It’s just like Gene Morris’s song “The Rich Gets Richer and The Poor Gets Poorer, that old saying is true, but what can a poor man do?”
The rich are greedy. They enslave us and don’t pay us enough. The rich should pay a lot more taxes.
How many times have you heard someone complaining using these arguments?
It is true that the rich get richer and the poor get poorer, but why does this happen? Are the complaints justified? Or is it all BS?
Most of the millionaires today aren’t born rich, they don’t come from a healthy family, but for some reason, they made it to the rich status. So what’s the difference?
It starts with the mindset.
Some people focus on looking rich buying things they can’t afford with money they don’t have. A new phone every year (or less), a new cool car just to show off, and a house with extra beds they don’t need, stacking more and more debt. There are families that earn very little money, don’t invest in education books and in consequence, fail to pass good values to the kids. When you buy a car, as soon as it leaves the lot it loses 11% of its value! So if you buy a new $20.000 car after the first few meters of driving the car just lost 2.2k. Outch!
Those that become rich, first of all, believe in themselves. They believe it’s possible and instead of complaining that the boss doesn’t give them enough money, they focus on learning and on how to self-improve. They learn, master a skill and they capitalize on that skill earning more and more money.
But earning much money isn’t enough because at the end of the day what matters is not how much you make, but how much you keep.
By not buying useless stuff early on, saving all the money they can and investing smart, that’s how a poor person can become rich, Morris.
The big difference is what you do with your time and money.
Are you spending time learning?
Are you using your money to buy investments that will make you even more money?
Poor people think that the rich just got rich out of nowhere but what they fail to see is the countless hours and the hard work they put in every day and all the sacrifices they made to accomplish that status.
So instead of that $20.000 brand new car, invest is something that puts money in your pocket instead of leaving them empty. You can invest in stocks, real estate, bonds or cryptocurrencies.
If you buy one share of any company (Apple, Facebook, Google, Tesla, Amazon…) you become one of the owners of that company. You don’t get to tell the direction of the company, but you get the benefits of owning it. the stock market has an average growth of 10% a year. If you invest in real estate you buy a property and you rent it out. Every month you have the house rented, you earn money without actively working on it. It’s called passive income. Real estate value goes up by 9%/year on average. With Bonds, you loan money for companies or the government, then you receive your money back with approximately 5% return. Cryptocurrencies are a special case. Some people view it as gambling. The technology is still recent and companies are still figuring out how to implement and how the people will respond. But you can buy a cryptocurrency like Bitcoin or Ethereum at a certain price and then sell it at a higher value depending on the prices on the market.
I did a post on how Bitcoin and the first cryptocurrencies started and what they’re all about here.
I am going to talk more about investments and how you can start changing your way of managing your finances and start the path to your financial goals.
So make sure you follow the blog and also the social media so you won’t miss anything.