If I were to take a random sample of individuals, then ask them three questions entirely unrelated to finances—for example, how much TV they watch, how early they start their day, and how often they exercise—I could arrange them by income with near-perfect certainty. This is because one’s relative wealth, whether relatively rich or relatively poor, is largely the product of lifestyle choices, which in turn are largely the product of learned cultural values and personal temperament.
Differences in lifestyle choices between the wealthy and the poor are sources of endless fascination for sociologists. By studying disparities in behavior and values between different income brackets, we see that the single biggest factor in determining financial success is the choices an individual makes. Choices. Not luck. Not institutional bias. Not social prejudice.
A recent article I read explored the disparities between the rich and poor by assessing each group’s behavior preferences in categories entirely unrelated to income and finances. Some examples:
70% of wealthy people consume less than 300 calories of junk food per day; 95% of poor people consume more than 300 calories of junk food per day
Just 20% of wealthy people gamble, while 50% of poor people do
80% of wealthy people self-reported as regularly focusing on accomplishing a single goal; just 12% of poor people do the same
76% of wealthy people exercise 4 days a week or more, compared to just 23% of poor people
63% of wealthy people listen to audio books, while only 5% of poor people do
88% of wealthy people read 30 minutes a day or more for educational or career reasons, compared to just 2% of poor people
81% of wealthy people maintain to-do lists; just 19% of poor people do
6% of wealthy people regularly watch TV, while 78% of poor people regularly watch
44% of wealthy people wake up at least 3 hours before their business day starts compared to only 3% of poor people who do the same
And one of the most interesting tidbits: 74% of wealthy people teach their kids daily success habits, compared to just 1% of poor people
The most significant items on this list are those related to reading and teaching children success habits. Books and parental guidance are the two primary sources of learning for children. If a household doesn’t place a premium on reading, its children’s exposure to ideas is limited to the parents’ established practices. And if parents won’t teach their children habits for success, the children have virtually no other source from which to learn.
Probably one of the hardest things to change is a culture. Unquestionably American society is self-dividing into two cultures: a rich culture and a poor culture. And unlike many commentators on the subject, I don’t think wealth determines culture; I think culture determines wealth. And there are many ethnic groups in America whose cultures mirror either the rich culture or poor culture. (I just can’t say which ethnic groups belong to which culture because I don’t want to spend an entire week dealing with irate callers who disagree.)
But based on my experiences in the mortgage industry, I have a good idea of who belongs where. I have dealt with cultural groups that seem determined to sabotage their loan process for no apparent reason, like when a husband sabotaged his loan because the whole idea for the loan was the wife’s idea first. That seemed to bother him. I have also dealt with groups that trust mortgage professionals—sometimes rightly and sometimes wrongly—entirely because of that professional’s appearance. They assume anyone with a suit and business card must be trustworthy.
A client’s behavior is a good indicator of their personal financial success. Every decision they make reflects their personal values and preferences and determines whether they are and will continue to be rich or poor.
I focused this week on the divide between rich and poor. Next week in part two, and over the coming months, we’ll explore the divide between the young and old, and timid and bold.