Andrew Mirams (AM): Hi. Joining me today is Michael Yardney. Micheal is the Director of Metropol Properties Strategists and one of Australia’s leading property experts. Thanks for joining me Michael.

Michael Yardney (MY): Thanks for having me Andrew.

AM: My pleasure. I want to talk to you a little bit about a recent article you published. The subject is why the rich think very differently to the poor, which, I think, is going to be a really confronting issue for a lot of people out there to listen to, but I hope they find it really interesting. Talk to me a little bit about the psychology.

MY: It’s interesting that you say it’s confronting. I think, a lot people like to blame their job, their education, their parents, the government, why life isn’t being fair to them when in fact it probably has a little bit to do with what’s happening to the outside world, but it really has a lot more to do with what’s happening  in your inside world and you.

The first time I read about this was in a book, written close to a century ago, by Wallace Wattles in his book The Science of Getting Rich, when he said “Your thoughts lead to your feelings, your feelings lead to your actions, your actions lead to your results”. What’s going on in your head, the inside world, definitely affects your outside world. I think, the article you referred to was based on a book written by Thomas Corley, an American, who spent five years studying the beliefs of the wealthy and the poor. Again, this is not a judgement of people.

You and I, Andrew, know that to be truly wealthy hasn’t got anything to do with how many properties you’ve got or how much money you’ve got. You need to have your health, you need to have your friends and family, and you need to have time to appreciate all those.  If you talk money wise, what he was saying was the rich think very, very differently to the poor and it is their beliefs that, I guess, create the outside world.

AM: Well, let me throw up the first chestnut that, I think, everyone has been taught and told through the journey; work hard, grow up, go to uni(versity), get a good education and work really hard and things will look after itself, Michael.

MY: That’s a good one because that’s what my parents taught me as well.

AM: I think, probably most of our parents.

MY: At every seminar I bring this up and mention it to people and say ‘ hands up those who work really, really hard’ and most people put their hands up. I say ‘hands up if you’re a multi millionaire?’ and they, sort of, all put down their hand and giggle a bit. Hard work doesn’t work.

Andrew the world isn’t fair, it’s not right and so different people get on differently. Again, it does come back to more the way they think, the way they believe because in your brain you’ve got this thing called a reticular activating system. It’s the bit of your brain that actually filters out all the data and it actually keep you focused on things.

It’s a bit like the search engine in your mind, if you typed in wealth you actually have different websites coming up in Google, the same as if you typed in poverty. It’s much the same if your mind filters for certain things, through your reticular activating system. Because of your thoughts, because of your self thought, because of that little self talk that you have, you’re actually going to find different things in the outside world.

AM: I think a great example for that, because we hear this all the time, is when there’s someone looking to buy a car and they’ve never seen this car on the road and all of sudden they tune themselves to this little red BMW and guess what? Everywhere they turn, what do they see? A little red BMW everywhere.

MY: That’s your reticular activating system. Exactly right. Exactly right. You suddenly buy a fridge and you see all the ads (advertisements) of the fridges on TV (television), you see all the ads in the papers for that. That’s your reticular activating system focussing on your prominent thoughts and that is the reason why the wealthy keep getting wealthier.

Because of what they think, because of what they believe and that’s what this article was about. That programming as a child, the things you heard, the things you saw, the things you experienced, has actually conditioned you to think in a particular way. Not your fault. It’s what you experienced as a child with the intuition, the knowledge, the thought process that you had as a child.

AM: And all our parents because guess who taught them?

MY: Your parents who were taught by their parents. They had the best intentions but most of us, I don’t know about you, but my parents were not wealthy and that really means that they had the best intention but we were taught by unwealthy people.

AM: Yeah. Just before lead into statistics, I know away at your seminars you often talk about that if all the wealth was distributed evenly around the world, to everyone, where would it end up?

MY: I think, it would be back in the same proportions again four or five years later because of the way your mind set is set, your wealth operating system, the thermostat. Think about thermostats set individually for different levels.

