We are all familiar with the old adage, “The rich get richer while the poor get poorer,” but why is this so? Let’s actually take a moment and try to break it down. Is there something the rich have, inherently know or do that the poor and the stagnating mediocrity dwellers don’t? I believe there is, and here’s why.
The Education System
We have all grown up being taught that higher education is the most stable, feasible and surest way to success. While the people who follow the rules go on to realize higher academic achievements, the majority of them never spend time outside of school learning about the rules of money. Unfortunately, our educational system was designed to produce hard-working perpetual employees rather than self-sufficient millionaires.
-G.Edward Griffin in The Creature from Jekyll Island, on Rockerfeller’s General Education Board, found in 1903.
If you have or plan on choosing a professional career you might live to be comfortable. But without the applied knowledge of business and investments, you will find it extremely difficult to live the life you had once dreamed of as a kid.
What’s your initial reaction when you hear the word debt? Nine out of 10 people would probably experience a less than positive one.
Most people take out loans or use their credit cards to pay for things they cannot afford. Most of those things become liabilities. Meaning they suck the money out of your pockets to a place where it will never be seen again.
For you to fully understand debt and how to deal with it, you must open your mind to its uses and possibilities. If you didn’t already know, there is actually debt that is considered good.
Good debt can make you more money than you have.
Let’s say you take out a loan and invest it into a rental property. This would be considered good debt because it’s actually putting money back into your pocket. On the contrary taking out a loan to buy that Mercedes C Class you can by no means afford while living in your mom’s basement, would be considered bad debt.
Utilizing and understanding the concept of good debt will actually increase your financial stability not diminish it.
Save Your Money
Most common mantra #2: Go to school get a high-paying job and save your money. Yea,yea,yea we’ve heard it all before.
If we Gen Y’ers are actually planning on building our own wealth, working our asses off just to stack it up in the bank will not cut it. Just like with good debt, knowing how to spend your money is just as important as making and saving it. Educate your self on investment options that interest you and spend that money. Work for your money and then make it work for you. Otherwise you’ll be stuck on the perpetual hamster wheel with the rest of them.
Get a Job at a Big Corporation and Work Your Way up the Organizational Ladder
We all go through that pressing brain-crushing moment when we realize that we need to make a serious decision about the direction we want to go in life. You’re sick of your parents “helping you out” and you feel an overwhelming need to break through into your own independence. But now what? When your age has caught up to society’s standards of where you’re supposed to be in life I’ve seen people take one of these few directions:
A) Blind themselves with their social life (friends, girlfriends, boyfriends, I like to party all the time etc.)
B) Settle into a job doing something they love (or sadly not even that,) which doesn’t provide any real growth or opportunity but is stable enough to make them feel comfortable.
C) Get a job at a big corporation and spend the majority of their years putting their blood, sweat, and tears into working their way up the corporate ladder.
D) Or you can go against the grain of it all and become an entrepreneur by starting at the bottom with the goal to make it to the top on his or her own terms.
As for options A and B, I don’t think people who pursue them are too concerned with the prospect of becoming wealthy. Option C is where life gets tough. These people want success and they’re willing to work for it. The problem is after all the time spent killing themselves in school in hopes of landing a job at a top corporation; these people spend the best years of their lives working over 60 hours a week for that pot of gold at the end of the rainbow.
The worst part is that these people spend their lives making someone else’s business prosper, and do not work to help themselves. They are constantly depending on getting raises, bonuses and promotions, and put all of their energy into their next paycheck.
For all of the D’s out there, you realize the importance of owning the ladder instead of climbing someone else’s. You would rather put your blood and sweat into your own business to create real wealth and financial freedom for yourself.
You Need Money to Make Money
If you didn’t have the pleasure of being born into a rich family, or have access to daddy’s Rolodex it probably seemed at one point or another that making millions on your own was a long way away. I remember growing up and wishing my parents were rich, wishing I had more connections and that someone would be able to pass me over something instead of starting at square one. But if you look closely you’ll realize that because information and resources are easy access, riches can be and are made through innovation and knowledge more so than through having money alone.
Live Below Your Means
It’s all about your mind set. If you’re focusing on staying below your established means how can you ever grow and surpass your current financial standing?
It is said that the person who lives below their means suffers from a lack of imagination. I say, if you can’t afford it innovate ways to make it possible!