How The Poor And The Rich Can Become Wealthy | by KenWrites | The Capital | Oct, 2020


KenWrites
Photo by Sharon McCutcheon on Unsplash

You have a salaried job. You put in long hours every week to keep your job. You get paid, but realize that from one year to another, you barely get by with savings you manage to put together. You are poor and have day dreams of becoming wealthy someday, but spend long fruitless hours wondering why you are not at least on the path to realizing your dream. There is something you should be doing that you don’t know.

Maybe you are not poor. You are rich and perhaps you make up to a million dollars a year. You buy what you call assets and take pride in the knowledge that you can afford your needs and wants. Well, just like the poor person described above, there is also something you should be doing to become wealthy that you don’t know. So stop thinking you are wealthy because you are not. Not until you start to do what real wealthy people do.

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The poor and the rich don’t get to become wealthy largely because they have a distorted knowledge of what assets and liabilities really are.

What is an Asset?

An asset is what brings you cash flow or passive income. That is just what it is at its core.

What is a Liability?

A liability is what digs a hole in your pocket and takes away your money, period!

Below are what the poor do and stay poor, what the rich do and never get to become wealthy, and finally, what those that are wealthy truly do.

WHAT POOR PEOPLE DO

They keep paying for liabilities including car loan, mortgage, credit card debt, student loan and other forms of liabilities they think are assets.

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WHAT RICH PEOPLE DO

They acquire liabilities in form of chains of houses, cars, yacht and other luxuries that bring in no cash flow, but only take away money from their pockets.

WHAT WEALTHY PEOPLE TRULY DO

They acquire assets including businesses, physical real estate, stocks, bonds, commodities and intellectual property.

These assets create streams of cash flow or passive income.

These passive income are reinvested in acquiring more assets that keep increasing streams of passive income on and on and on.

They acquire all the luxuries they want and need without losing any sleep about getting into debt.

They simply don’t have to worry about money.

Now you know what the wealthy are addicted to doing, you would be wise to come up with a plan to start doing it like they do. It is not a get-rich-quick scheme. You can always start from somewhere knowing you don’t have to have millions of dollars to start. Little drops of water can become a mighty ocean with time. You are now armed with knowledge. Knowledge is power. Accomplishing financial freedom is most times, not a sprint but a marathon, and nothing can stop determined poor and rich folks.

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And finally, here are a few tips to get you going:

Work hard for earned income, but work harder towards earning passive income.

Pay yourself first (Set aside money for savings and Investments) before you set aside money for expenses.

Accumulating a strong asset base that generates passive income in cash within a tax-sheltered channel or tax minimized channel is key, and reinvesting the cash flow in accumulating more assets, increases your asset base and cash flow. This is the path to great long term wealth.

Good luck!

Photo by Chronis Yan on Unsplash

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