A famous saying keeps talking about why the rich are getting richer and the poor get poorer. Do you also believe it is so? Let’s find that here.
The belief that the rich get richer and the poor get poorer is causing problems in our country.
However, we are forced to believe this and convince ourselves to keep society in order without finding what justifies that.
Moreover, people have the same opportunities to make it big and live a life that has been always been dreamt of.
So, in this article, we will look at why people think the rich are getting richer and the poor are getting poorer.
Why The Rich Get Richer And The Poor Get Poorer Theory
The rich get richer the poor get poorer theory is a Surplus Theory of Social Stratification that shows that wealth flows from poorer to richer hands, a concentrating diffusion.
Reasons Why The Rich Are Getting Richer And The Poor Getting Poorer
Here are some habits of the world’s richest people that tell why the rich are getting richer.
1. They value their time and their money.
One of the habits of the world’s richest people is they use their time wisely to generate even more money.
They hire assistants to free up time and mental space to generate more money, usually with businesses they own.
2. They work hard to create capital that works for them.
They invest in income-producing assets such as rental property, business, or stocks and bonds.
So, they work hard to create capital and then invest it to make money.
3. They understand that you can recycle money to make more money.
As an asset increases in value, they pull out its original capital investment and then buy another income-producing asset with it.
4. They avoid debt
The rich understand that dodging any debt is undoubtedly a habit that can help your overall financial picture.
More so, Daugs says. “If you want to build wealth, you cannot waste money on paying interest on consumer credit, such as credit cards and even car loans,”
5. They buy their cars and plan to keep them long-term
For the most part, cars depreciate the second you drive one off the lot.
Meanwhile, by keeping their cars long-term, they use the time between car purchases to save up cash that would otherwise go towards a monthly payment.
6. They have emergency funds
More so, they have a reserve of cash that you can tap into in an emergency goes a long way.
They don’t need to charge the expense onto a high-interest credit card or take out a personal loan.
7. They take advantage of everything their employer has to offer
In addition, they look into their employer’s benefit plans thoroughly, which can help them save money and even invest to earn more.
As such, leveraging some of the benefits to their own benefits to create more wealth.
8. They utilize tax deductions
Another reason why the rich are getting richer is that they try to minimize their taxes when they can.
They do this by finding some element of tax savings in everything from retirement plan investments to home mortgage interest, charitable contributions, college funding and health savings accounts.
9. They look for other income streams
Most of their investment portfolios with other assets, such as rental properties that provide passive income, are diversified into more income streams.
10. They save for their kids’ college early on
One of the habits of the world’s richest people and the reason why the rich are getting richer is that they kick-start saving for their children’s future education early, so they have less of a financial burden years later.
What do most millionaires do for a living?
According to data, banking and finance professionals were far and away the most likely to become millionaires but naturally have an advantage in terms of knowledge and understanding.
Meanwhile, the top five careers for millionaires include engineer, accountant, teacher, management and attorney. However, 79% of millionaires did not receive any inheritance at all from their parents or other family members.
What is the cause of Global poverty?
Here are the top Causes of Global Poverty
- Inadequate Access To Clean Water And Nutritious Food.
- Little Or No Access To Livelihoods Or Jobs.
- Poor Education.
- Climate Change.
- Lack Of Infrastructure.
- Limited Capacity Of The Government.
Who benefits more from poverty?
Logically, it appears that the poor benefit more from being poor.
However, it is assumed that universal provision delivers no particular advantage Meanwhile when comparing the two options of poverty-targeting and universal condition, the main beneficiaries of poverty are the rich while the poor are the beneficiaries of universal provision.
Moreover, a simple thought experiment can demonstrate why the rich lose out economically much less from poverty-targeted social protection when compared to universal provision.
How To Tell If Someone Is Rich
The research discovered that financial differences show up right in people’s faces, literally etched into your facial structure and tissues.
As such, if you are wondering if some closer to you or whom you have met is rich, here are some of the tips on how to tell if someone is rich
- They’re not that outgoing.
- Most don’t wear flashy clothes.
- They don’t name-drop.
- They don’t talk about their money or possessions.
- They don’t care if you’ve heard of them or not.
Some of the reason why the rich are getting richer has been addressed in this blog post.
Some of which include prioritizing their time. They also manage their funds, recycle them and invest in more streams of income.
In addition, they avoid debts and save up for their children’s education at an early stage.
Meanwhile, the rich benefit more from poverty because of that leverage that makes more money, while the poor only benefit from the universal provision.
We hope this article has satisfied your curiosity about why the rich are getting richer and the poor are getting poorer.
Thank you for reading. Don’t forget to drop your thoughts in the comment box.