Psychology of People Who Act Poor When They're Rich

I want to say something that might mess with you just a little. If someone looks rich, they're often not the wealthiest person in the room. After 30 plus years of working with people who actually have money, here's the truth. Most millionaires don't look rich on purpose. Not because they can't spend, but because once the money stops being emotional, showing it stops mattering. And today I'm breaking down the real psychology of people who have a million dollar net worth or more. The mental shifts that quietly separate people who earn money from people who actually keep it. I'm Mel Abraham, a CPA entrepreneur, money mentor, someone who's walked this journey himself. And I've watched high earners stay stressed while quiet millionaires live calm with choice. And this, this is Building youg Money Machine, where we help you master your money, eliminate financial stress so you can live a life of choice. Because earning more doesn't make you free, but a money machine does. All right, let's do this. When people hear the phrase millionaire psychology, they picture confidence and success and lifestyle. But literally, after 30 years working with people who have a million dollar or more net worth, here's what surprises most of them. Most of them don't look rich at all. Not because they can't spend, but because their psychology has changed. And today I'm breaking down the real psychology of people with a million dollar net worth or more. Not how they show it, not how they brag about it, but how they think. Once the money stops being emotional and starts being intentional, and once you understand this, you will stop trying to look wealthy and start building something that is far more powerful. Now here's the thing. I want to be really clear who I'm talking about here. I'm not talking about the influencers, I'm not talking about the celebrities. I'm not talking about the crypto lottery winners who got lucky once and loud forever, okay? I'm talking about first generation millionaires. The people that I've worked with, that I've planned with, that I've watched for decades as a cpa, as an advisor, as a coach. The quiet ones, the ones you'd never suspect until you looked at their balance sheet and went, oh, wow, okay, this isn't theory, this is pattern recognition. Okay? Here's the shift that happens when someone crosses a million dollars in their net worth. And I'm going to be upfront. Million dollars isn't a ton, you know, depending on where you live. And I'm talking about a net worth in the sense of without the home. So it's investable net worth. But what happens once they cross? That is money stops being emotional, it stops being the proof that I made it. It stops being identity, it stops being social, something they need to explain. And when money stops being emotional, behavior changes fast. Here's the thing, your ability to build wealth is less about the money and more about the behaviors. And if we can get our behaviors to change fast, we can get ourselves in the game in an effective way. Let me show you what, what's actually going on in their head. Okay? The first psychology that I think we need to think about is that those that hit there and move up, they have money stops being an identity. So that's the first thing, and this is what psychologists would call identity decoupling, if you will. Quiet. Millionaires don't use money to tell the world who they are. They internally already know. So they don't need the car to validate them. They don't need the house to confirm that they've made it. They don't need the lifestyle to feel important. And I've watched this for decades. Now, I'm not saying not to spend, I'm not saying you not to do it, but I'm saying that if it is not in alignment with your values, your vision, your desires that gives you richness in your life, then maybe we need to think it through. Okay? Because the moment your money stops being identity, spending loses urgency. And if I have to show it, I probably don't really have it, quite frankly. Okay. And I live in an area where I see a whole lot of Lambo bros driving down with their loud engines, revving it. So everyone looks at them from the outside. You know, they, they may look successful, but the true millionaires, the true psychology, from the outside it looks like they're restrained, but from the inside, it's indifference, they stay grounded. Okay? Studies have shown conspicuous consumption consistently shows that higher net worth households spend less proportionately on status goods than aspirational earners. Meaning that, that the loudest spenders are usually the ones that have the most fragile financial situation. So as you start to look at things this week, ask yourself once a week, even if nobody saw this purchase, would I still want it? See, that question alone shuts down a lot of expensive nonsense. And again, I'm not saying not to spend it, but if the reason we're spending it is for someone else to see it, then why are we doing it? Okay, that leads me to psychology number two. They optimize for optionality, not image. Okay? This is what psychologists would Call optionality bias. Okay? Everything, every spending decision runs through one filter. Does this increase my freedom or reduce it? Everything I do, every choice I make is how does this impact my lifestyle? They don't ask the question, can I afford it? Do I deserve it? What will people think? But they look at and say, does this lock me in? Does this add obligations? Does this reduce my future choices? This is why quiet millionaires, they delay upgrades, they avoid lifestyle creep, they stay liquid longer than expected. I have a fair amount of liquidity right now. Now part of it is my age and stage, but I want to have flexibility. Okay? And when we're focusing and allowing image to drive our spending decisions, image feels expensive. But options, that feels like calm. And I get it. Nice stuff is great until it starts telling you what you have to do, until it starts telling you who you are. According to the Federal Reserve, households