This is a question I ask myself almost every single day. It appears that everywhere I turn money becomes more important and could be a solution.
I have googled, read so many books, and watch countless YouTube videos to try and get an answer to this question.
I have even gone as far as joining groups on Meetup to find an answer.
In case you have been asking the same question, I am here to share with you the findings from my many, many, many hours of research and inquisitiveness.
Just before I do, I want to share with you one of the most staggering statistics that will make you pay further attention to this topic.
Did you know that back in 1982 when the Forbes 400 list started, the total net worth of the Forbes 400 then was 92 Billion. Fast track to 2021, and the collective fortune of the 400 wealthiest Americans stands at $4.5 Trillion. Between 2020 and 2021, in just one year, in just 366 days, the world’s wealthiest have increased their fortune by 40%.
By 2053, it is estimated that the collective wealth of the world’s wealthiest 400 will be over $80 Trillion. My question to you is, ‘what piece of that pie will be yours?’
If you want to know why the rich get richer then you are in the right place as I’ve got 8 key reasons to share with you today.
Your best Friend in accumulating wealth is momentum .
The 8 key reasons the rich get richer are;
1. The Rich Have Multiple Sources of Income
So many of us were thought to go to school, get a degree, find that job – that single source of income. The best of advice was to do well in that job and apply for promotion every year or two. The other advice, was to move to another company as we will get better pay rises than staying in the same company. This is the poor man’s mentality; the poor only have one source of income.
The rich on the other hand have multiple sources of income, many of which are passive sources of income.
Just so we are on the same page, I am not saying there is something wrong with having a job, in fact, I have a job too. I am saying to really make wealth, it is important to use the money from that day job to establish other sources of income.
The rich don’t trade time for money, which is what many of us do when we have one source of income.
2. The Rich Think Long Term
Long term thinking means creating value with the future in mind so you can grow, scale, and continue to create more value.
The rich start their businesses with the long-term view in mind. They make decisions with the future in mind. This is why they don’t immediately react to the noise in the stock market.
They position themselves for more by creating immerse value.
They specialise in a skill, they are not generalist. Think Mark Zuckerberg – social media, and Warren buffer- stock
When you have a long term mindset, then you realise It’s okay to get rich slow!
3.The Rich Do Not Trade Time For Money
Moore’s law predicts that computing power doubles every 18 months, while there is some debate on how true this is for the world we leave in today. The need to automate for more efficiency still stands true today and it will for years to come.
Rather than working 40 hours a week and getting paid $10 per hour, how about automating some of what you do to create more time and avenues for you to do greater things.
If you don’t have a system that can automate what you do and create more time for you, you would never generate more money. The rich know this so they automate, they systemise in order to achieve increased efficiency.
4. The Rich Pay Themselves First
The rich invest regularly in themselves, the poor spend money on things that depreciate in value.
The rich tax themselves and take out their investment first before understanding what’s left to spend and deciding what to do with what’s left.
The poor spend, then hope to have some money left to invest. This is why they don’t have capital available for projects that generate additional income.
The above might be true because the rich understand the next point below much better than most of us do…
5. The Rich Know How Money Works
The rich put their money to work into the right investments and projects.
They understand the power of compound interest. They don’t have their money sitting and waiting to be wiped out by inflation.
They don’t just sit and let the bank make pennies for them. They use their money and double, triple it. By doing so, they keep getting richer, and the divide between them and the poor keep getting wider.
6. The Rich Educate Themselves
The rich invest in books to learn about money, growing wealth, reducing expenses and the likes. They invest time in educating themselves on things they do not know about. They take advantage of the resources online and in books to their advantage.
They read on taxes, insurance, how to transfer wealth, how to leave a better quality of life….
This is why the poor pay higher taxes, and the rich use the strategies learned to position themselves to pay less taxes.
If you lack financial wisdom your little money will be quickly lost.
If you can sit through school and accumulate knowledge on topics you might never use, why not invest in accumulating knowledge on a skill you will definitely use every day.
7. The Rich Understand The Value Of Contacts
The rich continuously network and consciously aim to take value from people they meet.
You might say they have better access to better contacts but with everyone you meet, there is something valuable you can learn from them. So, start where you are and appreciate your contacts better.
Network and surround yourself with people who challenge you to do better and be better, accept the challenge, expand your thinking, and do great things as the rich do.
8. The Rich Leverage
Everybody leverages, but the rich do it more than the poor and do it better.
They leverage time by leveraging people to get more done in 24 hours than the poor who do it all by themselves and can only get so much done in 24 hours.
The gap between the rich and the poor will continue to get wider and wider so why not educate yourself and switch to the side of the rich.
*This is not financial advice. Do not consider this blog to be a substitute for obtaining advice from a qualified investment advisor. The ideas and strategies should never be used without first assessing your own personal and financial situation, or without consulting a financial professional*
