Rich vs. Poor

Jim Rohn was a firm believer in philosophy. Not so much about the philosophy of philosophers, but about personal philosophy and how it affects your wealth and your happiness. He taught that the major difference between the poor and the rich was what their philosophy was about money and wealth.

He said “it all starts with the same amount of money – just a different philosophy”.

A recent article highlighted this aspect of Rohn’s teaching.

“Here is an exciting thought! Why not work full time on your job and part time on your fortune? And what a feeling you’ll have when you can honestly say, “I’m working to become wealthy. I’m not just working to pay my bills.” When you have a wealth plan, you’ll be so motivated that you’ll have a hard time going to bed at night”.

The foundation of Rohn’s wealth philosophy was about how we allocate our money. Here are the fundamentals of that philosophy:

The 70/30 Rule

After taxes learn to live on 70% of your income. This pays for the necessities in life and maybe a few luxuries. He then suggested that you spend the remaining 30% of your income on three things:


Rohn was a big believer in charity. He believed you must give back to the community for those in need. He suggested giving 10% to charity each month, or one third of the 30% you have left over after expenses.

Capital Investment

Rohn taught to use at least 10% of your income (another third of your surplus) for capital investment. This is where wealth is built. This is money spent to invest, fix, manufacture or sell. It is the money you invest to gain income. It is about engaging in commerce in some fashion.

You might invest this money in real estate. You might start a small part time business. People make money doing all sorts of things on the side. With the internet it is easier than ever. You might sell things on internets sites such as, Craigs List, etc.

Or you can start an internet based business selling information, services or goods. The possibilities are endless.


The remaining 10% of your income should go into savings. This is where you set aside money to pay for those unexpected expenses. It may be to buy a new car, to pay for a home repair or an unexpected medical cost. These costs pop up all the time and if you have money set aside for them you can avoid going into debt.

It is simple but it is not easy

Rohn was fond of observing that the philosophy needed to create wealth is relatively simple, but is not always easy. That certainly applies to the suggestions in this article. Most people would find it very challenging to live on only 70% of their after tax income. This is because the most common philosophy we have is to spend all we earn.

Rohn challenged us to change that basic philosophy. It may be a challenge at first, but the only way to build wealth is to spend less than you earn. Once you have adopted that philosophy then it is a matter of putting it into practice.

If living on 70% of your income seems impossible then work up to it. Start out saving 9% of your income after taxes and allocating it three ways as described here: one third to charity, one third to capital investment and one third to savings. Then as you work over time to reduce your spending and increase sources of income you can increase the amounts you spend on these three vital items.

You can begin to learn how to do this by signing up for my free newsletter in the sign up box in the upper right hand corner of this page. You will get a free copy of my little ebook called Creating Wealth which will teach you how to gradually reduce unnecessary spending, eliminate debt and invest more in your future.

Though it may not always be easy to build wealth it pays off well in the long run. Instead of living paycheck to paycheck and dreading that unplanned expense that will plunge you into debt you can change your philosophy about wealth and begin to build it. It will be slow at first, but it will gain momentum.

It will not happen though unless you change. It is that simple.

Read the rest of the Success post here.

Learn how to manage your money, eliminate debt and build wealth in my book, Your Financial Success.

Learn more about Jim Rohn and his teachings on personal development and creating wealth here.

Questions? Comments? I would love to hear from you. Feel free to post your comments or questions below or if you want to contact me privately you can do that here: CONTACT ME HERE.

Wishing you well,

Daniel R. Murphy
Educating people for building wealth, adapting to a changing future and personal development.