with a million dollar net worth typically carry significantly lower consumer debt than upper middle, middle income households trying to look successful. Now, some of that is the fact that things just got more expensive and they have a higher, higher net worth. So, so that ratio goes down. But by the same token, I hear and watch people that are spending money on things, money they don't have by financing it, just because they want to look a certain way. So the action here is before any major upgrade, ask yourself, if my income dropped by 30%, would I regret this decision? Okay. And if the answer is yes, it's not freedom, it's an anchor. All right, all right. That leads me to psychology number three. They feel safer with liquidity than stuff. From a psychologist's perspective, this is security. Substitution is what they would call it. This one surprises people from an outside. From the outside, cars and houses, they look solid. From the inside, though, they feel fragile. It smacks of maintenance commitments. I just had to pay my property taxes. This is crazy, okay? Ongoing costs that never asked permission, okay? Liquidity feels different. Liquidity feels quiet, it's calm, it's reversible. Stuff can break. Options don't so often. They hold cash, they diversify it, they put it in liquid investments and they allow themselves to do the things that they want to do and have as much flexibility as possible. They stay boring on purpose. From the outside, you might sit back and go, oh, they're cheap, but on the inside they're sleeping well, okay? Research on this whole financial well being shows that perceived security correlates more strongly with liquid reserves than net worth tied up in illiquid assets. Meaning this is that when you follow the wealth priority ladder and we create that unshakable foundation like we do. You have a foundation of security that gives you the comfort so you can sleep at night, so then you can build and do the things. So it's really important for us to, to look at this and the action here is to build a liquidity buffer. That peace of mind fund as I talk about it in the wealth priority ladder to get you. Now I know people say emergency fund three to six months and that's cute, I get it and that's a great place to start. But if you truly want peace of mind like I talk about in my trainings, in my book, I actually want you to start pushing more towards the nine to 18 months at some point in time. That buffer is what makes you feel unrushed. It allows you to, to get things done and to have options and be able to change decisions. That's the key in this one. Now psychology number four though, they look at it and say they exit the comparison game. This from a psychologist perspective would be the social comparison exit is what they would call it. But here's the thing. We live in such a comparison society, it's sad because it affects people's well being and especially our youth and everything. But quiet millionaires, they don't win the comparison game because they don't play it. They quit the game entirely. Okay? I am not sitting back and I live in a nice area. I'm not sitting back looking at the house next door or the car next door or the person. I don't care what they have, I don't care what they do. What I care about is am I living my life true to my dreams, true to my values, true to my vision for my wife, my, my, my son and his wife and my grandd kids and my dogs too, okay? Because that's the thing. They, they literally will quit the, the comparison game entirely. Not because they lost, but because they realized the prize was just stupid. Okay? Keeping up with people you don't know, buying things you don't need to impress people that aren't paying your bills. Yeah, the math stopped mathing. They don't explain themselves, they don't defend their choices, they don't correct their assumptions. They let them let everyone else think whatever they want. And that's not apathy, that's peace. When you look at behavioral finance, you know that research and social comparison is one of the strongest predictors of overspending. And in. So this is the thing that I think we need to really start to pull the reins in on. So One of the things that I tell people to do here is to unfollow one account a week or this week that makes you feel like you're behind. If you're looking at someone's account and, and it is not inspiring you, but it is stressing you because you feel behind, that's not motivation, okay? That's pressure. And so if you're feeling that, then block it out, unfollow it. Don't get caught in the game, all right? And look, I'm not one to say, well, you know, I never got caught in the game. Trust me, I lived by comparison for a while, but it made me put me in debt, it made me miserable because I couldn't figure out, well, I got it, but it doesn't feel good. And sometimes we have to learn the lesson the hard way. But I'm hoping that this will open up your mind to look at it differently and saying, hey, even though they got it, even though the media says to get it, even though social media is putting it out there, the question is, do you want it? Does it really matter to you? The fifth psychology hears, they see spending as permanent. And this is from a psychologist standpoint, it's called the irreversibility awareness. Okay, quiet millionaires. They don't see purchases as momentary, momentary pleasures or things like that. They see them as future obligations. They see them as ongoing costs. They see them as reduced flexibility. And so when they look at it, it's almost like every upgrade could become an anchor. And so it has to be something that's in line with what they want. And so when they spend, it's typically slow, it's intentional, it's almost boring. And they're not asking, hey, is this nice? They're asking, am I okay owning this forever? There's plenty of times that I think about buying something and I put it in a cart and I leave it and I use a 72 hour rule. And, and after 72 hours, if the emotions have dissipated or I don't see the reason for it and it's driven by