If we were in the perfect world, we would all be equal. Although, that's not how it works because we live in a very mess up world full of greed and sorrow. As we all know, some people are born in dysfunctional families, low-income families, while the few were born with a silver spoon in their mouth.
For those born in families that are not wealthy or powerful, we have to create our path to wealth or power—however, this article focuses on why rich people keep getting wealthier while the poor get poorer.
Here are some of the reasons why rich people get richer and poor people to get poorer.
1. Leverage
Leverage is when you do more by doing less. Most people don't understand the power of leveraging their money and time, while the few have mastered the art of leverage. It doesn't matter if you are an employee or employer; you will never get ahead if you don't learn how to leverage your time and money.
Wealthy individuals: This group of people is well informed about how leveraging makes their life easier. For Example, let's say you have a restaurant and have been working 10 hours a day. Few months down the road, God blesses your business, and you have more customers than before. Since you can't be a chef and waiter simultaneously, you will hire, let's say, ten people to handle the volume of customers. In this case, you are working 10 hours a day plus 10 hours of the ten employees which means you are technically working 110 hours a day. If you do the math, you will find out that the restaurant owner is making more money than if she/he wouldn't have leveraged her time and money.
The poor: The idea of leveraging their time and money doesn't make sense because they believe that it is cheaper to do it themselves than hiring somebody who can make their lives a lot easier.
For instance, a poor person would buy unhealthy food so he can save $2. Although, he forgets that he will pay more on the hospital bill because he wanted to save $2 every time he shops.
2. Networking
The old says that you are the average of 5 people you spend time with. This saying is true because if you hang around poor people, you have a high chance of being poor.
Wealthy Individuals: These people spend time with people with minds like. In reality, people can't get information from a tiny air. They have to come from someone, so wealthy people spend time with people who can help them improve
.
For Example, if you want to date a rich guy or girl, you have to surround yourself with wealthy individuals. If you want to be with people who like to read, you have to spend your time in the library or join reading clubs. Networking is not just for people who want to be wealthy because you can also network to meet people in your professional field and more.
Regular People: Poor people don't understand the power of networking because they spend most of their time with their childhood friends. There is nothing wrong with spending time with people who make you happy, but you need to get out of your comfort zone and learn what others do differently from your daily routine. What do you see when you see people around you? Do you feel happy about where you stand in life? Do you feel Proud of yourself? Do you feel like you made it? I'll let you be the judge of that because you know yourself better than anyone ever could.
The best way to know that you are in the wrong group of people is when they look up to you. If your homies ask you questions and you never ask the questions, it's a time to run because you have outgrown them. It is always important to know who you spend your time with and the value they bring to your life. If you value their importance, then you are in the right group of people but don't settle for less unless you want to die broke with nothing to live behind for your loved ones.
3. Investment
The most significant investment of our time, Warren Buffet, Said, "if you can't find a way to make money while you sleep, you will work until you die" investment is an excellent way for the poor to get head because you can start it with as little as $1. There are many ways to make money in investments, and the rich know how to use it effectively. Investing is not as hard as the Wall Street gurus tell us.
In today's digital world, anyone can invest from anywhere worldwide based on the type of investment that interests them. There are many different types of investments, so do your due diligence before putting your hard-earned money into any investment. If you hit the block, seek for professional help but don't give up. It is also better to diversify your investment if one goes bad; you still have the other ones. Also, never invest the money you cannot afford to lose. There's a lot of risk in the investments, mainly if you invest in stocks and cryptocurrencies, which is why I strongly recommend you do a throughout due diligence before buying a stake in any investment.
4. Debt
Many people see debts as taboo and don't want anything to do with them unless they buy liabilities like car loans, student loans (this can be good or bad depending on situation) and other liability loans.
The rich: They understand that all successful companies and individuals have or took a loan sometime in their lives. The rich use loans to improve their buying power. For instance, if your business has $4,000 in cash, and takes a bank loan of $4,000, now you have a buying power of $8,000. The rich use loans to improve their companies and pay them back without compromising their initial investment.
The Poor: regular foxes take many loans that don't generate them anything while the rich take a loan to improve their business or other investment opportunities. Like we mentioned above, unsuccessful people take loans that take money from them instead of the loan making them money. For Example, if you take a car loan and use it to drive for Uber, this car will be an asset. However, if you take a car loan for the sake of having a car, it is a liability because you are paying off the loan that doesn't generate you anything.
5. Read books
At the overage, successful people read about 50 minutes and day. However, many unsuccessful people read zero books per year which is mind-blowing.
The rich: This group of individuals understands that reading is the key to success. You are learning somebody's lifetime work in one book.
The poor: these people are not the biggest fan of reading productive books, but they spend hours and hours scrolling down on Facebook posts and TikTak
videos. Reading is one of the greatest weapons to success because you can learn about anything from books.
6. Taxes
The rich understand the power of taxes. What is the good of paying almost half of your hard-earned money to the IRS? If you read books and tax laws, you will pay way less than you would be supposed to pay because there are many ways to reduce your tax rate legally. It is always good to know how to protect yourself from the IRS. The only way you can understand taxes is by reading books, watching videos, talk to tax professionals, and more.
7. Don't be too comfortable.
You might ask yourself, why shouldn't I be comfortable? Don't we work so hard so we can be satisfied one day? The truth is that none of these questions are wrong because people want to be wealthy so they can live a comfortable life. However, we tend to confuse ourselves with the difference between being relaxed and living comfortably.
Being comfortable is when you are in the place or position where you are too scared to grow because of unforeseen circumstances. These people are too afraid to live that job they hate because they convinced themselves they cannot do better. Most people hate their job, and yet they are stuck in it for more than 20 plus years because they are too comfortable in their current job position.
On the other hand, living a comfortable life is when you have reached your financial goals. If you are financially free and have passive incomes, then you can live comfortably. The rich live a costly and comfortable life because they decided not to settle for anything less than their dreams and goals.
In Summary
In today's world, anyone can be rich. But my question to you is, what's rich to you? I ask this question because everyone has an idea of what is wealthy to them. It could mean $100,000 or $1,000,000 or more because we all have a different meaning of the word "Rich."
Here is my advice to people who want to change their financial situation
o Set a financial goal
o Focus on creating multiple sources of income streams instead of trying to make more money.
o Read financial and economic books
o Watch personal finance movies & YouTube videos
o Eat Healthily. Your life is far more important than money because you can't make money if you are dead.
o Don't let money come between you and your loved ones because money is not everything.
o Seek financial advice from professionals
o Don't fall for scammers. There are so many scammers in today's world due to technology. So don't be their victims.
o Do your due diligence before you put your money in any investment because you don't want to lose your hard-earned money.
o Last but not least, always say I can, and I will instead of I cannot
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