You look at people like Donald Trump who lost it all but got it back again. His thermostat is set at billions. If he was a millionaire, he’d feel poor. When he lost it all he got it all back. But other people whose thermostat is set low, Andrew, when they win the lottery or when they get in inheritance five years later it’s all gone.

AM: Yeah. It’s very interesting isn’t it? Let’s talk about some of the more interesting statistics, I guess, which we’ve sort of talk about the way think and believe. Let’s talk about the wealth cycle and maybe the difference between what a rich person believes to what a poor person believes. Tell me, must I be intellectually gifted, Michael to become wealthy?

MY: Wealthy people recognise that it has nothing to do with you intellect to become wealthy and we see that in the recent BRW Rich 200 List. A lot people didn’t have a tertiary education, in fact, many people in the BRW Rich 200 List didn’t even finish secondary school. But the poor people, I guess they feel comforted by an excuse, by believing in their minds that, in fact the studies show that 87% of poor people thought you had be intellectually gifted to become wealthy.

AM: What percentage of that are rich people?

MY: With rich people that’s not the case. Only 5% to 10% of rich people thought that was the case. They recognise that it has nothing to do with your intellect.

AM: Okay then. Clearly then there’s either fate or your born into wealth. Is that right?

MY: Again, the poor people believe that its fate, its luck. The wealthy recognise that it nothing to do with luck. The harder you work the more efficiently you work rather than maybe the harder you work, Andrew, the luckier you become.  They don’t believe in luck or success, they recognise that it really has to do with knowing the financial systems, becoming financially fluent, knowing what to do and becoming an expert at something, working hard. This concept of, The Secret type concept, where you think about good thing and they’re going to happen, it doesn’t work, does it Andrew?

AM: No it doesn’t and I think you’ve got a great example that you talk about.

MY: I often say that if what you think about most is what you become then Harrison, my youngest son, would end up becoming a female.

AM: I have a 20 year old son who probably would be too. That’s right. I found some of the statistics here and I want to read one out because I find this quite staggering. I guess it’s again, the mentality or the mind set between rich and poor, but poor actually believe that lying or 77% of poor people believe lying is a prerequisite of accumulating wealth. That’s staggering isn’t it?

MY: That’s interesting and the reasons that they believe that is, remember the expressions ‘dirty rich, filthy money’? They believe that you have to lie, steal, cheat, rape, pillage to become wealthy when that’s not the case.  In fact, you’ve spent a couple of years with us at wealth retreat when you’ve seen that the wealthy people there are very much into contribution, giving back to the community, have actually got very, very strong ethics. You and clients who are at that level of having your financial independence, but the wealthy, I guess, they recognise that, while the poor think that there must be some other way that I don’t know about …

AM: There’s a trick.

MY: …so they must actually…that’s right, there’s dirty tricks behind it. It’s not the case, your right.

AM: It’s fair to say, that most of our rich people are the greatest philanthropists in the world and do more for our, probably, the greater communities etc. because they can, I guess.

MY: They can. In fact, they probably think it’s their obligation to.

AM: I think that’s fantastic. Apparently if you’re optimistic, that you’re guaranteed to be successful but poor people don’t really think that way, do they?

MY: I guess it’s the old story, is the glass half full or the glass half empty? In your reticular activated system, if you’re actually looking for good things you’re going to find them but if you’re looking for reasons why it doesn’t work all you’re going to find is those as well.

AM: There also seems to be a bit of a victim mentality to the poor versus the rich way of thinking because when we look at it 82%, the author found 82% of the poor believe that their not responsible for their problems.

MY: No their not, it’s the government, it’s the taxes, it’s the education system, it’s The system. Not my fault Andrew. Why? Because it is actually hard to accept that it’s your fault and can I tell you, it took half my life reading the first half of my life to recognise that I’m actually responsible for everything that happens to me, both the good and bad because of the things I’ve chosen to do and things I’ve chosen not to do.  When I stopped blaming others and took responsibility it took me to a whole new level, Andrew.

AM: I think that’s a great lesson. That’s a Michael Yardney lesson and it’s one I’ve actually known for the last couple of years, that I’ve actually really taken on board as well. I think, anyone you are the victim of your own success or failures aren’t you?

