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"The rich are different," declared F. Scott Fitzgerald. "Yes," replied Ernest Hemmingway. "They have more money."

Not to dispute with Papa, but what the rich have in general is not more money, but more ways to make money. This is what the financial pundits and others describe as "thinking rich" as opposed to "being rich." The difference is significant.

An elderly lady of my acquaintance, for whom I prepare annual income taxes, considers herself very poor. Adding up the value of her house, her portfolio of investments, and the present value of her Social Security and pension, she is currently worth in excess of $1 million - a realization that actually shocked her when I gave her the results of her annual "wealth census."

The problem is that she doesn't "think rich." She "thinks poor," and behaves accordingly. Of course, part of that sounds like the old joke that, "A million dollars just doesn't buy as much as it used to ..." That, however, is only a small part of the problem, certainly not the largest part.

By "thinking rich" I do not mean engaging in conspicuous consumption or cavorting like the Hollywood crowd. I mean orienting yourself both to spend wisely, but (much more important) earn wisely.

Spending wisely is the easy part. Anyone can understand that if you spend your dollar today, you won't have that dollar tomorrow. This is a simple fact of life. Someone who thinks rich typically spends very carefully, thinking twice about every disbursement, and then often not making it in favor of a more cost-effective alternative.

Spending wisely, however, does not mean not spending at all. It merely means not spending what you don't have. Buying on credit is a deadly trap for consumer goods and services. When you get consumer credit (and all credit cards are "consumer credit"), you are spending income you haven't made yet.

Spending wisely also doesn't mean saving your income for investment. On the surface, that seems like a smart thing to do. You are, however, actually diverting your consumption income and lowering your quality of life instead of making it better. It is impossible in today's economic climate and state of the economy to save enough out of the median wage income to purchase enough capital (income generating assets) to mean much of anything soon enough for it to make a difference.

What do the people who "think rich" do? They do not cut consumption in order to use their own money to grow rich. Very much the contrary! They may use their accumulations to collateralize

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