How you think about money determines how much value your life will create. The upper class thinks about money differently than the middle and lower class.

Money is nothing but a tool and a resource. The way you handle any resources tells you how meaningful and impactful your life will be because it says what your priorities are.

The special thing about money is it’s one of a few resources (alongside time) you can actually measure. If you’re doing poorly with money, you can track exactly how you’re spending it and critique yourself. If you’re doing well, you can look back at your investments and repeat.

Money is not what life is about, but it does tell you what your life is about.

So if you have not been trustworthy in handling worldly wealth, who will trust you with true riches? 

Luke 16:11, NIV

I’m not trying to turn you into a Bible thumper, I’m trying to show you how old this idea is. The verse above comes after a story about a man acting almost unscrupulously with someone else’s money, and yet Jesus says he’s the winner in the story. 

Your money mindset and your entire life mindset are completely integrated.

The Three Class Mindsets

There are three ways to think about your money.

1. Lower-class thinking: living for pleasure. This is when you’re living paycheck-to-paycheck. No matter how much you earn, the expenses grow with it. “Lifestyle creep” means you’re always spending more with each new job or pay raise. People who win the lottery and are poor two years later think like this.
   
2. Middle-class thinking: living for security. Here you have a little more breathing room. You’ve followed Dave Ramsey’s baby steps, have an emergency fund, are putting money away for your kids’ college, maxing out your 401k and Roth IRA contributions, etc. Yawn. You know the drill.
   
3. Upper-class thinking: living for growth. This is where it gets interesting. If you’re in growth mode, you’re taking aggressive steps which to someone else will look like “risking it all.” You quit your job to start a business. You move to a new country. You liquidate your stock holdings to buy bitcoin.
   
   Once you’re established, and your tack starts to shift. You’re making decisions now to give your children a starting point you didn’t have. You might be an immigrant moving with nothing to a new country so your children can have more opportunity. Or you’re doing financially well, so you’re buying land now that your children can build future homes on. It’s not about you anymore.

Class thinking has nothing to do with how much money you earn, what part of town you live in, or the kind of job you have. There are consultants making $200,000 a year who are lower class because they spend all they have, and there are schoolteachers patiently investing and thinking like the upper class.

Put another way, there are three mindsets by which to live your life. You live for pleasure, you live for security, or you live for growth. 

None of the three are bad. Even if you want to be “upper class” you will still have to use lower and middle mindsets at times. However, these actions do sit in a hierarchy of “good, better, best.”

Lower Class

Taking care of today is wise. You have to take care of today. Did you eat? Shower? Go to work? Living in the moment is necessary. 

It’s only bad if that’s all you do.

If the only thing you care about is today, you’re missing the point. Life is so much richer than only today offers. If you’re never thinking about the moment, you’re missing out.  

Middle Class

Financial security is wise. Like putting on an oxygen mask on an airplane, you can’t take care of anyone else if you’re not secure yourself.

Almost all “personal finance” advice is focused on getting you from lower to middle class (as a reminder, that is not what this blog is about). Control your spending, eliminate debt, grow your savings, get an emergency fund, contribute to your 401k and build walls of security. 

Eventually, your car will break down. You’ll have an unexpected medical bill. Or you’ll see a once-in-a-lifetime investment opportunity (“$GME to the moon!”). Having money set aside for these events is wise. These are expected risks. It’s not selfish to secure your future. In an airplane, they tell you to put your oxygen mask on first so you’re able to help others (and not become a burden yourself). If it’s selfish, it’s selfish altruism. 

For someone living paycheck-to-paycheck, they need this advice. But if you’re already there, and that’s where you stop, you’re missing out on another whole level to life.

Upper Class

Upper class means your priority is growth. You don’t have to be rich to be upper class, but you will probably end up wealthy if you act upper class.

This is the hardest mindset to have because growth is inseparable from pain.

The people you truly respect, whose opinions actually hold water with you, are the ones who have given or created something of real value to the world—whether that’s a parent, artist, startup founder, philanthropist, or politician (eh, maybe not that last one).

None of them made it without pain and risk along the way.

The people you read about in history books are definitionally the ones whose impact outlasted their lives. Even if it wasn’t always monetary, they certainly were thinking beyond themselves to leave a multi-generational legacy. Even the childless in history (like Queen Elizabeth I, Nikola Tesla, Jesus) have some of the strongest legacies today.

What does an upper class lifestyle look like?

Upper class means you spend less than you make and aggressively invest your surplus. Upper-class thinkers are not trying to remain employees. If they are current employees (like me at initial time of writing) then they are seeking to develop outside income, or at least not rely 100% on their job income.

If your employer is your only source of income, you have very little power to negotiate. Want more vacation time? Too bad. Want to take a year off? Good luck.

If you don’t need your employer, you can take as much time off as you want. The power financial independence gives you opens up way more doors than simply being worry-free financially. It allows you to craft a life around your values—not just around keeping your job.

Upper-class thinking tends to have a goal of living off the dividends of your investments. AKA if you invest $1,000,000 into something that gives you back 10% a year, you get $100,000 to live off. The real benefit of this kind of living isn’t as much money, but time. But that’s a whole post to itself.

This almost always happens through starting a business. Less common routes may include a lucky early-stage investment into a business or real estate (e.g. giving you rental income). Even most real-estate-rich I know of own their own realtor business and ended up buying one of the homes themselves as passive income.

The Quintessential Upper-Class Thinker

The archetypal long-sighted individual for me is Mayer Rothschild. In the 1760s, he had the role of managing and lending money to a state in the Holy Roman Empire. There were many individuals that had this role, but what made him different was what he did next. 

Europe was frequently at war, and countries and boundaries shifted with it. Rothschild had five sons, and he sent each of them to a different European financial center (London, Vienna, Paris, etc.) to set up a branch of their bank. He literally diversified his children so that the whole family would succeed if one of these centers took off. While children aren’t mere economic tools, he knew how to turn their actions into assets.

Long story short, London became (and remains) the strongest hub for European finance. The whole family thereby succeeded and maintains their wealth to this day.

How do you move up in your thinking?

Take an honest assessment of where you are. 

• If you’re used to a lower-class mindset, no shame. Start taking practical steps towards the middle class. Eliminate debt, start your savings, and secure your future.
• If you’re living comfortably in the middle class, begin asking yourself what risks do you see that no one else seems to.
• If you’re living with an upper class mindset, proliferate it. Continue to seek growth opportunities. Talk about it with your friends. Teach it to your children as early as possible.

Life is useless without growth. Don’t let it go to waste.