comparison or status or what it might look like, yeah, I delete it. I don't do it. And so I think it's important for us to start looking at it through those eyes. And so your action here is before upgrading, you gotta ask yourself this question, would I still want this if nothing else changed in my life? If that doesn't affect anything else, and if the answer to that question is no, then wait and don't spend it, just let it go. That leads Me to psychology number six, they're comfortable being misunderstood. This was something I struggled with. And in the psychology realm, this would be a low need for external validation. But I struggled with this because I wanted to be understood. I wanted to be liked. I wanted to be one of the in. And it's big because quiet millionaires, they don't worry about correcting the narrative. They don't say, well, actually, I could afford that. They're not trying to justify it or validate it. They don't say, well, you don't know my situation. They don't say things like, oh, let me explain, and let me tell you, one of the most challenging places to do this is with your own family. And I know that there are folks in my family that look at the way we live and the way we travel and they wonder, you know, am I in debt? Am I? But it's none of their business, honestly. And I don't need their validation. I just need to know that I'm living true to my values, true to my morals, true to my ideals, doing the things that I want that Stephanie wants and making a difference and being as generous as possible. Okay, and then you got to ask the other question. That is this is that if they knew, would they treat me differently? And if they would, then I don't want that. I am who I am. People have met me when I'm on stage, off stage, out in the street. I am who I am. This is what you get, all right? And I'm not trying to put on an image or a facade. And most quiet millionaires, most people that have this psychology, that's what they're doing, they blend in. From the outside, they just look ordinary. In fact, we talk about Laguna beach as. As you have billionaires in board shorts here, people just walk around in board shorts and T shirts. You would never know that they're billionaires, millionaires. And they're the most down to earth people, okay? But from the inside, they're untouchable. They're not moved by someone else, by this validation, this need for validation, because it's internally validated. And that comfort, that comfort may be expensive to build, but it's priceless once you have it. So if it comes down to it, where people are asking you things and say, here's the action here, you have no obligation to explain your financial choices to anyone. That silence, that's your muscle. That silence, that's your power. And it's up to you. You may want to explain it, you may not. Now, I am completely transparent with my wife and my family, or my close family, the heirs and all that stuff, my son and all that stuff. But when it comes to other people, yeah, our financial situation is our financial situation. I'm not here to explain my choices that maybe I took a first class flight or I decided to fly private or I drive this kind of. I don't have to justify it. I don't need their validation, I don't need their approval. I just need to know that I'm doing the things that are true to me. Okay, so here's the thing. And this is the part that I think most people miss. Quiet. Millionaires don't live this way to become wealthy. They live this way because wealth changed what matters to them. Money stopped being emotional, status stopped being attractive. Freedom became the priority. That's the psychological shift. Okay, so yes, this is the psychology of people who have a million dollar net worth or more. Not how they got there, but how they think once the money stops being the loudest voice in the room. And that's why they don't look rich, they don't need to see. And that's the thing that I think is important. Now, one of the reasons that people stay grounded is simple. They know exactly what their lifestyle costs. Not guesses, not vibes. They know the numbers. And if you want the same type of clarity, grab my lifestyle cost calculator. It's totally free. You can go to melabraham.com lifestyle and you can grab it. It's not to restrict your life, it's to design it intentionally so you're not swayed by status, emotion and peers comparison, all that stuff. Because when you know what freedom actually costs, you stop overspending for things that, that don't buy it and you start moving towards that. See, real wealth, it doesn't announce itself. It opts out. And once you understand that, you stop trying to look rich and you start building something far better. And that's freedom, that's choice, that's options in your life. And that I think we all deserve. All right, I hope that this helps. I hope that this gives you an indication or some things of what's going on in the mind of those that have moved beyond the million dollar mark and what we might need to do to shift some of the things in your mind or our minds to be there and to be there with a level of peace, a level of confidence, a level of joy and a level of calm that allow you to grow even faster. I believe to the core of my being that financial freedom is a birthright. I want to light the path for a million families to get there and I want one of them to be you. So I hope that this hits home. I hope that this gets you to start thinking differently. I hope that it also gets you to do differently. I'd love to hear from you. Which one of these psychologies hit you the hardest or got or surprised you? Just drop it in. Drop me a DM or drop it in the comments below, let me know. And if you have questions along the way, do me a favor, ping me. I'm here to help. I'm here to guide. I'm here to help guide you towards that financial freedom. All right. Until I get a chance to see you in another one or on the road in the path to your financial freedom. As I always say, always, always strive to live a life that outlives you. See you in the next one. Cheers. For now.