is a loser. To get rich you need to raise your income and the best way to do that is to build a business.

The summary is that there are no shortcuts to building wealth. It takes hard work, sacrifice and investing for the long term. It means focusing your great efforts on building a business instead of working for wages. Being wealthy means using credit both sparingly and strategically while exchanging your cash for things of tangible value.