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Building Wealth: What Key Practices Separate Millionaires From the Middle Class?

Dave Van Horn
4 min read
Building Wealth: What Key Practices Separate Millionaires From the Middle Class?

Last Friday, my business coach invited me to the Union League in Philadelphia to hear Lewis Schiff speak. Lewis is an author, as well as the Executive Director of INC Business Owners Counsel, and he’s very fortunate because he gets to interview and hang with billionaires and ultra-successful entrepreneurs all day.

His talk was right up my alley, as he was discussing that our beliefs about how wealth is created are really in conflict with our reality. He shared the results of a national survey of middle class workers and self-made millionaires, which showed us how some of the most commonly held beliefs don’t jive with how the self-made folks really create their wealth.

Related: Why Never Taking ‘No’ For an Answer Will Make You Wealthy

I was able to connect with his description, as I started out with a lower than middle class income. Looking back, I know that a lot of what I believed back then wasn’t quite right, such as income being the main factor for building wealth.

In his book Business Brilliant, he actually discusses the seven best practices that lead to wealth, and some of these are pretty obvious, like having a coach.

Even billionaires have coaches. Professional athletes do too. So, why not you?

But on this bright early morning, Lewis was only going to discuss four of these best practices, and he used an acronym: LEAP.

  1. Learn – learn what you do best.
  2. Earn – earn money by doing what you do best.
  3. Assistance – find assistance with everything else.
  4. Persistence – have persistence to overcome adversity.

If you are like me, you’re thinking that’s pretty simple, right? Not so fast…

Let’s look at some of his data from the survey for each one. Keep in mind, the survey was taken from the middle class (average income of $50,000/year), millionaires ($1-10 million & self-made), high net worth individuals ($10-$30 million), and ultra-high net worth individuals ($30 million+). His first question was…

Do you know what you’re exceptionally good at?

He actually asked us all to answer the question. I came up with one or two things, listing “sales” as my primary skill. As I waited for others to finish writing down their answer, I felt uneasy that I hadn’t listed more.

Then he revealed to us that in the original survey, only 55% of the middle class group actually knew what they were good at, and others would often list several things; whereas the ultra-high net worth folks would mostly just list one or maybe two things.

Lewis disagreed with the old saying, “Do what you love and the money will come.” He says that with the super wealthy, it’s more common to say, “Do what you love and follow the money.” There is a subtle difference.

Here’s another question:

Do you want to get better at tasks that you are not exceptionally good at?

How many times do our parents try to get us a tutor for a failing subject, or get us to play a sport we really don’t like?

Lewis said that the ultra-high net worth don’t ask people to be good at things they’re not good at. Instead, they believe in focusing on what you do best, and then hiring the smartest people you can find for everything else. In fact, they believed that you should devalue technical knowledge for yourself, spending as little time as possible putting out fires, and adjusting your focus to only the most important tasks at hand.

This is something my partners and I have had at the forefront of our plans for PPR. We aim to be the dumbest people in the room.

The next question was…

How do you make money?

This is pretty straightforward. Seventy-six percent of the middle class group answered that they made money through employment. At the other extreme, 96% of the ultra-high net worth group answered that they made their money through business equity. This could be pretty eye-opening for some folks, especially if they only focus on getting a better and better job.

Assistance: Create your own luck

If you really think about it, we’re really not taught to focus, to be owners, and to network with people we don’t know. Most of the middle class where I come from believe that you need to know things (for example, be highly educated) — whereas the wealthy know that you really just need a robust network. Then you can start to find luck in that network.

I completely agree that creating your own luck isn’t necessarily something you do alone.

When I think about when I first started out in real estate, I hadn’t joined any groups and was trying to find deals on my own. Once I started attending DIG (Diversified Investment Group) meetings, and then later after I started a Real Estate Investing Group (RING), I met so many people and learned so many unique strategies along the way, from investing to raising capital. I actually first became interested in investing in notes after I interviewed a featured speaker in the notes business at one of our RING meetings. Now I’m the president of a growing note company, and when we hire and when we build business relationships, we always keep in mind that you’re only as good as your people.

Related: Slow & Steady Wealth Building: A Case for Holding Long Term Rentals

Persistence: Have faith in failure

When asked what they did after a significant career setback, most of the middle class group said that they just gave up, whereas the ultra-high net worth went right back and tried again. Unfortunately for the middle class, their beliefs are really not a good environment for success.

While we might feel shame in failure, the ultra-high net worth folks have a high percentage of associates who’ve failed before around them. They tend to share and celebrate their failures.

This probably explains why I had to struggle most of my life until I began to change my belief system. For me, my failures taught me what I was good at over time.

Now, since my partners and I are in the middle of implementing a huge project at PPR, which should enable us to really grow and expand in the future, this timely information was just what the doctor ordered, and it was very validating for me.

So, if you’re thinking about taking your business to the next level, what limiting beliefs are holding you back? And, more importantly, are you and your coach ready to make the LEAP?

Leave your comments below!

Note By BiggerPockets: These are opinions written by the author and do not necessarily represent the opinions of BiggerPockets.