MY: That’s right.

AM: Because it’s interesting that 79% of rich people also then know that they’re the cause of their financial situation. So, that’s very contrary to the poor.

MY: The exact opposite, isn’t it?

AM: The exact opposite, very much so. Tell me something else that you’ve found quite staggering in amongst those statistics because they are, they’re really chalk and cheese, aren’t they?

MY: I think the poor people believe that the rich are rich because their parents were rich or they inherited money. Again, it can’t be the fact that people have been successful. But again, look at the BRW Rich 200 List, even amongst yours and my clients, you find that most of the people who are wealthy are self made. Now you’re never a self made millionaire on your own, you do it because you’ve got a good team of people around you, because you’ve got good consultants around you, but their first generation wealth is not because they’ve inherited it.

Even in the Rich 200 List, a small group of people inherited it but many were migrants. I know you and I have a number of migrant customers in common that have come from overseas, Vietnam, with nothing, with just their shirt and they’ve made it. You’re not wealthy because you’ve inherited it, which is what most poor people think. In fact, you’ll often find that the next generation spends it the third generation loses it all, so not necessarily the case.

AM: I think it’s interesting. I’m a bit of a Packer fan, of Kerry and etc. Frank Packer did well but Kerry wanted to have his own legacy, didn’t he? And now similarly James Packer’s making his own legacy. Sure, they’ve got a balance to start with but it’s just zeros to them. It’s actually having some legacy or something they’re renowned for.

MY: Very much so and when people read about that or the rich families they say they’re only rich because they’re family, and that’s true. But, interestingly they’ll probably remain rich and take it to the next level because of their thoughts, because of their beliefs. Andrew, it’s probably because of the conversations around the kitchen table, which were very different around yours and my family’s kitchen table when we grew up, people were having difficulty making the budget meet.

AM: Sure.

MY: That’s part of the reason rich keep getting richer because their programmed to by their parents. But Andrew, I think, the really, really important point is you can change you programming, you can change these internal beliefs because a lot of these things are things you’ve heard, saw and experienced when you were a child, which are no longer relevant today.

You can’t just do it by affirmations; you can’t do it by feeling good or thinking good or visualising. You actually have to have exercises and training. First of all, recognise your limiting beliefs; replace them with more empowering beliefs. I believe a really important way to do that is have mentors and coaches, whether they’re business coaches, personal trainers, real estate coaches on your side to see your blind spots, to make you accountable, to inspire you.

AM: I think that’s a great point and we won’t go into any more statistics. The bloggers on your property update, people can go and read your statistical data. But, I think it’s interesting that’s not a stat(istic) that’s in there. Rich people or people who think differently, they also spend a lot of money on themselves, don’t they with business coaches and mentors? I know you do personally.

MY: You see that in sport as well. Why do Tiger Woods or tennis players or the cricketers or footballers all have a coach? Because they know they’ve got to invest in themselves to get to the next level, so you’re 100% right. You have a business coach, I have a business coach and I spend a large amount on that on purpose because it’s taken me to the next level.

AM: Michael has proven to be a great mentor of mine as well and Michael also has his very own mentorship program that people can actually sign up to. If you don’t know where to turn or you’re really looking to get started, I would strongly recommend that you go on to Michaels website, which is MichaelYardney.com.au and you look up information on there, of his mentorship program.

If you don’t know where to start or you don’t have one, I think this is an absolutely brilliant program. I’m midway through doing it myself.  Again, I’ve obviously got a friendship with Michael, who I can lean on at times and I also have a business coach. I think that, successful people, not the rich or the poor, but successful people all have other mentors and people they can rely on.

MY: This has to do with success in personal, success in business, entrepreneurs not just property investors. I’ve ran my mentorship program for nine years now Andrew, and I’m very, very proud of the result that people have achieved.

AM: There’s some great information from Michael Yardney and some psychology on the differences between how the rich and the poor think. Thanks Michael.

MY:  My pleasure. Thanks for having me.