Why Rich Get Richer and Middleclass Suffer

Today I read almost two and a half pages of “Rich Dad, Poor Dad”. These pages included two questions as

• Why Rich Get Richer?
• Why Middle class suffer?

Why Rich Get Richer?

The rich get richer because they are not academically bright only but they understand

• the difference between an asset and a liability
• how to make money work hard for them instead of working hard for the money

So they invest in assets that generate more than money to cover their expenses.

Their assets pay for their expenses; not their salary.

Why Middle class suffer?

While the middle class is the upholder of the notion

A pay raise will give them more easier life in a big house with a big car and a fashion life standard.

They do not understand that increased salary increases expenses; more taxes and high mortgage. This misunderstanding throws families into financial uncertainty.

If my pattern is to spend everything I get, an increase in cash will likely only increase spending.

“A fool and his money is one BIG party.”

Solution

Okay.

Robert (the book author) answered the questions but did he provide the solutions?

Yes, he did. The solutions are quite simple.

Financial Literacy. It is understanding the difference between an asset and a liability.

An asset puts money back into my pocket.

A liability takes money out of my pocket.

Another thing in financial literacy is studying the investment. I know the word investment itself sounds risky and there is this dogma in our society “Play it safe. Avoid risk”. Investment is risky but it is not a risk for the financially literate (which I am not at the moment.)

Relying on salary, working hard for money, and playing it safe. This keeps us occupied that when the “deals of all time” arrive, we do not have enough time and money to avail it.

That is for today. I read these pages I thought I should share them with you. Thank you for reading.

See ya tomorrow

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