Mar 20, 2024
It’s no secret that many people aspire to be ‘rich.’ But what exactly does it mean to be a high-net-worth individual? According to finance author Morgan Housel, being wealthy — much like beauty — is in the eye of the beholder.
“There’s no such thing as an objective measure of wealth,” he told Lewis Howes, host of The School of Greatness podcast on an episode. Housel is the best-selling author of The Psychology of Money and Same as Ever: A Guide to What Never Changes.
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To illustrate his point, Housel paraphrased a joke by comedian Chris Rock: if Bill Gates woke up with Oprah’s money, he’d jump out the window. “Because who is a billionaire comparing himself to? Other billionaires,” Housel said.
According to Forbes’ 2023 world’s billionaires list, Gates has a net worth of $104 billion, placing him at No. 6 on the list of more than 2,000 names.
As a result, he’d be more likely to compare himself to an Elon Musk or Mark Zuckerberg than an Oprah Winfrey, whose net worth is, by comparison, a mere $2.5 billion (No. 1,217 in the world).
But how does one end up on such an exclusive list? According to Housel, there are three traits that can lead a person toward billionaire status. Do you have them?
3 traits that can make people rich
Housel broke down the three traits that can make people rich. And the first, he admitted, may sound like a cop-out.
1. Luck
Some of us are just lucky, some of us aren’t. That isn’t to say people with extreme wealth aren’t smart or hardworking, Housel said, but luck — and being born at the right time in the right place — plays a significant role.
“Are we going to pretend that if Steve Jobs was born in Cameroon in 1650 he would have been as successful? Of course not.” Success, rather, is when “luck and an incredible amount of scale meet at the same time.”
There are a lot of people in the world “who are just as creative as Steve Jobs, just as driven as Bill Gates, just as motivated as Mark Zuckerberg,” Housel said. “But if they don’t meet some incredible stroke of luck in their life, they’re going to have a middling level of success.”
2. Endurance
One reason people stay broke or struggle financially is “short-termism.” In other words, they just don’t stick it out long enough to reap the benefits of their hard work.
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Housel pointed to MrBeast (aka. Stephen Jimmy Donaldson, a YouTube personality), who doled out the same advice to aspiring YouTube stars: go make 100 videos and then they could talk. And, “99 of those people will give up before they make 100 videos,” Housel said.
The antidote to short-termism is endurance. “It comes down to whether you have the endurance — if not stubbornness — to keep it going in any business endeavor,” he added.
That goes for investing, as well. If you’re an investor, you’re paid to put up with uncertainty, since most people will “cry uncle sooner than they thought.”
3. A high tolerance for pain
Those who are successful not only have the endurance to wait out tough times, they also have the ability to withstand “pain,” which could mean different things to different people.
When former president Barack Obama met the Navy SEALs who took down Osama bin Laden, he “was stunned at how ordinary they looked,” Housel said. Half of them looked like they could have been high-school principals, he added, but “their tolerance for pain was off the charts.”
A high tolerance for pain doesn’t mean you have to be able to do 100 push-ups with perfect form in two minutes like a Navy SEAL. For Housel, as a writer, withstanding pain meant being able to handle the possibility of failure and coming up against criticism.
“People are going to tell you every day… how dumb you are, how bad of a writer you are, and you’ve just got to bite your lip and endure it.”
How to stay rich
Housel’s personal financial success is a culmination of these three traits: a mix of endurance, a high tolerance for pain, sprinkled with a dose of luck.
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Before writing an internationally best-selling book, he wrote more than 3,500 blog posts over the course of 17 years, and “of those 3,500 I think 3,000 of them sucked,” he said.
While the aforementioned traits can help you get accumulate wealth, it also takes a certain type of personality to stay rich. We’ve heard of athletes going bankrupt shortly after retirement or lottery winners losing all their money within a few years.
“If Bill Gates or Elon Musk or Mark Zuckerberg… inherited a billion dollars at age 18, it would have not slowed them down at all — they were so ambitious, irrespective of money,” Housel said. “But if I [had] inherited a billion dollars at 18, I’d be a disaster.”
Most people need to be motivated “by the fear of not making it.”
But they also need to stay rich by learning how to maintain and grow their money. After all, as Housel added, “getting rich and staying rich are two completely different skills.”
Vawn Himmelsbach is a veteran journalist who has been covering tech, business, finance and travel for the past three decades. Her work has been featured in publications such as The Globe and Mail, Toronto Star, National Post, Metro News, Canadian Geographic, Zoomer, CAA Magazine, Travelweek, Explore Magazine, Flare and Consumer Reports, to name a few.
