There’s a big difference in the approach of the poor and rich to money. Whereas the poor trade their time for money, the rich work only for assets (and forget pretty much everything else).
Many people have the idea that the way to get rich is to earn a higher income. They think that they’ve made it when they earn a six-figure salary. But when they eventually get there, they soon realize that they’re not all that rich after all. Once the IRS takes its cut of their income, they have substantially less than they thought. Add a mortgage and other responsibilities to the mix, and there’s very little money left over in the kitty at the end of the month.
The rich, on the other hand, see the world differently. They’re not interested in their working income or career progression. They don’t play that game. Instead, all they do is find ways to accumulate assets. These are items that will continue to generate income for them in the future (which they can then use to buy more assets and so on).
The form of the strategy that the rich take can differ quite substantially. Some, for instance, might decide to invest in property after reading Diversyfund reviews. They might like the idea of generating income from rents. Others might invest in stocks or bonds. And some might even decide to purchase a business or farmland.
Whatever it is, these assets always make more money than they cost to own. They produce a consistent positive cash flow. Owning them makes the owner richer, not poorer.
Most people in the middle class, however, never learn this lesson. Instead, they believe that they should work for money and then spend it as they get it. The idea of accumulating capital seems like madness to them. It’s too risky, they tell themselves.
But this approach to life prevents them from ever really acquiring substantial wealth. Yes, they might earn a little here and there. But they never get to benefit from compounding, so their income always depends on the amount that they can earn in their jobs.
The wealthy have a very sophisticated approach to money. They understand that buying any asset is a risk. But they also know that most assets usually pay off in the long term. So owning a diversified portfolio of assets can really help them to boost their net worth and improve their overall standard of living.
The key to becoming more like the rich is to change your mindset. You want to get out of the idea that your income is all the money that you’ll ever have and start thinking about how assets could help you thrive. Assets are the only way to generate passive income and supplement your regular income. Remember, you can only sell so many of your hours each day to an employer. You need some time to sleep, rest and enjoy yourself. Passive income sources allow you to do that without compromising your income potential.