Why do the rich get richer and richer, the middle class faces the threat going down to become poor, and the poor just gets poorer and poorer.
The difference between a poor man and a rich man is actually when a rich person gets richer; his lifestyle stays the same (delaying the expensive lifestyle).
When a rich person earns money, the money will not be spent on things like expensive clothing, car, a Harley Davidson bike, but they will actually invest the money back into assets (things that put money into their pocket, like buying shares that will earn you dividend, property to be rented that can get some cash flowing in, bird's nest, profitable businesses, etc).
When you often see rich people that drive Lamborghini, you must be aware that they spend their money wise. First on assets, then they fulfill their expensive lifestyle needs from their assets' income.
So when the rich get richer, they just become richer and richer.
But why do middle class' people are often found striving just to get pass a day? Well, because when a middle person gets a raise in their income, they will actually use the money on things' that will further decrease their assets, and increase their liability (things that take money out of their pocket).
They will go and get a bigger and fancier house, bigger car, a more expensive cell phone, a great computer, a 999 inches television maybe (if they can actually find one), and too many more to say. The main point is all the money they get; they spent it on things that will take money out of their pocket instead of putting it in.
Yes, people may look at him and say something like "Hey, that guys is way too rich, he buys so many thing in such a short time". But that's what most people would say, because that's what most people would do. If I or somebody else that have proper financial education, we would just like, "Hey, that guy is such a moron, he would probably be poor again in 6 months and probably need to work for the rest of his life if he didn't get proper financial education".
Because the rich have all this money that is invested that will bring money in for them, their money just works for money. They don't have to work hard anymore. They leverage their money.
So why do the poor get poorer and poorer? The poor here actually don't care or don't know anything about leverage and investing. When they receive more and more money, they will just spend it on stuffs like getting a new cell phone, expensive clothes, and expensive foods. Basically, all the income becomes expenses.
Now the question is; if you're income increases, what will you buy? Is it things that put more money into your pocket or things that will take money out of your pocket?
Answer that question, you're the one that knows yourself.
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