It’s no secret “why the rich get richer” and the middle-class and others are struggling.
If you aspire to be rich, then here are 5 simple reasons why the rich get richer.
This is the first principle that the rich abide by, they pay themselves first before anyone else.
We all work hard for our money but yet choose to pay others first.
The key to getting ahead and being fiscally fit is by building a massive capital reserve for emergencies, investments and fun.
The rich understand this basic concept and this is why the rich get richer.
By paying yourself first, you set aside resources for savings and investments.
These investments go to work for you generating more income and cash-flow.
The rich value their time and always look for ways to maximize their efforts.
We all have 24 hrs in a day and as such, we can not work the whole 24 hrs.
The rich look for opportunities to generate income even while they are sleeping.
The rich always have their money working for them and not them working for money.
By paying yourself first, you set yourself up to capitalize on opportunities.
Remember do what the rich do and pay yourself first.
The rich get richer by investing their money.
Investing your money is the key to growing your income, cash-flow, and networth.
The only way to be rich and wealthy is to invest your money in income producing assets.
Examples of such assets are real estate, stock market, businesses, gold, silver, and other precious metals just to mention a few.
If you want to be rich and wealthy, you must invest your money.
The rich build businesses that generate multiple income streams.
The name of the game is cash-flow and the rich understand this and that is why they are constantly exploring opportunities to create more cash-flow.
As stated earlier, the rich and wealthy value their time while the middle-class and others exchange their time for money.
Having only one stream of income is the most risky form of existence.
As of my writing, we are currently experiencing the biggest health pandemic.
The effect of this could be felt globally with businesses shutting down or going bankrupt and employees laid off etc.
Conditions are so bad that the USA government had to bailout businesses and send stimulus checks to it’s citizens.
This is why you must not rely on one source of income.
So look into starting your own business or businesses because as a business owner, you get to enjoy all the tax benefits of owning a business.
This is another reason why the rich get richer.
They have a long-term mindset and are always planning for the future.
Every move they make is well calculated and they are never afraid to take risks.
The middle-class and others are always seeking instant gratification and never have long-term planning.
Yes, it is ok to indulge, however, the rich only indulge using the cash-flow from their investments.
The rest of the population indulges using their hard earned money.
To get ahead financially, you must have long term plans and only acquire income-producing assets and use these incomes to fund your lifestyle.
The rich get richer by focusing on building their networth.
The rich never focus solely on income but rather by growing their networth.
The only way to grow your net-worth is by investing in income producing assets which grow in value over time.
The key to building your net-worth is by having a personal financial statement and reviewing it on a consistent basis.
The financial statement has 4 sections:
This section lists your income sources, paycheck, dividends, business, real estate, etc.
List all your expenses, car payments, utilities, mortgage, students loans, etc.
This shows all your assets, remember assets produce income, therefore your house is not an asset unless it generates monthly income for you.
The liabilities section list what you owe such as, your mortgage loan, car loan, student loan, consumer loan, credit card debt etc.
Your net worth is calculated by subtracting the total of your liabilities from your total assets.
This is why the rich get richer.