I’ve met a lot of rich (and famous) people over my 25-year career as a money educator. There are the ‘wheeler dealers’ you might guess, like James Packer, Mark Bouris and ‘Aussie’ John Symond, all the way through to the extraordinarily successful ex-surfer Layne Beachley and fashion designer Collette Dinnigan.
This humble finance expert once even partied with U2’s Bono. It was at the London launch of a film made with – here’s where I came in – a tax-deductible investment.
And what I’ve witnessed with all these and more ‘money types’, is that there is a money type. Not all but most people who amass a decent financial stash have five characteristics in common. I think of them as the attributes of affluence.
Wealth trait 1: They have rich parents
This is not so much a trait as a big fat piece of life luck. But being around not just money but the temperament that makes it gets you halfway there. What do you think was the main lesson media mogul Kerry Packer wanted to impart to his children? It sure wasn’t a love of literature.
Even if the younger generation doesn’t inherit a fortune, they often get an inherent financial nouse. The good news is there is also a kind of ‘expertise by osmosis’ from being part of any family where money modelling is good. Observing and learning from someone who’s good with it should see you grow yours too.
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Wealth trait 2: They don’t do anything free
Doing things for no reward is a ‘weakness’ that doesn’t promote wealth. And it’s not something many rich people do – at least not on their way up. It’s a related concept to knowing your worth and being prepared to hold out until you get it. Without mentioning any names, being a bit of a hard arse helps.
Wealth trait 3: They’re tight
US billionaire investor Warren Buffett famously buys older and even hail-damaged cars. And he told Forbes last year that he had no reason to replace his latest 2014 model because he didn’t drive very far.
Contrast that with all the mere money mortals you know who stretch and stress themselves by driving luxury, leased vehicles.
Frugality and value-seeking, in fact, underpin Buffett’s wildly successful investment philosophy. And if you think you’ll get shouted dinner by a well-to-do friend, think again: they’ll have the calculator out before you’ve finished chewing. You don’t build wealth by wasting it.
Wealth trait 4: They’re ballsy
How well you tolerate risk is on a characteristic continuum, like the nervous flyer versus the passenger who wants to parachute out of the plane. Rich people are almost always the jump-out – or jump-in – risk takers. They believe in the opportunity they are pursuing and will often put it all on the line because of that belief.
They are also usually happy to leverage – so borrow – rather than grow a business by bootstrapping: slowly and cautiously.
Seven-time world surfing champion Layne Beachley once told me - when I was editor for AFR Smart Investor - that her best smart-but-ballsy move was to buy her first property ahead of the boom and while she was earning very little. She was on just $20,000 per year when she asked the bank to lend her $144,000 to make her first purchase.
"I saved all my prize money for the deposit and then put every cent into paying it off as soon as possible. That was my stepping stone into the property market, which has given me equity to secure other properties and business interests."
Similarly, television’s host-with-the-most Larry Emdur began parking his earnings in, and gearing into, Sydney property at the beginning of his long and distinguished career. It was a ballsy, conviction move that now sees him with a vast portfolio. He is also THE nicest guy on TV.
Honourable mention to my lovely finance buddy, Paul cl*theroe, here though. While he might be a huge believer in shares, his sensible investment strategy epitomises slow and steady wins the race. But that didn’t stop him – on his aptly named yacht, Balance – winning the 2015 Sydney to Hobart.
Wealth trait 5: They get their hands dirty
Roll up those sleeves if you want to be rolling in it – no one self-made ever did it by being lazy. A good smattering of the traits above, coupled with a huge work ethic, are how you ‘strike’ it rich. You, in fact, strive for it with single-minded determination.
Take Collette Dinnigan for example. She revealed to me that her best business decision was to continue to believe in the luxury market and the brand, instead of initially commercialising it. It was determination at its finest, and it paid off.
As 'Aussie' John Symond responded when I asked him his secret: "If people think there's a shortcut, forget it. When I started, I had no money and no backers but I had a strong passion to make a difference. That was my focus."
What do you think – could you have a more prosperous future?
Nicole Pedersen-McKinnon is the author of How to Get Mortgage-Free Like Me, available atwww.nicolessmartmoney.com. Follow Nicole on Facebook, Twitter and Instagram.
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