Wealth Mindset vs. Poverty Mindset & How Can You Develop a Wealth Mentality?

By Myles Leva


Last Updated: November 16, 2023


Wealth and poverty are a mix of work ethic, intelligence, chance, and much more. However, since Robert Kiyosaki’s hit book “Rich Dad Poor Dad”, a lot of attention has been paid to the “wealth mentality” and its dreaded counterpart, the “poverty mentality”, or “rich mindset” vs “poor mindset”.

In this article, we will focus on financial mentalities and make sense of these concepts.


What Causes Wealth and Poverty?

Wealth and poverty are complex issues. When it comes to poverty, in particular, there are many factors that are simply beyond individual decision-making. That’s true regardless of where you are studying poverty.

Wealth, on the other hand, requires deliberate action to be built up. Apart from getting an inheritance, wealth is typically built up over time, with some level of hard work, but always with a sense of mission.

If you’re wondering how this works and the “rich mindset” purported to promote wealth growth, read on.


Can I Control My Financial Future?

To some extent, the answer is always yes. However, there are several factors that might exist in your current financial reality that can hinder that process:

  • Too much debt
  • Inability to earn an adequate income (disabilities, injuries, etc.)
  • Dependent financial responsibilities
  • Many other factors

However, if you are in a position to earn a middle-class income and aren’t bogged down by debt or other financial stresses, you are already a candidate for becoming a millionaire.

So, what does it take to embrace a “wealth mentality” and start getting rich?

According to Tom Corley’s research, there are a few key things most millionaires share in common:

  • Coming from a middle-class income and either:

Earning a six-figure salary relatively early in your career or living very frugally.

  • Maintaining a low cost of living and saving instead of spending lavishly
  • Saving at least 20% of their income
  • Beginning to invest and save early in life and continuing to do so (pay close attention to this one, this is a key component of “wealth mindset”.)


What is a Poverty Mindset?

The “poverty mindset” describes the set of attitudes and beliefs that keep those who could potentially become rich in the middle or lower classes.

The poverty mentality is essentially defined by pessimism, which in turn is caused by fear and non-prudent decision-making. One of the worst ways this can be manifested is by rationalizing poor financial decisions.

For example, “Why should I invest now? It’s not like I’ll get rich. I might as well make sure I just enjoy my life and live in the moment.”

Most people will not get rich. But that is no reason to ignore, tested, practical financial logic. You will probably not become the next Warren Buffett. So what? That is no reason to spend lavishly, not work hard, not save money, and not invest.


What is a Wealth Mindset?

The wealth mentality describes the opposite of the poverty mentality. It is defined by optimism and prudent, wise financial decision-making.

If you subscribe to the “wealth mentality”, you:

  • Believe you will one day be wealthy due to your hard work and sound financial decisions
  • Understand that you will need to make the effort to save and then invest
  • Appreciate the power of compounding interest
  • Believe that improving your financial standing is the right thing to do and that it’s possible
  • Want to test yourself and see what you’re made of

Having a “wealth mindset” does not mean believing in fairy tales or stroking your ego with unearned optimism. It’s quite the opposite, actually. It simply means that you believe in:

  • The potential to improve your financial standing
  • Taking a tested, practical approach to building wealth
  • Self-discipline
  • Delayed gratification

In real terms, to subscribe to the “wealth mentality” is a completely practical pursuit. Of course, the world will put many roadblocks in your way and building wealth will be extraordinarily challenging in some ways.

But with hard work and respect for financially sound decision-making, you will at least do the best you can and build far more wealth than you would have been able to if you subscribed to the poverty mentality.


How Do You Escape the Poverty Mentality?

It is important to see the poverty mindset for what it is: a mindset. So, the first step is to change your mindset.

A study by Fidelity Investments found that 86% of all millionaires are self-made. The research we’ve mentioned above, while covering a different angle, supports this conclusion. There is plenty of other research to suggest the same key facts:

  • Most millionaires weren’t born rich
  • Sound financial decision-making won’t make everyone rich, but it will always be better than the alternative
  • Financial discipline (saving and investing) is a key facet of wealth generation, no matter what your starting point is
  • Budgeting to save and invest is necessary for most people who want to build wealth

So, how do you actually escape the poverty mindset?

Follow a step-by-step process:

  1. Educate yourself about personal finance, including:
  2. How credit works
  3. Investing with minimal risk
  4. Practical budgeting to save money
  5. Taxes and tax strategy
  6. In many cases, entrepreneurship
  7. Change your mindset towards money, recognize it as a means to an end
  8. Get help, leverage community resources
  9. Avoid bad debt, especially predatory payday lending
  10. Surround yourself with positive, prudent people
  11. Remove negative, pessimistic, lazy forces from your life

Use These 3 Smart Strategies For Building Good Credit


How do you develop a wealth mentality?

Shifting your mindset will often involve shifting your environment. Most of the steps of escaping a poverty mentality will naturally help you build a wealth mentality. However, you should work to complete the process of shifting your mindset with positive reinforcement.

So, after you’ve started to escape the poverty mentality, start to:

  • Follow newspapers, podcasts, and other media from successful people
  • Read books that reinforce the wealth mentality and help you build better financial habits and outlooks
  • Reinforce existing financial knowledge with more in-depth materials
  • Continue to surround yourself with like-minded people who encourage you to succeed

Your mentality will be built over time by the environment around you. If your world is full of optimism, hard work, and a proactive mentality, you should be less likely to falter.




Mentality isn’t everything when it comes to money. However, mentality can easily make the difference between achieving something approaching your dream financial life and the much more difficult alternatives.

Embracing a “wealth mentality” isn’t a course of action. However, wealth mentalities are based on a belief in a certain list of behaviors and strategies.

The fact that those include aggressive saving and investing, frugality, and maximizing your income, should come as no surprise. At the very least, aiming for a rich mindset can help you improve your financial situation over time.

Photo by Pixabay




6 comments on “Wealth Mindset vs. Poverty Mindset & How Can You Develop a Wealth Mentality?”

  1. Please continue to provide such lessons in building positive Mindset/Financial Awareness, etc in addition to the daily motivation and affirmation quotes.

    Thank you though for the lessons learnt. Much appreciated.

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